XCH.L Regulatory News (XCH)

7 April 2015

Xchanging plc

Amendments to MM4 earn-out arrangements

Xchanging plc ("Xchanging"), the business technology and services provider, reports it is making amendments to the revised earn-out arrangements for the founders of MM4 (Chirag Shah, Dave Bowen and Alan Buxton (the "MM4 Founders")), the e-sourcing business acquired by Xchanging in September 2013*.

The total amount of the cash earn-out remains at US$10.85 million, the targets for MM4 revenue in 2014 and 2015 remain unchanged and the payment profile continues to be driven by revenue. However, the ability of the MM4 Founders to receive early payments of the earn-out will now focus on MM4 revenue performance for the two year period ended 31 December 2015 rather than revenue and operating profit targets for the Procurement business.

This change reflects the significant volume of new business won in the Procurement business under Chirag Shah's leadership. This new business requires investment which makes the achievement of the Procurement business profit target metrics in the previous earn-out arrangement (to enable early payments) unlikely and therefore an inappropriate incentive.

The revised early payment mechanism has been designed to incentivise the MM4 Founders to continue to grow the MM4 business while recognising the benefit from also wining new business in the wider Procurement business.

As the MM4 Founders are related parties pursuant to the Listing Rules, the amendments to the MM4 earn-out arrangements fall within LR 11.1.10R of the Listing Rules. Xchanging considers the amendments to be fair and reasonable as far as shareholders of the company are concerned.

* MM4 is the current name for MarketMaker4, the e-Sourcing business acquired by Xchanging in September 2013 and the trading name for SBB Services Inc.

Enquiries

Xchanging plc Tel: +44 (0) 203 604 6999

Ken Lever, Chief Executive Officer

Alexandra Hockenhull, Director of Corporate Communications

and Investor Relations

Maitland Tel: +44 (0) 207 379 5151

Peter Ogden

Martin Barrow

Emma Burdett

www.xchanging.com

@XchangingGroup

Linkedin/company/xchanging

Cautionary Statement: 

This announcement contains forward-looking statements that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as anticipate, target, expect, estimate, intend, plan, goal, believe, will, may, should, would, could, is confident, or other words of similar meaning. In particular, any statements regarding Xchanging's strategy, dividend policy and other future events or prospects are forward-looking statements. Undue reliance should not be placed on any such statements because they speak only as at the date of this announcement and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors (that could cause actual results, and Xchanging's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

These forward-looking statements are not guarantees of future performance and there are a number of factors (many of which are outside of Xchanging's control) which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among these factors are: increased competition, the loss of or damage to one or more key customer relationships, changes to customer ordering patterns, delays in obtaining customer approval or price level changes, the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of future acquisition opportunities or major investment projects.

Save for those forward-looking statements required by the Listing Rules, the Disclosure and Transparency Rules and/or the Prospectus Rules, Xchanging undertakes no obligation to update these forward-looking statements, and will not publicly release any revisions it may make to these forward-looking statements that may result from events or circumstances arising after the date of this announcements. Xchanging therefore will comply with its obligations to publish updated information as required by law or by any regulatory authority but assumes no further obligation to publish any additional information.