SDI Group Regulatory News (SDI)

SCIENTIFIC DIGITAL IMAGING PLC

("SDI" or the "Company") 

Acquisition of Sentek Limited,

Equity Fundraising of £2.5 million

and

Notice of General Meeting

Scientific Digital Imaging plc (AIM: SDI), the AIM quoted group focused on the application of digital imaging technology for use in life sciences, healthcare, astronomy, and art conservation, is pleased to announce it has acquired Sentek Limited ("Sentek") for a cash consideration of £2 million (the "Acquisition"). The Acquisition was financed by £600,000 from the Company's existing cash resources and £1.4 million from a new £1.4 million bridge facility ("Bridge Facility").

The Company is also pleased to announce an oversubscribed equity fundraising of £2.505 million (before expenses). The Company has conditionally placed 31,250,000 new ordinary shares of 1 penny each ("Ordinary Shares") at a price of 8 pence per Ordinary Share (the "Issue Price") with certain institutional investors (the "Placing"). In addition, Mike Creedon, Chief Executive of the Company, intends to subscribe tomorrow at the Issue Price for 62,500 Ordinary Shares (the "Subscription") (the Placing and the Subscription together, the "Equity Fundraising").

Commenting on the Acquisition and the Equity Fundraising, Chairman Ken Ford said:

"We are delighted to have acquired Sentek and look forward to integrating it into our scientific instrument business. The acquisition of Sentek marks a significant milestone in SDI's growth strategy, diversifying the existing product range and widening our addressable market. We are delighted by the institutional investor interest shown in our oversubscribed placing; we welcome several new shareholders to the register and we look forward to the future with confidence."

The Equity Fundraising is conditional, inter alia, on shareholder approval of certain resolutions to be proposed at the General Meeting ("Resolutions") referred to below.

The Acquisition

SDI has acquired Sentek for consideration payable of £2 million in cash, on a debt-free cash free basis, together with an additional net assets adjustment payment. Sentek specialises in the manufacture and production of pH and conductivity sensors and other electrochemical sensors for water based applications. These products are manufactured in glass and plastic with the specialist glass blowing completed in-house.

The Acquisition is in line with SDI's strategy of augmenting its organic growth with selective acquisitions. SDI will assist in the growth of Sentek by automating certain aspects of the glass blowing process and the Board has identified additional cross selling opportunities between its existing distributors and Sentek's distributors. The Board expects the Acquisition to be earnings enhancing in the first full year of ownership.

Sentek's last unaudited accounts for its financial year ending 31 October 2014 reported revenues of £2.6 million and profit before tax of £0.5 million. Sentek will continue to be based in Braintree and in Auchtermuchty. The Acquisition excludes property owned by Sentek in Braintree which, following a sale and lease back at completion, will continue to be used by the enlarged group. SDI is paying to the vendors of Sentek a net asset adjustment payment of £111,000 at completion with any balance to be paid within approximately fifteen business days of completion following preparation of completion accounts. Mike Creedon has provided an unsecured, interest free loan of £100,000 to the Company in order to fund the first of these net assets payments and this loan will be repaid by the Company following admission.

The Equity Fundraising

The Company announces that it intends to raise £2.505 million, before expenses, through a conditional Placing by finnCap of 31,250,000 Placing Shares at the Issue Price. The Placing Shares will, following allotment, rank pari passu in all respects with the Existing Shares.

The Placing is conditional, inter alia, upon the passing of the Resolutions and the placing agreement not having been terminated, and admission of the Placing shares having occurred by no later than 16 November 2015 (or such time and date as the Company and finnCap may agree, being not later than 30 November 2015). The Placing is not being underwritten.

The Company also announced today that Mike Creedon intends to subscribe for 62,500 new Ordinary Shares on 29 October 2015, also at the Issue Price. On admission, Mike Creedon will be interested in 70,000 Ordinary Shares, representing approximately 0.1 per cent. of the Company's enlarged issued share capital.

The Company intends to utilise the proceeds of the Equity Fundraising to:

· repay in full the Bridge Facility that the Company used to fund the Acquisition (although on such repayment, the Company will drawdown in full the Term Loan Facility (as defined below)); and

· use the balance of the proceeds of the Equity Fundraising for general working capital purposes for the enlarged business and for transaction costs associated with the Equity Fundraising and Acquisition.

The New Facilities

The Company has today entered into the Bridge Facility and a new £500,000 term loan facility ("Term Loan Facility").

The purpose of the Bridge Facility, and the Term Loan Facility once subsequently drawn down, is to fund part of the consideration payable for the Acquisition.

Whilst under the terms of the Bridge Facility the funding available under that facility is only available for two months following the Acquisition, the Directors believe that, subject to agreement on the terms, the Company would be able to refinance the Bridge Facility so as to enable the amount outstanding under the Bridge Facility to be repaid over the medium term. There can, however, be no guarantee that such a refinancing would be available, leaving the Company in default, and the terms of any such refinancing, if available, may be on terms that are more onerous than the terms of the Term Loan Facility.

General Meeting

A notice convening the General Meeting, to be held at the offices of Mills & Reeve LLP, Botanic House, 100 Hills Road, Cambridge CB2 1PH at 10.00 am on 13 November 2015, will be posted to shareholders today and will be available from the Company's website at www.scientificdigitalimaging.com.

The Directors consider the proposals set out in the notice to be in the best interests of the Company and the shareholders as a whole. The Directors who hold Ordinary Shares intend to vote in favour of the Resolutions in respect of their shareholdings, representing in aggregate approximately 3.1 per cent. of the Company's current issued share capital as at the date of this announcement.

Further details

Application will be made to the London Stock Exchange for the 31,312,500 new Ordinary Shares to be admitted to trading on AIM. Assuming that the Resolutions are passed at the General Meeting, it is expected that Admission will be effective and dealings will commence in respect of the New Shares, at 8.00 a.m. on 16 November 2015.

Unless otherwise defined herein, capitalised terms used in this announcement shall have the same meanings as defined in the Circular containing notice of the General Meeting, a copy of which will shortly be available on the Company's website.

For Further Information:

Note to Editors:

About Scientific Digital Imaging plc

Scientific Digital Imaging plc designs, manufactures and sells digital imaging technology for use in the life sciences, healthcare, astronomy, and art conservation through Synoptics brands (Syngene, Synoptics Health, Synbiosis and Syncroscopy), the Artemis CCD company brands (Atik Cameras and Artemis CCD Cameras) and the Opus Instruments brand (Osiris). SDI plans to continue to grow through its own technology advancements as well as strategic, complementary acquisitions.

www.scientificdigitalimaging.com