Tpximpact Hldg Regulatory News (TPX)

10 June 2020

The Panoply Holdings PLC

("The Panoply", or the "Group")

Acquisition of Arthurly

Advancing the Group's technical capabilities

The Panoply Holdings PLC, the technology-enabled services group focused on digital transformation, announces the acquisition of the entire issued share capital of Arthurly Ltd. ("Arthurly") (the "Acquisition").

Highlights

· Acquisition of Arthurly, a technology services business with particular strength in the Microsoft Technology Stack

· Arthurly has won and delivered a number of projects alongside Notbinary (a business within the Group) over the last six months

· Consideration of £412,000, of which £150,000 is to be paid from existing cash resources and the remainder to be settled by the allotment and issue of 365,853 shares in The Panoply

· Acquisition is expected to be immediately margin and earning enhancing to Notbinary

Neal Gandhi, Chief Executive Officer of The Panoply, said: "Arthurly have been working with Notbinary for several months to support bids and to deliver on some of our most important public sector clients. Bringing them into the group adds to our depth of capabilities in hyperscale cloud projects, in particular giving us greater strength on the Microsoft stack.

Like many smaller companies, Arthurly sees the opportunity to maximise the value of their capabilities through being part of a larger group. They are trusted by numerous large client organisations to deliver smaller projects but have been unable to secure larger contracts due to their size. By becoming a wholly integrated part of Notbinary, we expect to see the team at Arthurly being able to move up the value chain to fuel further growth.

Our clients continue to entrust us during a period of major change and that in turn gives us the confidence to continue to invest in our growth and complete this acquisition at this time."

Background

Arthurly has been working in partnership with Notbinary, one of the existing Group companies, over the last six months. Together they have won and delivered a number of projects, including work with The Department for Business, Energy and Industrial Strategy (BEIS), UK Export Finance (UKEF), North East London Commissioning Alliance (NELCA), North Bristol Health Trust (NBT), British Red Cross (BRC), Camden Borough Council and a number of other data intensive government agencies. Arthurly has been working alongside Notbinary on these projects to provide design, development and engineering services to The Panoply clients, building software and data products, services and solutions on the large cloud vendor platforms, Microsoft Azure, Google Cloud Platform (GCP) and Amazon Web Services (AWS).

Arthurly is debt free, cash generative and has delivered circa £300,000 (unaudited) of revenue in the last seven months from external contracts not connected with The Panoply. For the year ended 30 September 2019, Arthurly generated revenues of £189,308 (unaudited) and operating profit of £48,918 (unaudited). Had Arthurly been part of the Group over the last six months, it would have added £87,000 (unaudited) of margin improvement on Notbinary contracts and is expected to be earnings enhancing with immediate effect.

The Panoply is paying a purchase price of £412,000 for the Acquisition on a cash free debt free basis, to be satisfied through the payment of £150,000 in cash and the issue of 365,853 shares (the "Consideration Shares"). £100,000 worth of the shares are subject to claw back in the event of underperformance in accordance with the Group's acquisition formula. Further consideration may be payable based on revenue generated for the 16 months to 30 September 2021. Any such additional consideration shall be calculated following the agreement of the relevant revenue calculations and publication of the Group's results relating to the financial period ending on 30 September 2021 and shall be payable by the allotment and issue of shares in The Panoply. The number of such shares to be allotted and issued shall be calculated by dividing the deferred consideration payable by a price per share in The Panoply which is the greater of 82 pence and the volume-weighted average mid-market price (VWAP) over the 30 business days prior to the relevant issue date. Any shares in The Panoply which are allotted and issued as part of the deferred consideration will be allotted and issued in 4 tranches at six-month intervals.

All of the Consideration Shares and any further shares issued by way of deferred consideration shall be subject to customary lock-in and orderly market arrangements.

The maximum total consideration is capped at £1.5m.

In addition to the above consideration the shareholders of Arthurly will receive the available cash on Arthurly's balance sheet at completion which is expected to be approximately £195,000.

Following the completion of the Arthurly acquisition The Panoply will operate 10 consulting businesses, providing clients with a comprehensive digital transformational service offering. Circa 70% of pro forma revenues will continue to come from public services.

Stuart Arthur, CTO and Founder of Arthurly, said:

"There is excellent alignment of the core mission and values of The Panoply and Arthurly, and through our well established relationship with Notbinary, we have been able to provide solutions to clients that drive change and have a positive impact.

"Becoming part of the Group is a natural progression for Arthurly and will enable us to deliver on a much larger scale with additional support to expand our growing client base. We are excited to be part of something special and can't wait to get started."

Admission and total voting rights

An application will be made for the admission of the Consideration Shares to trading on AIM which is expected to take place on or around 16 June 2020. Following this issue, the Company's issued share capital will comprise 55,418,120 Ordinary Shares and this is the total number of voting rights in the Company. There are no shares held in treasury.

This figure may be used by shareholders as the denominator for the calculation by which they may determine if they are required to notify their interest in, or change to their interest in, the Company under the FCA's Disclosure Guidance and Transparency Rules.

Enquiries:

About The Panoply

The Panoply is a digitally native technology services company, built to service clients' digital transformation needs. Founded in 2016, with the aim of identifying and acquiring best-of-breed specialist information technology, design and innovation consulting businesses across Europe, the Group collaborates with its clients to deliver the technology outcomes they're looking for at the pace that they expect and demand.

More information is available at www.thepanoply.com