15 Apr 2009 07:05
SGM
Sigma Capital Group plc
("Sigma" or the "Company")
Proposed Demerger and Listing on PLUS Markets
of
University IP Subsidiary
Key Points
Proposed demerger and listing on PLUS of Sigma's wholly-owned university IP commercialisation subsidiary, Frontier IP Limited, formerly known as Sigma IP Limited.
The listing on PLUS is to be effected by way of the sale of Frontier IP Limited to ARH Leisure Investments PLC ("ARH"), a PLUS-quoted company. ARH is to be re-named Frontier IP Group plc ("Frontier IP Group").
The total consideration payable to Sigma is £3.5 million, to be satisfied by the issue to Sigma of 350 million new shares in ARH ("Consideration Shares").
Sigma's holding in Frontier IP Limited is currently carried at nil value and the consideration received would, if recognised in Sigma's balance sheet, increase its net assets per share by a further 7.5p per share to 23.4p per share.
Sigma is also participating in a placing of ARH shares ("Placing"), which is expected to raise £0.633 million (gross) for Frontier IP Group. Frontier IP Group's resulting cash balances will be approximately £1 million, before expenses.
Sigma will own up to 77.4% of Frontier IP Group, which will continue to be treated as a subsidiary of Sigma.
The proposed listing on PLUS and the Placing are subject to ARH shareholder approval, which will be sought at a general meeting to be held on 11 May 2009. ARH has received irrevocable undertakings to vote in favour representing 80.44% of the existing issued share capital of ARH.
The Sigma Board believes that the proposed demerger and listing of Frontier IP Limited will enhance further Frontier IP Limited's ability to generate value from intellectual property derived from the university and research institute sectors.
The above summary should be read in conjunction with the full text of the announcement set out below.
Graham Barnet, Chief Executive Officer of Sigma commented,
"I am delighted to announce the proposed demerger and listing of our university IP subsidiary, Frontier IP Limited, on PLUS. The move, together with the proposed fundraising, represents a significant step forwards in our strategy to capitalise on opportunities in the IP commercialisation sector. This deal significantly enhances Sigma's value and provides an independent financial foundation for the growth of its IP commercialisation business. Frontier IP Group will be well placed to take advantage of consolidation opportunities in the sector, to further strengthen its management team and to fulfill its intention to raise limited partnership funds for its university partners. We look forward to supporting Frontier IP's enhanced growth prospects."
For further information please contact:
| Sigma Capital Group plc | T: 0131 220 9444 |
| Graham Barnet, Chief Executive | |
| Frontier IP Limited | T: 0131 220 9444 |
| Neil Crabb, Chairman | |
| Biddicks | T: 020 7448 1000 |
| Katie Tzouliadis/ Sophie Lane | |
| Arbuthnot Securities | T: 020 7012 2000 |
| Tom Griffiths/ Neil Kirton |
Sigma Capital Group plc
Proposed Demerger and Listing on PLUS Markets of University IP Subsidiary
Sigma is pleased to announce the proposed demerger and listing on PLUS Markets of its wholly-owned university IP commercialisation subsidiary, Frontier IP Limited ("Frontier IP"), formerly known as Sigma IP Limited.
The listing on PLUS is to be effected by way of a sale of the entire issued share capital of Frontier IP to ARH Leisure Investments PLC ("ARH"), the PLUS-quoted investment company. Following completion, ARH will be re-named Frontier IP Group plc ("Frontier IP Group") and Neil Crabb and Alister Minty, of Frontier IP Limited, will be appointed Chairman and Managing Director, respectively, of Frontier IP Group.
The sale and other related proposals are subject to, amongst other things, ARH shareholder approval at a general meeting, to be held on 11 May 2009. A circular outlining further details and convening the general meeting will be posted to ARH shareholders later today. At the same time, ARH has received irrevocable undertakings from certain of its shareholders, holding in aggregate approximately 80.44% of its share capital, to vote in favour of the resolutions to be proposed at the general meeting.
The total consideration payable by ARH for the acquisition of Frontier IP is £3.5 million, to be satisfied by the issue to Sigma of 350 million new ordinary shares of 0.1 pence each in the share capital of ARH at a price of 1 penny per share ("Consideration Shares"), credited as fully paid. Following completion of the sale of Frontier IP, it is anticipated that the consideration receivable, if recognised in Sigma's balance sheet, would increase Sigma's net assets per share (estimated at 15.9p per share, as at 31 December 2008) by a further 7.5p per share to 23.4p.
In addition, Sigma is participating in a placing of new shares by ARH. ARH is raising £633,000 (gross), through a conditional placing ("Placing") of 63,300,000 new ordinary ARH shares of 0.1 pence each, at a price of 1 penny per share (the "Placing Shares"). Further details are set out below. Following the Placing, and including ARH's existing cash balances of some £354,000, Frontier IP Group is expected to have approximately £1 million (gross of expenses) of cash.
Sigma has agreed to subscribe for up to 35,000,000 Placing Shares in the Placing. At this level of subscription, Sigma would expect to own approximately 77.4% of the enlarged share capital of Frontier IP Group. Sigma has undertaken to ARH and its corporate adviser that, subject to certain exceptions as permitted by the PLUS Rules, it will not dispose of, or transfer, any of its interests in new ordinary ARH shares for a minimum of 12 months and a maximum of 24 months. This undertaking will take effect from the date of the admission of the Placing Shares and Consideration Shares to trading on PLUS. Application will be made for the admission of the Consideration Shares and Placing Shares to trading on PLUS ("Admission"). Dealings on PLUS are expected to commence on 12 May 2009.
The proposed board of Frontier IP Group, which is subject to shareholder approval, comprises four directors of Frontier IP. Neil Crabb will be appointed Non-executive Chairman, with Alister Minty as Managing Director. Marilyn Cole, Sigma's Finance Director, and Graham Barnet, Sigma's Chief Executive, will serve as part-time Finance Director and Non-executive Director respectively, pursuant to a services agreement between Frontier IP and Sigma Technology Management Limited, Sigma's FSA authorised subsidiary. This agreement will also cover the provision of strategic advice and financial and regulatory services. Sigma's Corporate Development Director, Jackie McKay, will be responsible for the development of new and existing relationships for Frontier IP Group although she will remain as an employee of Sigma. The agreement is for an initial period of 18 months and reflects Sigma's ongoing support for, and its significant shareholding in, the business.
The Sigma Board believes that Frontier IP's planned listing on PLUS should enhance the business's ability to generate value from intellectual property derived from the university and research institute sectors. It is also in line with Sigma's previously stated intention to strengthen the management and balance sheets of its subsidiaries and to seek independent finance for the businesses while continuing to provide central functions and services.
NOTES TO EDITORS
About ARH
ARH was incorporated on 29 May 2007 and its shares were admitted to trading on the PLUS-quoted Market on 21 September 2007, having raised £390,000 before expenses. Since admission, ARH has sought an appropriate acquisition or investment whilst seeking to minimise operating expenses. No investments have been made and, to date, ARH has only incurred minimal costs in evaluating investment opportunities; it has not incurred salaries, costs or fees.
About Frontier IP
Frontier IP is a wholly-owned subsidiary of Sigma Capital Group plc, established to develop and consolidate the activities of Sigma in the commercialisation of intellectual property developed by universities and research institutes.
Frontier IP has long-term commercialisation contracts with two Scottish universities, specifically, a 10-year partnership with the University of Dundee and a 25 year partnership with the Robert Gordon University. Under these partnerships, in return for assistance in maximizing the commercial value of technologies emerging from these universities' research programmes, it is entitled to receive equity in spin-out projects and a share in licensing revenue. Frontier IP currently holds equity and has received licensing revenue from these agreements. More university relationship agreements are planned and Frontier IP also intends to establish dedicated funds for investment in university spin-out companies.