Tpximpact Hldg Regulatory News (TPX)

12 February 2019

The Panoply Holdings PLC

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

Acquisition of GreenShoot Labs

The Panoply Holdings PLC, the digitally native technology services company, is pleased to announce the acquisition of the entire issued share capital of GreenShoot Labs Limited ("GreenShoot Labs"), a provider of enterprise digital solutions using applied Artificial Intelligence ("AI") and conversational interfaces (the "Acquisition").

GreenShoot Labs will be the fourth business to join the UK cluster of Group companies, and further progresses The Panoply's aim to build regional clusters which provide a full suite of digital transformation services. This acquisition is in line with the Group's strategy to back start-ups with strong management and strong potential for growth. The acquisition terms include no initial consideration and additional consideration only payable if GreenShoot Labs achieves positive EBITDA during the earn-out period. In the period following completion a de minimis cash amount will be payable to the sellers of GreenShoot Labs equivalent to the value of the current net assets of GreenShoot Labs acquired at completion.

The acquisition marks The Panoply's entry into the growing applied AI and conversational interfaces market. Conversational interfaces were recently named the top trend in digital commerce by Gartner1. Research firm Tractica estimate that by 2021 the global market for voice enabled digital assistants will reach 2.6bn units, opening up a significant market opportunity to help organisations build voice enabled services. Co-founders Tim Deeson and Ronald Ashri lead the management team and are the principal sellers of GreenShoot Labs. Ronald has a PhD in Computer Science (Artificial Intelligence), and Tim has a track record of building a profitable digital services business, Deeson, which was acquired by The Panoply in December 2018.

1Gartner Top 10 Trends in Digital Commerce, October 2018

GreenShoot Labs' customers include a global accounting firm where GreenShoot Labs is creating an AI auditor. Other recent work includes the first chatbot supporting cybercrime victims that is currently being tested by UK police forces. GreenShoot Labs also recently received significant media coverage for their voice-enabled AI football coach, created to promote awareness of STEM careers amongst young people.

GreenShoot Labs is the creator of OpenDialog, an open source framework for building enterprise automation services using applied AI and conversational interfaces.

Neal Gandhi, Chief Executive Officer of The Panoply said:

"We are delighted to be making our third acquisition since our IPO of GreenShoot Labs, a leader in applied AI and conversational interfaces. Over a short period of time the team there have proven themselves a player to be reckoned with in their field, implementing projects for several blue-chip brands and garnering national acclaim with their AI football coach. The acquisition of GreenShoot Labs enables The Panoply to solve another important element of the digital transformation puzzle and we are excited to see the company's growth accelerate as part of the Group."

Tim Deeson, Co-Founder GreenShoot Labs said:

"Ronald Ashri and I are very excited to have The Panoply's support in driving our vision for the growth of GreenShoot Labs. Clients are really starting to see the returns from investing in conversational interfaces at scale. We are focused on solutions that power conversational applications for mission critical products, helping our clients with strategy to ensuring successful integration with their other technology platforms."

Additional information on the acquisition

There is no initial consideration payable for the acquisition save for a de minimis cash amount in consideration for the net assets of GreenShoot Labs at completion. The sellers of GreenShoot Labs, Tim Deeson, Ronald Ashri, Simon Wakeman and Stuart Haigh, may be entitled to receive deferred earn-out consideration based on the performance of the business during the two financial years from 1 April 2019 to 31 March 2021 payable in shares in the capital of The Panoply. Any such shares will be issued in one tranche following the determination of the accounts in respect of the relevant financial period and will be issued at the higher of 100 pence per ordinary share and the 30 day VWAP prior to the issue of such earn-out shares.

The total consideration payable by The Panoply in respect of the Acquisition is capped at a maximum of £7.35m. In order to achieve the theoretical maximum for the total consideration payable GreenShoot Labs would need to generate in excess of £1m EBITDA within the earn out period. There can of course be no guarantee that GreenShoot Labs is able to grow its business to this level within the required timeframe.

Any Panoply shares that may be issued and allotted in respect of the Acquisition will be subject to customary lock-in arrangements and any Panoply shares issued in respect of the financial year ending 31 March 2020 shall be subject to claw-back by The Panoply if GreenShoot Labs' EBITDA decreases in the year ending 31 March 2021.

There are no proposed changes to The Panoply's board members as a result of the Acquisition.

GreenShoot Labs was incorporated in September 2017 and in its first year of trading generated revenues of £43,297 with an operating loss before tax of £81,739 for the year ended 30 September 2018.

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 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.

About GreenShoot Labs

GreenShoot Labs use applied artificial intelligence and conversational interfaces to create enterprise automation services. Their work includes a chatbot that supports victims of cyber crime, powerful workflows and a voice-led AI football coach. The UK-based company was incorporated in September 2017, and is led by Tim Deeson and Ronald Ashri. The Company's open source technology, OpenDialog has been created to drive manage enterprise scale conversational interface projects.

More information about GreenShoot Labs is available at www.greenshootlabs.com