Premier Technical Services Group Plc (PTSG) is delighted to announce the acquisition of Guardian Electrical Compliance Ltd (Guardian) a market leading electrical compliance and testing company based in Sheffield.
Guardian brings with it its proprietary ‘TraQ-It’ software, an interactive online portal, a unique and clearly differentiated product in the market. Its combination with PTSG’s Clarity platform will produce a compelling proposition for PTSG’s existing and new customers.
Paul Teasdale, Group CEO, advised: “We are delighted to welcome Guardian as our latest addition to the group; this enhances PTSG’s strong presence in the electrical safety services market.”
“Today’s announcement marks a step-change in PTSG’s growth story as we substantially enhance our leading position in Electrical Services.
“Guardian is a highly complementary and attractive acquisition. It has an exceptional growth track record, management team and large blue-chip customer base. Critically it fits our clear acquisition model by presenting significant opportunities for cross-selling additional PTSG services as well margin improvement whilst supporting our long-term goal of sector dominance.
“The transaction also reflects our determination to grow further our revenues from compliance-related services that now stand at record levels. Furthermore, we believe Guardian’s proprietary software is unique in the market and, when combined with our own in-house platform, Clarity, will provide our customers with a highly advanced and compelling compliance solution.”
Guardian’s current owners, including Ian Carnall, John Quick, Richard Roebuck and William Sutherland, will remain in the business to grow and expand its operations, which will be integrated into PTSG’s Electrical Services division.
We wish Guardian a warm welcome into the group of companies and look forward to working with them in the future.
THIS ANNOUNCEMENT, INCLUDING THE APPENDIX AND THE INFORMATION CONTAINED HEREIN, IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.
Premier Technical Services Group plc
(“PTSG” or the “Company”)
Acquisition and Placing
PTSG, the niche specialist services provider, today announces the proposed acquisition of Guardian Electrical Compliance Ltd (“Guardian”), a market leading electrical testing and compliance company headquartered in Sheffield (the “Acquisition”), for an initial cash consideration of £12.0m (the “Consideration”). Guardian will be acquired with c. £1m of cash on its balance sheet. The Company also announces its intention to conduct a non-pre-emptive cash placing to raise gross proceeds of £20.0m (the “Placing”) to fund the Acquisition, associated costs and to support future acquisitions.
Deferred consideration of up to £4.0m is also payable over the next three years, in cash or shares at PTSG’s discretion, subject to Guardian meeting stretching performance targets.
Acquisition Highlights & Rationale:
· Acquisition of Guardian, a market leading electrical testing and compliance company, enhances PTSG’s strong presence in the electrical safety services market
· Guardian has a proven track record of achieving strong growth rates, with 5 year CAGR in revenue and adjusted operating profit of 22% and 36% respectively; attractive adjusted operating profit margin of c.22%, in line with PTSG
· As a national provider of electrical safety services focused purely on testing and compliance services, the acquisition is wholly aligned with PTSG’s stated strategy of continuing to increase its revenues from compliance related services
· Guardian brings with it its proprietary “TraQ-It” software, an interactive online portal, a unique and clearly differentiated product in the market. Its combination with PTSG’s Clarity platform will produce a compelling proposition for PTSG’s existing and new customers
· Guardian’s strong national presence and its large and diverse nationwide customer base is wholly complementary with PTSG’s existing national presence and customer coverage
· The acquisition is an excellent fit with PTSG’s existing Electrical Services Division and complementary product coverage enabling strong cross-selling opportunities across the two businesses as well as the deployment of TraQ-It across other PTSG disciplines
· The Placing is being conducted through an accelerated bookbuild to raise gross proceeds of £20.0m, and will open with immediate effect following this announcement. In addition to funding the Consideration, Placing proceeds will be used to:
o Fund the upcoming acquisition of a Fire Solutions company – expected to complete by year end
o Support a strong pipeline of further near term acquisition targets that provide a compelling strategic fit
· Once Placing proceeds are fully deployed, planned acquisitions will be significantly earnings enhancing, before factoring in any synergy or cross-selling opportunities
· Completion of the Acquisition is conditional only upon completion of the Placing
Paul Teasdale, CEO of PTSG, commented:
“Today’s announcement marks a step-change in PTSG’s growth story as we substantially enhance our leading position in Electrical Services and demonstrate our intent to expand further our Fire Solutions business to meet the unprecedented customer demand.
Guardian is a highly complementary and attractive acquisition. It has an exceptional growth track record, management team and large blue-chip customer base. Critically it fits our clear acquisition model by presenting significant opportunities for cross-selling additional PTSG services as well margin improvement whilst supporting our long-term goal of sector dominance.
The transaction also reflects our determination to grow further our revenues from compliance related services that now stand at record levels. Furthermore, we believe Guardian’s proprietary software is unique in the market and, when combined with our own in-house platform, Clarity, will provide our customers with a highly advanced and compelling compliance solution.”
For further information, please contact:
PTSG
+44 (0)1977 668 771
Paul Teasdale, Chief Executive Officer
Numis Securities
+44 (0) 207 260 1000
Stuart Skinner / Kevin Cruickshank / Michael Burke
Hudson Sandler
+44 (0)207 796 4133
Charlie Jack / Hattie O’Reilly
Information on Guardian
Established in 2010, Guardian is a privately-owned, market leading specialist in electrical safety services, focused purely on testing and compliance services. Importantly, its services are focused on meeting the legal requirements of a building’s duty holders in respect of electrical safety. It does not currently undertake any installation or remedial work.
Guardian is a national provider, with offices in Sheffield, Milton Keynes and Gloucester, with c.150 engineers and staff. It has a large and diverse client base of c. 850 unique customers, including blue chip names such as BAE Systems, GlaxoSmithKline, Next, Siemens, Tata, Unilever and Nestle.
Guardian has developed a proprietary software system, “TraQ-It”, an interactive online portal that allows customers to monitor and manage their legal requirements in respect of electrical safety. This online management system clearly differentiates Guardian from commoditised electrical testing. The PTSG directors believe it represents one of the key drivers to Guardian’s success both in terms of growing its market share and in customer retention – it currently enjoys over 90% customer renewals, with a focus on long-term service contracts.
Guardian has a proven track record of achieving strong growth rates, with 5 year CAGR in revenue and adjusted operating profit of 22% and 36% respectively. Its revenue for the year ended 31 December 2017 was £8.3m, producing an adjusted operating profit (statutory profit plus owner expenditure that will not continue post-acquisition) of £1.8m, representing a profit margin of 21.7% – in line with the PTSG group average. Guardian is a highly cash generative business, delivering operating cash conversion of 86% in the last financial year. It also has a good debtor profile, with minimal debt over 90 days old and average debtor days of 63. The significant majority (90%) of revenue came from fixed wire testing, with the balance split between portable appliance testing, emergency lighting and training & remedials.
Guardian’s current owners, including Ian Carnall, John Quick, Richard Roebuck and William Sutherland, will remain in the business to grow and expand its operations, which will be integrated into PTSG’s Electrical Services Division.
Acquisition rationale
The Acquisition substantially enhances PTSG’s leading position in the Electrical Services market, and follows the Company’s stated strategy of increasing its revenues from compliance related services whilst achieving sector dominance in the markets in which it operates. As noted above, Guardian is a pure-play testing and compliance business, thereby providing an excellent fit with PTSG’s existing capabilities and service offering in this market, as well improving PTSG’s business mix between installation and testing & compliance.
By combining Guardian’s TraQ-It software with PTSG’s Clarity platform, the Group will be able to offer a compelling service proposition in the market with material differentiation to competitors, as well as increasing barriers to switching as customers increasingly value the TraQ-It management system in meeting their legal requirements.
In addition, there are strong cross-selling opportunities to roll-out this electrical testing and compliance and asset management technology offering to existing PTSG clients; PTSG and Guardian are already working on a joint pilot project with one of the UK’s largest retailers, which, if successful, would be extended through the store estate and lead to significant additional revenues for the Group. Similarly, there is an opportunity to introduce existing Guardian clients to other PTSG service lines.
PTSG expects to integrate Guardian quickly into its business model to accelerate its growth trajectory. This will include, for example, extension of Guardian’s testing work into a remedial value model; Guardian currently does very little repair work, compared to PTSG’s target of earning £1 of repair work for every £1 of testing work, therefore this represents a significant opportunity for growth.
Like PTSG, Guardian has a proven track record of achieving strong revenue and profit growth. The Acquisition will be earnings enhancing in the first full year of ownership. Furthermore, the PTSG directors expect significant earnings enhancement once the Placing proceeds are deployed in-full on other planned acquisitions.
The Acquisition is being funded from the Placing to allow the Company to maintain a strong balance sheet to take advantage of future acquisition opportunities, as the Company’s strategy of combining organic growth with carefully selected acquisitions is pursued. The Group’s existing banking facilities include both a revolving credit facility and an overdraft facility, which it utilises for its day to day operations.
Pipeline of further acquisition opportunities
PTSG is currently in exclusive negotiations to acquire a dynamic, fast growing Fire Solutions company for an initial cash consideration of £4m plus deferred consideration payable over five years subject to delivery against stretching performance targets. The business is based in the South of England, and its acquisition will give PTSG a more comprehensive geographical coverage and service offering to its existing client base of over 17,000 customers.
There are currently unprecedented levels of demand for fire solutions services. This acquisition will enable PTSG to address this demand more fully by offering a complete fire protection solution across the UK, covering both fire and security systems. It will build on the strong success already achieved by PTSG in the installation, maintenance and testing of riser and sprinkler systems. The acquisition is expected to complete by the end of 2018, and further announcements will be made in due course.
In addition, PTSG currently has a strong identified pipeline of further acquisition opportunities, one of which is already in exclusivity, spanning each of its divisions. The Group’s strong track record of deploying its capabilities to successfully acquire, integrate and develop acquisition targets makes it well placed to deliver on this pipeline in the near term. The next acquisition from this pipeline will be funded from the balance of the Placing proceeds (post the acquisition of Guardian and the upcoming Fire Solutions acquisition detailed above) plus an extension of the Group’s existing debt facilities, as required.
Details of the Placing
The Placing is subject to the terms and conditions set out in the Appendix. Numis will commence a bookbuilding process in respect of the Placing (“Bookbuild”). The book will open with immediate effect following this announcement.
The proceeds of the Placing will initially be used to fund the Consideration and associated costs. The balance of the proceeds of the Placing will then be used to fund the upcoming acquisition of a Fire Solutions company, which is expected to complete by the end of 2018, and to support the Company’s strong pipeline of further near-term acquisition targets. The Acquisition is conditional upon the completion of the Placing.
The price per ordinary share at which the Placing Shares (defined below) are to be placed (the “Placing Price”) will be decided at the close of the Bookbuild. The timing of the closing of the Bookbuild, the Placing Price and allocations are at the discretion of PTSG and Numis. When issued, the Placing Shares will be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares of 1 penny each in the share capital of the Company, including the right to receive all dividends and other distributions declared, made or paid on or in respect of such shares after the date of issue of the Placing Shares.
Application will be made to the London Stock Exchange for the admission of the Placing Shares to trading on AIM (“Admission”). Admission is expected to take place at 8.00am on 18 October 2018 (or such later date as may be agreed between the Company and Numis) and dealings in the Placing Shares will commence at that time. The Placing is conditional upon, inter alia, Admission becoming effective. The Placing is also conditional on the placing agreement between the Company and Numis not being terminated.
The Appendix to this announcement (which forms part of this announcement) sets out further information relating to the Bookbuild and the terms and conditions of the Placing.
About PTSG – www.ptsg.co.uk
Premier Technical Services Group PLC is the UK’s leading provider of façade access and fall arrest equipment services, lightning protection and electrical testing, steeplejack and rope access services and fire solutions.
Operating through four divisions, Access & Safety, Electrical Services, Building Access Specialists and Fire Solutions, the Group provides highly-engineered industrial products and quality services and has a substantial presence in a number of niche markets.
PTSG provides a central information service for its businesses and champions the dissemination of key information and best practice. PTSG unites its constituent businesses under one clear identity, which supports smarter working and delivers top class service to its customers.
Headquartered in Castleford, West Yorkshire, the Group employs more than 600 people across 18 UK sites, who service more than 150,000 buildings across the whole of the UK for over 17,000 customers in a wide range of industries.
The Company is listed on the LSE AIM (PTSG.L)
This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation which came into effect on 3 July 2016.
This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.
This Announcement includes statements, estimates, opinions and projections with respect to anticipated future performance of the Company (“forward-looking statements”) which reflect various assumptions concerning anticipated results taken from the Company’s current business plan or from public sources which may or may not prove to be correct. These forward-looking statements can be identified by the use of forward looking terminology, including the terms “anticipates”, “target”, “believes”, “estimates”, “expects”, “intends”, “may”, “plans”, “projects”, “should” or “will”, or, in each case, their negative or other variations or comparable terminology or by discussions of strategy, plans, objectives, goals, future events or intentions. Such forward-looking statements reflect current expectations based on the current business plan and various other assumptions and involve significant risks and uncertainties and should not be read as guarantees of future performance or results and will not necessarily be accurate indications of whether or not such results will be achieved. As a result, prospective investors should not rely on such forward-looking statements due to the inherent uncertainty therein. No representation or warranty is given as to the completeness or accuracy of the forward-looking statements contained in this announcement. Forward-looking statements speak only as of the date of such statements and, except as required by the FCA, the London Stock Exchange or applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.
IMPORTANT NOTICE ON THE PLACING FOR INVITED PLACEES ONLY
NOT FOR RELEASE, PUBLICATION, OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, REPUBLIC OF IRELAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO.
THE DISTRIBUTION OF THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) TOGETHER THE “ANNOUNCEMENT”) AND THE OFFERING OF THE PLACING SHARES IN CERTAIN JURISDICTIONS MAY BE RESTRICTED OR PROHIBITED BY LAW OR REGULATION. PERSONS DISTRIBUTING THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. NO ACTION HAS BEEN TAKEN BY THE COMPANY OR NUMIS SECURITIES LTD (“NUMIS”) THAT WOULD PERMIT AN OFFERING OF SUCH SHARES OR POSSESSION OR DISTRIBUTION OF THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) OR ANY OTHER OFFERING OR PUBLICITY MATERIAL RELATING TO SUCH SHARES IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) COMES ARE REQUIRED BY THE COMPANY AND NUMIS TO INFORM THEMSELVES ABOUT, AND TO OBSERVE, SUCH RESTRICTIONS.
MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS CONTAINED HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS AS DEFINED IN SECTION 86(7) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED, (“FSMA”) (“QUALIFIED INVESTORS”) BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE “PROSPECTUS DIRECTIVE”); AND (B) IN THE UNITED KINGDOM, TO QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE “ORDER”); (II) FALL WITHIN ARTICLE 49(2) (A) TO (D) (“HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC”) OF THE ORDER; OR (III) ARE PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS IN (A) OR (B) TOGETHER BEING REFERRED TO AS “RELEVANT PERSONS”).
THIS ANNOUNCEMENT HAS BEEN ISSUED BY AND IS THE SOLE RESPONSIBILITY OF THE COMPANY.
THIS ANNOUNCEMENT INCLUDES STATEMENTS, ESTIMATES, OPINIONS AND PROJECTIONS WITH RESPECT TO ANTICIPATED FUTURE PERFORMANCE OF THE GROUP (“FORWARD-LOOKING STATEMENTS”) WHICH REFLECT VARIOUS ASSUMPTIONS CONCERNING ANTICIPATED RESULTS TAKEN FROM THE GROUP’S CURRENT BUSINESS PLAN OR FROM PUBLIC SOURCES WHICH MAY OR MAY NOT PROVE TO BE CORRECT. THESE FORWARD LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD LOOKING TERMINOLOGY, INCLUDING THE TERMS ‘ANTICIPATES’, ‘TARGET’, ‘BELIEVES’, ‘ESTIMATES’, ‘EXPECTS’, ‘INTENDS’, ‘MAY’, ‘PLANS’, ‘PROJECTS’, ‘SHOULD’ OR ‘WILL’, OR, IN EACH CASE, THEIR NEGATIVE OR OTHER VARIATIONS OR COMPARABLE TERMINOLOGY OR BY DISCUSSIONS OF STRATEGY, PLANS, OBJECTIVES, GOALS, FUTURE EVENTS OR INTENTIONS. SUCH FORWARD-LOOKING STATEMENTS REFLECT CURRENT EXPECTATIONS BASED ON THE CURRENT BUSINESS PLAN AND VARIOUS OTHER ASSUMPTIONS AND INVOLVE SIGNIFICANT RISKS AND UNCERTAINTIES AND SHOULD NOT BE READ AS GUARANTEES OF FUTURE PERFORMANCE OR RESULTS AND WILL NOT NECESSARILY BE ACCURATE INDICATIONS OF WHETHER OR NOT SUCH RESULTS WILL BE ACHIEVED. AS A RESULT, PROSPECTIVE INVESTORS SHOULD NOT RELY ON SUCH FORWARD-LOOKING STATEMENTS DUE TO THE INHERENT UNCERTAINTY THEREIN. NO REPRESENTATION OR WARRANTY IS GIVEN AS TO THE COMPLETENESS OR ACCURACY OF THE FORWARD-LOOKING STATEMENTS CONTAINED IN THIS ANNOUNCEMENT. FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE OF SUCH STATEMENTS AND, EXCEPT AS REQUIRED BY APPLICABLE LAW, NEITHER THE COMPANY NOR NUMIS ASSUMES ANY RESPONSIBILITY OR OBLIGATION TO UPDATE OR REVISE PUBLICLY ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE. NO STATEMENT IN THIS ANNOUNCEMENT IS INTENDED TO BE A PROFIT FORECAST AND NO STATEMENT IN THIS ANNOUNCEMENT SHOULD BE INTERPRETED TO MEAN THAT EARNINGS PER SHARE OF THE COMPANY FOR THE CURRENT OR FUTURE FINANCIAL YEARS WOULD NECESSARILY MATCH OR EXCEED THE HISTORICAL PUBLISHED EARNINGS PER SHARE OF THE COMPANY.
THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.
THIS ANNOUNCEMENT IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA.
THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE “US SECURITIES ACT”) OR UNDER ANY SECURITIES LAWS OR WITH ANY REGULATORY AUTHORITY OF ANY STATE OF OTHER JURISDICTION OF THE UNITED STATES AND MAY NOT BE OFFERED, SOLD, RESOLD, TRANSFERRED OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE US SECURITIES ACT AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE OF OTHER JURISDICTION OF THE UNITED STATES. THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY: (I) OUTSIDE OF THE UNITED STATES IN “OFFSHORE TRANSACTIONS” WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE US SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS AND (II) IN THE UNITED STATES TO A LIMITED NUMBER OF “QUALIFIED INSTITUTIONAL BUYERS” (AS DEFINED IN RULE 144A UNDER THE US SECURITIES ACT) (“QIBS”) IN TRANSACTIONS EXEMPT FROM REGISTRATION UNDER THE US SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF STATES OR OTHER JURISDICTIONS OF THE UNITED STATES. NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE. THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES.
In this Appendix, unless the context requires, “Placee” means a Relevant Person (including individuals, funds or others) who has been invited to, and who chooses to, participate in the Placing and by whom or on whose behalf a commitment to acquire Placing Shares has been given.
Numis, which is authorised and regulated in the United Kingdom by the FCA, is acting as nominated adviser and broker to the Company in relation to the Placing and Admission and is not acting for any other persons in relation to the Placing and Admission. Numis is acting exclusively for the Company and for no one else in relation to the matters described in this announcement (including the Appendix) and is not advising any other person and accordingly will not be responsible to anyone other than the Company for providing the protections afforded to clients of Numis, or for providing advice in relation to the contents of this announcement (including the Appendix) or any matter referred to in it. The responsibilities of Numis as the Company’s nominated adviser under the AIM Rules for Companies and the AIM Rules for Nominated Advisers are owed solely to London Stock Exchange plc and are not owed to the Company or to any director or shareholder of the Company or any other person, in respect of his decision to acquire shares in the capital of the Company in reliance on any part of this announcement (including the Appendix), or otherwise.
No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Numis or by any of its affiliates (within the meaning of Rule 405 under the Securities Act (“Affiliates”)), agents or any of such persons’ directors, officers or employees or any other person as to the accuracy or completeness of the written or oral information contained in this Announcement or made available to or publicly available to any interested party or its advisers and no liability whatsoever is accepted by Numis or any of its Affiliates, agents, directors, officers or employees or any other person for any loss howsoever arising, directly or indirectly, from any use of such information or otherwise arising in connection therewith and any liability therefor is expressly disclaimed.
The price of shares and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares. Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.
This Announcement does not constitute an offer to sell or issue or the solicitation of an offer to buy or acquire Placing Shares in any jurisdiction in which such offer or solicitation is or may be unlawful.
The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of United States, Australia, Canada, Japan or South Africa. Accordingly, subject to certain exceptions or unless an exemption under the relevant securities laws is applicable, the Placing Shares may not be offered, sold, resold or delivered, directly or indirectly, in or into the United States, Australia, Canada, Japan, New Zealand or South Africa or any other jurisdiction outside the United Kingdom.
Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Announcement or the Appendix should seek appropriate advice before taking any action.
The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the AIM market of the London Stock Exchange. Neither the content of the Company’s website nor any website accessible by hyperlinks on the Company’s website is incorporated in, or forms part of, this announcement.
Terms defined in this Announcement, including this Appendix, have the meanings as set out in the end of this Appendix (unless the context requires otherwise).
1. DETAILS OF THE PLACING
1.1 Numis has today entered into the Placing Agreement with the Company under which, subject to the terms and conditions contained therein, Numis, as agent for and on behalf of the Company, has agreed to use its reasonable endeavours to procure placees (“Placees”) for the Placing Shares at a price to be determined following completion of the Bookbuilding Process (as defined below).
1.2 The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive dividends and other distributions declared or made after the date of issue of the Placing Shares.
1.3 The issue of the Placing Shares is to be effected by way of a cash and vendor placing. In respect of the cash placing element, the Company will allot and issue the Placing Shares on a non-pre-emptive basis to Placees in consideration for cash. The Company will use the proceeds to part-fund the Acquisition. The remaining funding for the Acquisition is to be met by way of a vendor placing whereby Placing Shares are allotted on a non-pre-emptive basis to the Vendors in consideration for the transfer to the Company’s wholly owned subsidiary, PTSG Electrical Services Limited of the entire issued share capital of Guardian Electrical Compliance Limited
1.4 The Company has agreed with Numis to a 180 day lockup from Admission, subject to certain exceptions.
1.5 The Placing Agreement contains customary undertakings and warranties given by the Company to Numis including as to the accuracy of information contained in this Announcement, to matters relating to the Company (and the Group as a whole) and its business and a customary indemnity given by the Company to Numis in respect of liabilities arising out of or in connection with the Placing.
1.6 The Placing is conditional upon, amongst other things, Admission becoming effective and the Placing Agreement not being terminated in accordance with its terms (further details on the conditions of the Placing are set out in paragraph 4 below).
1.7 Placees’ commitments in respect of Placing Shares will be made solely on the basis of the information contained in this Announcement (including this Appendix) and on the terms and conditions contained in it. No admission document for the purposes of the AIM Rules for Companies, or prospectus, is required to be published, or has been or will be published, in relation to the Placing or the Placing Shares.
2. ADMISSION
2.1 Application will be made to the London Stock Exchange for admission of the Placing Shares to trading on the London Stock Exchange’s AIM market for listed securities.
2.2 It is expected that Admission will become effective at 8.00am on 18 October 2018 and that dealings in the Placing Shares will commence at that time.
2.3 Admission is subject to the Placing Agreement becoming unconditional in all respects (save only for Admission) and not being terminated in accordance with its terms.
3. PARTICIPATION IN, AND PRINCIPAL TERMS OF, THE PLACING AND BOOKBUILDING PROCESS
3.1 Numis is acting as sole bookrunner and as agent for the Company in connection with the Placing, Applications and Admission. Numis is authorised and regulated in the United Kingdom by the FCA, and is acting exclusively for the Company and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than the Company for providing the protections afforded to the customers of Numis or for providing advice in relation to the matters described in this Announcement.
3.2 Commencing today, Numis is conducting an accelerated bookbuilding process (the “Bookbuilding Process”) to determine demand for participation in the Placing. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing, Numis will be entitled to effect the Placing by such alternative method to the Bookbuilding Process as they may in their sole discretion determine. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.
3.3 Participation in the Placing is only available to persons who may lawfully be, and are invited to participate in it by Numis. Numis and its affiliates are each entitled to participate in the Placing and the Bookbuilding Process as principal.
3.4 The Bookbuilding Process will establish a single price per Placing Share payable to Numis by all Placees whose bids are successful (the “Placing Price”), The Placing Price and the number of Placing Shares to be issued will be determined by Numis following completion of the Bookbuilding Process. The Placing Price and the number of Placing Shares is expected to be announced on the Regulatory Information Service (“RIS”) no later than 7.00am on 16 October 2018 (the “Pricing Announcement”).
3.5 The Bookbuilding Process is expected to close later today, but in any event no later than 7.00am on 16 October 2018 , but at the sole discretion of Numis the timing of the closing of the books, pricing and allocations may be accelerated or delayed. Numis may, in agreement with the Company, accept bids that are received after the Bookbuilding Process has closed.
The Company reserves the right (upon agreement with Numis) to reduce or seek to increase the amount to be raised pursuant to the Placing in its absolute discretion.
3.6 Any person who wishes to participate in the Bookbuilding Process should communicate their bid by telephone to their usual sales contact at Numis. Each bid should state the number of Placing Shares which the prospective Placee wishes to acquire at either the Placing Price which is ultimately established by the Company and Numis or at prices up to a price limit specified in its bid.
3.7 Numis reserves the right not to accept bids or to accept bids in part rather than in whole. The acceptance of the bids shall be at Numis’ absolute discretion.
3.8 A bid in the Bookbuilding Process will be made on the terms and conditions in this Appendix and will be legally binding on the Placee on behalf of which it is made and, except with the consent of Numis, will not be capable of variation or revocation from the time at which it is submitted.
3.9 Each prospective Placee’s allocation in the Bookbuilding Process will be determined by Numis in its sole discretion and will be confirmed orally by Numis following the close of the Bookbuilding Process. That oral confirmation shall constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) in favour of Numis and the Company to acquire the number of Placing Shares allocated to it at the Placing Price on the terms and subject to the conditions set out in this Appendix and in accordance with the Company’s articles of association.
3.10 Each prospective Placee’s allocation and commitment will be evidenced by a contract note issued to such Placee by Numis. The terms of this Appendix will be deemed incorporated by reference therein.
3.11 Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to Numis (as agent for the Company), to pay to it (or as it may direct) in cleared funds immediately on the settlement date in accordance with the registration and settlement requirements set out below an amount equal to the product of the Placing Price and such number of Placing Shares that such Placee has agreed to acquire and the Company has agreed to allot.
3.12 Irrespective of the time at which a Placee’s allocation(s) pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be made at the same time, on the basis explained below under “Registration and Settlement”.
3.13 All obligations under the Bookbuilding Process and the Placing will be subject to fulfilment of the conditions referred to below under “Conditions of the Placing” and to the Placing not being terminated on the basis referred to below under “Right to terminate under the Placing Agreement”.
3.14 By participating in the Bookbuilding Process, each Placee agrees that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.
3.15 To the fullest extent permissible by law and applicable FCA rules, none of Numis nor any of its Affiliates shall have any liability (including, to the fullest extent permissible by law, any fiduciary duties) to Placees (or to any other person whether acting on behalf of a Placee or otherwise) under these terms and conditions. In particular, none of Numis nor any of its Affiliates shall have any liability (including, to the fullest extent permissible by law, any fiduciary duties) in respect of Numis’ conduct of the Bookbuilding Process or of such alternative method of effecting the Placing as Numis and the Company may determine.
4. CONDITIONS OF THE PLACING
4.1 Numis’ obligations under the Placing Agreement in respect of the Placing Shares are conditional on, amongst other things:
(a) the compliance by the Company of all of its obligations under the Placing Agreement to the extent they are required to be performed on or prior to Admission;
(b) certain publication of announcement obligations (including with respect to this Announcement);
(c) none of the warranties in the Placing Agreement being untrue or inaccurate or misleading on and as of the date of the Placing Agreement and at all times before Admission by reference to the facts and circumstances then subsisting;
(d) in the opinion of Numis no material adverse effect having occurred since the date of the Placing Agreement;
(e) the Company allotting, subject only to Admission, the Placing Shares in accordance with the Placing Agreement;
(f) the Acquisition Agreement having become unconditional in all respects, subject only to Admission and any conditions relating to the Placing Agreement becoming unconditional and not being terminated before Admission and subject also (in the case of the Acquisition Agreement) to payment of the consideration due on its completion;
(g) the Placing Agreement not having been terminated prior to Admission; and
(h) Admission occurring by 8.00am on 18 October 2018, or such later date as is agreed in writing between the Company and Numis, but in any case no later than 8.00am on 31 October 2018.
4.2 If (i) any condition contained in the Placing Agreement in relation to the Placing Shares is not fulfilled or waived (to the extent capable of being waived) by Numis, by the respective time or date where specified, (ii) any such condition becomes incapable of being fulfilled or (iii) the Placing Agreement is terminated in accordance with its terms, the Placing will not proceed and the Placee’s rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.
4.3 Numis may, in its discretion and upon such terms as it thinks fit, waive or extend the period for compliance by the Company with the whole or any part of any of the Company’s obligations in relation to the conditions in the Placing Agreement, save that condition (h) above relating to Admission may not be waived. Any such extension or waiver will not affect the Placees’ commitments as set out in this Announcement.
4.4 Numis shall have no liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision it may make as to whether or not to waive (to the extent capable of being waived) or to extend the time and/or the date for the satisfaction of any condition to the Placing nor for any decision it may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Numis.
5. TERMINATION OF THE PLACING AGREEMENT
5.1 Numis is entitled in its absolute discretion, at any time prior to Admission, to terminate the Placing Agreement by giving notice to the Company in certain circumstances, including (but not limited to):
(a) the Company is in material breach of its obligations under the Placing Agreement; or
(b) any warranty given by the Company to Numis is untrue, inaccurate or misleading in any material respect; or
(c) there shall have occurred any material adverse effect since the date of the Placing Agreement or there is a fact, circumstance or development reasonably likely to involve a material adverse effect (whether or not foreseeable at the date of the Placing Agreement).
The rights and obligations of the Placees shall terminate only in the circumstances described in these terms and conditions and in the Placing Agreement and will not be subject to termination by the Placee or any prospective Placee at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by Numis of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Numis and that it need not make any reference to Placees and that neither it nor its Affiliates shall have any liability to Placees whatsoever in connection with any such exercise. Placees will have no rights against Numis, the Company or any of their respective directors or employees (or Affiliates) under the Placing Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999 (as amended).
6. REGISTRATION AND SETTLEMENT
6.1 Settlement of transactions in the Placing Shares (ISIN: GBOOBV9FPW93) following Admission will take place within the system administered by Euroclear UK & Ireland Limited (“CREST”), subject to certain exceptions. Numis reserves the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees in certificated form if, in Numis’ opinion, delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee’s jurisdiction.
6.2 Following close of the Bookbuild Process, each Placee allocated Placing Shares in the Placing will be sent a contract note trade confirmation stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to Numis and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions that it has in place with Numis.
6.3 The Company will deliver the Placing Shares to a CREST account operated by Numis as agent for the Company and Numis will enter its delivery (DEL) instruction into the CREST system. Numis will hold any Placing Shares delivered to this account as nominee for the Placees. The input to CREST by a Placee of a matching or acceptance instruction will then allow delivery of the relevant Placing Shares to that Placee against payment.
6.4 It is expected that settlement will take place on 18 October 2018 on a T+2 basis in accordance with the instructions set out in the contract note.
6.5 Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by Numis.
6.6 Each Placee is deemed to agree that, if it does not comply with these obligations, Numis may sell any or all of the Placing Shares allocated to that Placee on such Placee’s behalf and retain from the proceeds, for Numis’ account and benefit (as agent of the Company), an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable and shall indemnify Numis (as agent of the Company) for any shortfall between the net proceeds of such sale and the placing proceeds of such Placing Shares and will be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of such Placee’s Placing Shares on its behalf. By communicating a bid for Placing Shares to Numis, each Placee confers on Numis all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which Numis lawfully takes in pursuance of such sale.
6.7 If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the contract note is copied and delivered immediately to the relevant person within that organisation.
6.8 Insofar as Placing Shares are registered in a Placee’s name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax.
6.9 Placees will not be entitled to receive any fee or commission in connection with the Placing.
7. REPRESENTATIONS AND WARRANTIES
7.1 By participating in the Placing, each Placee (and any person acting on such Placee’s behalf) irrevocably acknowledges, confirms, undertakes, represents, warrants and agrees (as the case may be) that:
(a) it has read and understood the Announcement (including the Appendix) in its entirety and its subscription for the Placing Shares is subject to and based on the terms and conditions of the Placing as referred to and included in the Announcement and undertakes not to redistribute or duplicate this Announcement;
(b) no offering document or prospectus has been prepared in connection with the Placing and that it has not received and will not receive a prospectus or other offering document in connection with the Placing;
(c) the Ordinary Shares are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules (collectively “Exchange Information”), which includes a description of the nature of the Company’s business and the Company’s most recent balance sheet and profit and loss account and that it is able to obtain or access such information or comparable information concerning any other publicly traded company without undue difficulty;
(d) (i) it has made its own assessment of the Company, the Placing Shares and the terms and conditions of the Placing and has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing and has satisfied itself that the information is still current; (ii) none of Numis, the Company, any of their respective affiliates or any person acting on behalf of any of them has provided, or will provide it, with any material regarding the Placing Shares in addition to this Announcement; and (iii) it has not requested Numis, the Company or any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;
(e) the content of this Announcement is exclusively the responsibility of the Company and that neither Numis, nor any of its affiliates or any person acting on its behalf, has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously or concurrently published by or on behalf of the Company and will not be liable for any Placee’s decision to participate in the Placing based on any information, representation or statement contained in this Announcement or elsewhere;
(f) the only information on which it has relied in committing itself to acquire the Placing Shares is contained in this Announcement and any Exchange Information, such information being all it deems necessary to make an investment decision in respect of the Placing Shares, and that it has not received or relied on any information given or any representations, warranties or statements, express or implied, made by, Numis or the Company or any of their affiliates or any person acting on behalf of any of them or, if received, it has not relied upon any such information, representations, warranties or statements (including any management presentation that may have been received by any prospective Placee or any material prepared by the Research Department of Numis (the views of such Research Department not representing and being independent from those of the Company and the Corporate Finance Department of Numis and not being attributable to the same)) and neither, Numis, nor the Company (or any of their respective affiliates) will be liable for any Placee’s decision to accept an invitation to participate in the Placing based on any information, representation, warranty or statement other than that contained in this Announcement and any Exchange Information. Each Placee further acknowledges and agrees that it may not place the same degree of reliance on this Announcement as it may otherwise place on a prospectus or admission document.
(g) it has neither received nor relied on any confidential price sensitive information concerning the Company in accepting this invitation to participate in the Placing and is not purchasing Placing Shares on the basis of material non-public information;
(h) it has the funds available to pay for the Placing Shares it has agreed to acquire and acknowledges, agrees and undertakes that it will pay the total subscription amount in accordance with the terms of this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other acquirers or sold at such price as Numis determines;
(i) it: (i) is permitted to acquire the Placing Shares under the laws of all relevant jurisdictions; (ii) has fully complied, and will comply, with all such laws; (iii) has the requisite capacity and authority and is entitled to enter into and to perform its obligations as a subscriber for Placing Shares and will honour such obligations; and (iv) has obtained all necessary consents and authorities (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) to enable it to enter into the transactions contemplated hereby and to perform its obligations in relation thereto and, in particular, if it is a pension fund or investment company it is aware of and acknowledges it is required to comply with all applicable laws and regulations with respect to its subscription for Placing Shares;
(j) unless otherwise specifically agreed with Numis, it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are subscribed will not be, a resident of, or with an address in, the United States, Australia, Canada, Japan or South Africa, and it acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of the United States, Australia, Canada, Japan or South Africa and may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;
(k) it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any acting Shares that are allocated to it for the purposes of its business;
(l) it is acting as principle only in respect of the Placing or, if it is acting for any other person (i) it is duly authorised to do so; (ii) it is and will remain liable to the Company and/or Numis for the performance of all of its obligations as a Placee in respect of the Placing (regardless of the fact that it is acting for another person); (iii) it is both an “authorised person” for the purposes of FSMA and a qualified investor acting as agent for such person; and (iv) such person is either (1) a FSMA qualified investor or (2) its “client” (as defined in section 86(2) of FSMA) that has engaged it to act as his agent on terms which enable it to make decisions concerning the Placing or any other offers or transferable securities on his behalf without reference to him;
(m) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person and it acknowledges and agrees that this Announcement has not been approved by Numis in its capacity as an authorised person under section 21 of FSMA and it may not therefore be subject to the controls which would apply if it was made or approved as financial promotion by an authorised person;
(n) it is aware of and acknowledges that it has complied with and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;
(o) it will not make any offer to the public of the Placing Shares and has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom or elsewhere in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of FSMA or an offer to the public in any other member state of the European Economic Area within the meaning of the Prospectus Directive (which includes any relevant implementing measure in any Member State of the European Economic Area);
(p) it is aware of and acknowledges that it is required to comply with its obligations in connection with money laundering under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006 and the Money Laundering Regulations 2007 (the “Regulations”) and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations;
(q) it is aware of the obligations regarding insider dealing in the Criminal Justice Act 1993, with all applicable provisions of FSMA, the EU Market Abuse Regulation 596/2014 and the Proceeds of Crime Act 2002 and confirms that it has and will continue to comply with those obligations;
(r) time is of essence as regards its obligations under this Appendix;
(s) the allocation, allotment, issue and delivery to it, or the person specified by it for registration as a holder of Placing Shares, will not give rise to a stamp duty or stamp duty reserve tax liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that no instrument under which it acquires Placing Shares (whether as principal, agent or nominee) would be subject to stamp duty or the increased rates referred to in those sections and that it, or the person specified by it for registration as a holder of Placing Shares, is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability or in connection with arrangements to issue depositary receipts or to issue or transfer Placing Shares into a clearance service;
(t) it, or the person specified by it for registration as a holder of the Placing Shares, will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto), if any, payable on acquisition of any of the Placing Shares or the agreement to acquire the Placing Shares and acknowledges and agrees that none of Numis, the Company, any of their respective affiliates or any person acting on behalf of them will be responsible for any such liability to stamp duty or stamp duty reserve tax. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing, and agrees to indemnify the Company and Numis (and any of their respective affiliates) on an after-tax basis in respect of the same, on the basis that the Placing Shares will be allotted to the CREST stock account of Numis who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;
(u) neither of Numis, nor any of their affiliates, nor any person acting on behalf of any of them has or shall have any liability for any information, representation or statement contained in this Announcement or for any information previously published by or on behalf of the Company or any other written or oral information made available to or publicly available or filed information or any representation, warranty or undertaking relating to the Company, and will not be liable for its decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement or elsewhere, provided that nothing in this paragraph shall exclude any liability of any person for fraud;
(v) neither of Numis, nor any of their affiliates, nor any person acting on behalf of any of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that its participation in the Placing is on the basis that it is not and will not be a client of Numis and that Numis has duties or responsibilities to it for providing the protections afforded to its clients or customers under the rules of the FCA, for providing advice in relation to the Placing, in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement or for the exercise or performance of any of its rights and obligations thereunder, including any rights to waive or vary any conditions or exercise any termination right;
(w) in order to ensure compliance with the Money Laundering Regulations 2007, Numis (for itself and as agent on behalf of the Company) or the Company’s registrars may, in their absolute discretion, require verification of its identity. Pending the provision to Numis or the Company’s registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at Numis’ absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form, may be retained at Numis’ or the Company’s registrars’, as the case may be, absolute discretion. If within a reasonable time after a request for verification of identity Numis (for itself and as agent on behalf of the Company) or the Company’s registrars have not received evidence satisfactory to them, Numis and/or the Company may, at its absolute discretion, terminate its commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee’s bank from which they were originally debited;
(x) Numis may, and their affiliates acting as an investor for its or their own account(s) may, acquire and/or purchase Placing Shares and, in that capacity may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise. Accordingly, references in this Announcement to the Placing Shares being offered, subscribed, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by Numis and/or any of their respective affiliates acting as an investor for its or their own account(s). Neither Numis nor the Company intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so;
(y) these terms and conditions and any agreements entered into by it pursuant to these terms and conditions, and all non-contractual or other obligations arising out of or in connection with them, shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or Numis in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;
(z) the Company and Numis and their respective affiliates and others will rely upon the truth and accuracy of the foregoing agreements, acknowledgements, representations, warranties and undertakings which are given to Numis, on its own behalf and on behalf of the Company, and are irrevocable;
(aa) it irrevocably appoints any duly authorised officer of Numis as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares for which it agrees to subscribe or purchase upon the terms of this Announcement;
(bb) it will indemnify on an after tax basis and hold the Company, Numis and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, undertakings, agreements and acknowledgements in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;
(cc) it has knowledge and experience in financial, business and international investment matters and is required to evaluate the merits and risks of subscribing for the Placing Shares; (ii) it is experienced in investing in securities of this nature and is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain a complete loss in connection with the Placing; and (iii) it has relied upon its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved and has satisfied itself concerning the relevant tax, legal, currency and other economic consideration relevant to its subscription for Placing Shares;
(dd) to the fullest extent permitted by law, it acknowledges and agrees to the disclaimers contained in this Impact Announcement (including this Appendix); and
(ee) its commitment to acquire Placing Shares on the terms set out herein and in the contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company’s conduct of the Placing;
(ff) the Placing Shares have not been and will not be registered under the US Securities Act, or with any securities regulatory authority of any state or jurisdiction of the United States and may not be offered, sold or transferred, directly or indirectly, into or within the United States absent registration under the US Securities Act or an available exemption from, or as part of a transaction not subject to, the registration requirements of the Securities Act and in each case, in compliance with any applicable securities laws of any state or other jurisdiction of the United States; and no representation is being made as to the availability of any exemption under the US Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares;
(gg) it, and any prospective beneficial owner for whose account or benefit it is purchasing the Placing Shares, is and, at the time the Placing Shares are subscribed for will be, (i) located outside the United States and is acquiring the Placing Shares in an “offshore transaction” as defined in, and in accordance with, Regulation S; or (ii) is located in the United States and, is a QIB, in which case it is acquiring the Placing Shares by way of a private placement in a transaction exempt from the registration requirements of the US Securities Act and it has or will duly execute a US investor letter in the form to be provided and deliver the same to Numis or the Company, and its participation in the Placing is in the absolute discretion of Numis;
(hh) it is not acquiring Placing Shares as a result of any “directed selling efforts” as defined in Regulation S or as a result of any form of “general solicitation” or “general advertising” (within the meaning of Rule 502(c) of Regulation D of the US Securities Act);
(ii) it is acquiring the Placing Shares for investment purposes and is not acquiring the Placing Shares with a view to, or for offer or sale in connection with, any distribution thereof (within the meaning of the US Securities Act) that would be in violation of the securities laws of the United States or any state thereof;
(jj) it acknowledges that any Placing Shares offered and sold in the United States are “restricted securities” within the meaning of Rule 144(a)(3) under the US Securities Act and further agrees that, so long as the Placing Shares are restricted securities, it will segregate such Placing Shares from any other shares in the Company that it holds that are not restricted securities and will not deposit the Placing Shares into any depositary receipt facility maintained by any depositary bank in respect of the Company’s ordinary shares; and
(kk) the Company may be a passive foreign investment company (“PFIC”) for US federal income tax purposes, and it could be a PFIC in future years; if the Company is a PFIC, then US taxable investors may be subject to adverse US tax consequences in respect of their investment in the Company’s shares; if the Company is a PFIC, US investors may be able to mitigate these adverse US tax consequences by making certain elections for US tax purposes.
7.2 The representations, warranties, acknowledgements and undertakings contained in this Appendix are given to Numis for itself and on behalf of the Company and are irrevocable and shall not be capable of termination in any circumstances.
7.3 The agreement to settle a Placee’s subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares, UK stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor Numis will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and Numis in the event that any of the Company and/or Numis has incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify Numis accordingly.
7.4 The Company and Numis are not liable to bear any stamp duty, stamp duty reserve tax, or other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest or penalties) that arise on a sale of Placing Shares subsequent to their acquisition by Placees.
7.5 In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the subscription by them of any Placing Shares or the agreement by them to acquire any Placing Shares.
7.6 Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing, and agrees to indemnify the Company and Numis on an after-tax basis in respect of the same, on the basis that the Placing Shares will be allotted to the CREST stock account of Numis who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions.
7.7 Each Placee, and any person acting on behalf of the Placee, acknowledges and agrees that Numis does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.
7.8 Each Placee and any person acting on behalf of each Placee, acknowledges and agrees that Numis or any of its affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.
7.9 When a Placee or person acting on behalf of the Placee is dealing with Numis, any money held in an account with Numis on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under FSMA. The Placee acknowledges and agrees that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from Numis’ money in accordance with the client money rules and will be used by Numis in the course of its own business; and the Placee will rank only as a general creditor of Numis (as applicable).
7.10 Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.
7.11 Neither the content of the Company’s website nor any website accessible by hyperlinks on the Company’s website is incorporated in, or forms part of, this Announcement.
7.12 All times and dates in this Announcement may be subject to amendment. Numis shall notify the Placees and any person acting on behalf of a Placee of any changes.
DEFINITIONS
The following definitions apply throughout this Announcement unless the context otherwise requires:
“Acquisition” – the proposed acquisition of the entire issued share capital of Guardian Electrical Compliance Limited pursuant to the terms of the Acquisition Agreement
“Acquisition Agreement” the sale and purchase agreement dated on or around the date of this Announcement between (1) the Vendors; (2) PTSG Electrical Services Limited; and (3) the Company;
“Admission” – admission of the Placing Shares to AIM
“AIM” – means the market of that name operated by the London Stock Exchange
“AIM Rules” – means the provisions of the London Stock Exchange’s AIM Rules for Companies as amended from time to time governing, inter alga, admission to AIM and the continuing obligations of AIM companies
“Announcement” – this announcement (including the Appendix to this announcement)
“Company” – Premier Technical Services Group PLC
“CREST” – the relevant system (as defined in the Uncertificated Securities Regulations 2001) for the paperless settlement of trades and the holding of uncertificated securities operated by Euroclear UK & Ireland Limited
“FCA” – the Financial Conduct Authority
“FSMA” – the Financial Services and Markets Act of 2000 (as amended)
“Group” – the Company and its subsidiary undertakings prior to completion of the Acquisition
“London Stock Exchange” – London Stock Exchange PLC
“Numis” – Numis Securities Limited
“Ordinary Shares” – ordinary shares of one penny each in the capital of the Company
“PFIC” – passive foreign investment company for US federal income tax purposes
“Placing” – the conditional placing of the Placing Shares at the Placing Price by Numis as agents for and on behalf of the Company pursuant to the terms of the Placing Agreement
“Placing Agreement” – the conditional placing agreement dated 15 October 2018 between the Company and Numis relating to the Placing
“Placing Price” – has the meaning given in paragraph 3.4 of this Appendix
“Placing Shares” – means the number of new Ordinary Shares to be allotted and issues by the Company pursuant to the Placing, as set out in the executed term sheet to be entered into between Numis and the Company in connection with the Placing
“Prospectus Directive” – the Directive of the European Parliament and of the Council of the European Union 2003/71/EC, as amended
“UK” or “United Kingdom” – the United Kingdom of Great Britain and Northern Ireland
“Vendors” means Ian Carnall and others as more particularly set out in the Acquisition Agreement
