Acquisition of Whim Gully Capital LLP
28 8월 2009 - 10:30PM
UK Regulatory
TIDMEVOL TIDMSHCP TIDMASTR
RNS Number : 2164Y
Evolve Capital PLC
28 August 2009
Evolve Capital PLC ("Evolve" or the "Company")
Acquisition of Whim Gully Capital LLP (as enlarged by the acquisition of the St
Helen's Capital Business) and Notice of General Meeting
Following the announcement of 21 July 2009, Evolve is pleased to announce that
it has entered into an agreement pursuant to which it has agreed to acquire 100
per cent. of the Membership Interests in Whim Gully Capital LLP ("WGC") for an
aggregate cash consideration of GBP475,000, subject to the fulfilment of certain
conditions including the passing of the Resolution.
WGC has entered into a conditional agreement to acquire the St Helen's Capital
Business from St Helen's Capital and the WGC Acquisition by Evolve is
conditional, inter alia, on completion of the St Helen's Capital Acquisition.
WGC is owned by Edward Vandyk, his wife, Oliver Vaughan and Oliver Cooke. As
Oliver Vaughan and Edward Vandyk are directors of Evolve, the non-executive
directors of Evolve, being Michael Jackson, James Noble and David Snow, are
independent directors for the purpose of approving the WGC Acquisition on behalf
of Evolve and recommending the Resolution to Shareholders.
If Shareholders approve the Resolution, following Completion Evolve will be the
holding company of the following two subsidiaries:
+----------------------------------------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| (i) | WGC (incorporating the St Helen's Capital Business), which will be a wholly owned subsidiary and following completion of the intended arm's length intra-group transfers outlined below will provide PLUS-market services and will have 39 clients listed on the PLUS-quoted market (based on the number of clients at the date of this announcement); and |
+----------------------------------------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | |
+----------------------------------------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| (ii) | Astaire, an AIM-listed investment banking group owned as to approximately 54 per cent. by the Company, which via its subsidiaries will, following completion of the intended arm's length intra-group transfers outlined below, continue to provide a range of corporate finance and broking services and will have 91 clients listed on AIM (based on the number of clients at the date of this announcement), in addition to its other financial services |
+----------------------------------------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
1. Information on WGC
WGC is a corporate finance business that is authorised and regulated by the FSA.
The firm is also an accredited PLUS Corporate Adviser and broker. The firm's
focus is on assisting successful private companies to raise new equity or loan
finance and to join the PLUS-quoted market.
WGC also provides corporate finance advice and support in connection with a wide
range of other matters including acquisitions, corporate restructuring,
secondary fundraising and transfers to and from other markets. WGC is currently
appointed as PLUS Corporate Adviser to three PLUS-quoted companies.
In the year to 30 June 2009, the audited results of WGC show a distributable
profit of GBP64,612 on turnover of GBP307,067. Net assets at 30 June 2009 were
GBP190,243, which included GBP176,620 in cash.
2. Information on St Helen's Capital
The St Helen's Capital Business, which is the subject of the St Helen's Capital
Acquisition, is that of an independent institutional stockbroker and corporate
finance adviser focused on companies in the small cap sector. The St Helen's
Capital Business provides its services, including research, to corporate clients
traded on AIM or PLUS or which are at the pre-IPO stage. As at the date of this
announcement, the St Helen's Capital Business is broker to 8 AIM traded
companies and PLUS Corporate Adviser to 20 PLUS-quoted companies. St Helen's
Capital is authorised by the FSA and is a member of the London Stock Exchange.
St Helen's Capital today announced its unaudited results for the financial year
ending 31 March 2009. The results show a loss after tax of GBP1,305,990 on
revenue of GBP1,065,532. The revenues derive almost entirely from the St Helen's
Capital Business, the subject of the St Helen's Capital Acquisition. St Helen's
Capital's unaudited balance sheet at 31 March 2009 showed net assets of
GBP1,101,163. St Helen's Capital will retain a number of its existing assets
following completion of the St Helen's Capital Acquisition which includes cash
and a portfolio of quoted and unquoted investments. Further details of the St
Helen's Capital Acquisition are set out below.
Since the end of the financial year, St Helen's Capital has stated that trading
conditions have continued to be extremely challenging for it.
3. Background to and Reasons for the WGC Acquisition
Evolve was initially floated on AIM in 2007 to invest in companies on or
intending to join the PLUS-quoted market and it has continued to pursue such
opportunities. As envisaged at the time of Evolve's flotation, WGC has been the
originator of Evolve's PLUS investments and other investment proposals.
The Independent Directors' continued belief in the PLUS Market proposition and
its future has led them to propose the WGC Acquisition which, with the benefit
of the St Helen's Capital Acquisition will, they believe, make Evolve one of the
largest advisers to PLUS-quoted companies, as measured by the number of
corporate clients. The WGC Acquisition provides Evolve with another established
PLUS Corporate Adviser and broker in the form of the St Helen's Capital
Business, which would otherwise be difficult and expensive for Evolve to acquire
directly, particularly as Evolve does not have the requisite FSA and PLUS
regulatory status.
Evolve is also the parent company of Astaire, an AIM quoted company of which
Evolve holds approximately 54 per cent. of the issued share capital. Astaire
owns Astaire Securities, which is focused on the provision of investment banking
services to institutional and corporate clients, principally on AIM and the
Official List. Astaire has also recently completed the acquisitions of Dowgate
and Ruegg, which are (or were in the case of Ruegg) AIM Nominated Advisers and
are both PLUS Corporate Advisers. These acquisitions place the Astaire Group as
one of the largest Nominated Advisers and brokers to AIM companies, as measured
by the number of companies for which it acts, and it will continue to focus its
activities on the AIM market.
It is intended that once the WGC Acquisition is completed, arm's length
arrangements will be made whereby all the AIM clients acquired with the St
Helen's Capital Business will be transferred to Astaire Group and all of Astaire
Group's PLUS-quoted clients, including those recently acquired with Dowgate and
Ruegg, will be transferred to WGC, and thus Evolve. As at the date of this
announcement, Astaire Group is the PLUS Corporate Adviser to 16 PLUS-quoted
companies.
The Independent Directors believe that this rationalises the corporate
businesses according to the PLUS and AIM markets and provides each of Astaire
and WGC with a critical mass of clients for future operations.
In order to service the respective client bases it is intended that certain
employees of the St Helen's Capital Business will become employed by Astaire
Group, whilst Evolve will retain those employees focussed on its PLUS
activities. This and other cost cutting measures proposed by WGC will enable
overheads in the current St Helen's Capital Business to be materially reduced.
It is also proposed that Evolve will put in place a suitable share option based
incentive scheme for its new employees.
The Independent Directors believe that the WGC Acquisition is a particularly
beneficial and strategic consolidation for Evolve as the scale and scope of the
enlarged Evolve Group should enable it to take advantage of opportunities that
arise in the small cap sector, whether that be via WGC and PLUS or through
Astaire Group and its AIM focus.
4. Related party transaction
As the acquisition by the Company of the Membership Interests of each of Edward
Vandyk and Oliver Vaughan (and their connected parties (as applicable)) each
constitutes a substantial property transaction for the purposes of section 190
of the CA 2006, the approval of Shareholders of such acquisition is required.
Oliver Vaughan and Edward Vandyk, the Chairman and Executive Director of the
Company respectively, are Sellers and also Directors and whilst they are able to
vote on the Resolution, it is appropriate that they do not vote on, or take any
part in, any Board recommendation to disapprove or approve the Resolution.
The WGC Acquisition also constitutes a related party transaction for the
purposes of Rule 13 of the AIM Rules for Companies. The Independent Directors
consider, having consulted the Company's nominated adviser, Fairfax, that the
terms of the WGC Acquisition are fair and reasonable insofar as Shareholders are
concerned.
5. Key terms of the WGC Acquisition Agreement
The Company has conditionally agreed to acquire the Memberships Interest of each
of the Sellers for an aggregate cash consideration of GBP475,000 which is due to
be paid on Completion.
Prior to Completion the Sellers have agreed to procure that WGC will carry on
its business in the ordinary and usual course in accordance with certain
restrictions set out in the WGC Acquisition Agreement.
The WGC Acquisition Agreement contains customary warranties from the Sellers to
the Company. Furthermore, the Sellers have agreed not to allow or procure, and
to procure that WGC will not allow or procure, any act or omission which would
render any such warranties untrue, inaccurate or misleading if repeated at any
time prior to Completion, save that this does not apply to all matters arising
out of or and in connection with the St Helen's Capital Business Purchase
Agreement.
Completion of the WGC Acquisition is conditional on: (a) receipt of the FSA's
consent to the Company being a 50 per cent. or more controller of WGC as
described under Part XIII of FSMA and such consent not having lapsed or been
withdrawn (notwithstanding any subsequent renewal of the same) prior to
Completion; (b) completion of the St Helen's Capital Business Purchase Agreement
in accordance with its terms; and (c) the passing of the Resolution.
Following Completion WGC will be a wholly owned subsidiary undertaking of the
Company. The FSA has given its consent to Evolve becoming the ultimate
controlling shareholder of WGC's regulated financial services business noted in
condition (a) above.
6. Key terms of the St Helen's Capital Business Purchase Agreement
WGC has conditionally agreed to acquire the St Helen's Capital Business for an
aggregate cash consideration of GBP200,000 which is due to be paid on completion
of the St Helen's Capital Business Purchase Agreement. The St Helen's Capital
Business comprises all the institutional stockbroking, corporate finance and
PLUS corporate advisory work currently undertaken by St Helen's Capital. The St
Helen's Capital Business Purchase Agreement also allows WGC to use the name "St
Helen's Capital" or derivatives thereof, following completion of the St Helen's
Capital Acquisition.
Prior to completion of the St Helen's Capital Acquisition, St Helen's Capital
has agreed to procure that it will carry on its business in the ordinary and
usual course in accordance with certain restrictions set out in the St Helen's
Capital Business Purchase Agreement.
The St Helen's Capital Business Purchase Agreement contains customary warranties
from St Helen's Capital to WGC. WGC has reserved the right to assign its right,
title, benefit and interest in and to such Warranties and any claims arising
under the St Helen's Capital Business Purchase Agreement to any member of its
group. St Helen's Capital has agreed not to allow or procure, and to procure
that it will not allow or procure, any act or omission which would render any
such warranties untrue, inaccurate or misleading if repeated at any time prior
to completion of the St Helen's Capital Business Purchase Agreement.
Completion of the St Helen's Capital Acquisition is conditional, inter alia, on
the despatch by St Helen's Capital to its shareholders of a circular convening a
general meeting and the passing at that general meeting of certain resolutions
approving, inter alia, the St Helen's Capital Acquisition.
7. General Meeting and Circular to Shareholders
A circular will be posted to Shareholders today containing a notice convening
the General Meeting of the Company to be held at 11.00 a.m. on 14 September 2009
at 223a Kensington High Street, London W8 6SG at which the Resolution will be
proposed. Further copies of the circular will be available from the Company's
website, www.evolvecapital.co.uk.
8. Recommendation
The Independent Directors consider that the terms of the WGC Acquisition are
fair and reasonable and in the best interests of Shareholders as a whole.
Accordingly the Independent Directors unanimously recommend that all
Shareholders vote in favour of the Resolution at the General Meeting as they
have undertaken to do so in respect of their own beneficial holdings of
4,596,250 Ordinary Shares representing approximately 2.72 per cent. of the
issued share capital of the Company as at the date of this announcement.
Oliver Vaughan and Edward Vandyk took no part in the decision of the Independent
Directors decision to recommend Shareholders to vote in favour of the
Resolution.
Enquiries:
Evolve Capital PLC
Edward Vandyk
James Noble
Tel: 020 7937 4445
Fairfax I.S. PLC - Nominated Adviser & Broker
Jeremy Porter
Tel: 020 7598 5368
Maitland - Financial PR
Neil Bennett / George Hudson
Tel: 020 7379 5151
The following definitions apply throughout this announcement, unless the context
requires otherwise:
+------------------------+----------------------------------------------+
| "AIM Rules for | the rules of the London Stock Exchange |
| Companies" | governing the admission of securities to |
| | trading on and the regulation and operation |
| | of AIM; |
+------------------------+----------------------------------------------+
| "AIM" | the AIM market operated by the London Stock |
| | Exchange; |
+------------------------+----------------------------------------------+
| "Astaire" | Astaire Group PLC, a company incorporated in |
| | England and Wales with registered number |
| | 01796133; |
+------------------------+----------------------------------------------+
| "Astaire Group" | Astaire and its subsidiaries; |
+------------------------+----------------------------------------------+
| "Astaire Securities" | Astaire Securities PLC; |
+------------------------+----------------------------------------------+
| "Board" or "Directors" | the directors of the Company as at the date |
| | of this document; |
+------------------------+----------------------------------------------+
| "CA 2006" | the Companies Act 2006, to the extent in |
| | force; |
+------------------------+----------------------------------------------+
| "Completion" | completion of the WGC Acquisition; |
+------------------------+----------------------------------------------+
| "Dowgate" | Dowgate Capital PLC |
+------------------------+----------------------------------------------+
| "Evolve Group" | Evolve and its subsidiaries; |
+------------------------+----------------------------------------------+
| "Evolve" or the | Evolve Capital PLC; |
| "Company" | |
+------------------------+----------------------------------------------+
| "Fairfax" | Fairfax I.S. PLC; |
+------------------------+----------------------------------------------+
| "FSA" | Financial Services Authority; |
+------------------------+----------------------------------------------+
| "FSMA" | the Financial Services and Markets Act 2000; |
+------------------------+----------------------------------------------+
| "General Meeting" | the general meeting of the Company to be |
| | held at 11.00 a.m. on 14 September 2009 at |
| | 223a Kensington High Street, London W8 6SG; |
+------------------------+----------------------------------------------+
| "Independent | Michael Jackson, James Noble and David Snow; |
| Directors" | |
+------------------------+----------------------------------------------+
| "London Stock | London Stock Exchange PLC; |
| Exchange" | |
+------------------------+----------------------------------------------+
| "Membership Interest" | in relation to a Seller, that Seller's |
| | interest of and in the capital of WGC; |
+------------------------+----------------------------------------------+
| "Membership Interests" | the aggregate of each Membership Interest; |
+------------------------+----------------------------------------------+
| "Nominated Adviser" | an adviser whose name appears on the |
| | register of nominated advisers held by the |
| | London Stock Exchange; |
+------------------------+----------------------------------------------+
| "Ordinary Shares" | ordinary shares of 1p each in the capital of |
| | the Company; |
+------------------------+----------------------------------------------+
| "PLUS Corporate | a PLUS member firm which has been approved |
| Adviser" | by PLUS to act in the capacity of corporate |
| | adviser and has been admitted to the |
| | register of such advisers; |
+------------------------+----------------------------------------------+
| "PLUS" | PLUS Markets PLC, a recognised investment |
| | exchange; |
+------------------------+----------------------------------------------+
| "PLUS-quoted market" | the PLUS primary market segment operated by |
| | PLUS; |
+------------------------+----------------------------------------------+
| "Resolution" | the resolution of Shareholders to approve |
| | the WGC Acquisition to be proposed at the |
| | General Meeting; |
+------------------------+----------------------------------------------+
| "Ruegg" | Ruegg & Co. Limited |
+------------------------+----------------------------------------------+
| "Sellers" | Edward Vandyk, Susan Vandyk, Oliver Vaughan |
| | and Oliver Cooke and "Seller" shall be |
| | construed accordingly; |
+------------------------+----------------------------------------------+
| "Shareholders" | holders of Ordinary Shares from time to |
| | time; |
+------------------------+----------------------------------------------+
| "St Helen's Capital" | St Helen's Capital PLC, a company |
| | incorporated in England and Wales with |
| | registered number 3515836; |
+------------------------+----------------------------------------------+
| "St Helen's Capital | the proposed acquisition by WGC of the St |
| Acquisition" | Helen's Capital Business pursuant to and in |
| | accordance with the terms of the St Helen's |
| | Capital Business Purchase Agreement; |
+------------------------+----------------------------------------------+
| "St Helen's Capital | the business and certain assets of St |
| Business" | Helen's Capital which are the subject of the |
| | St Helen's Capital Acquisition; |
+------------------------+----------------------------------------------+
| "St Helen's Capital | the conditional sale and purchase agreement |
| Business Purchase | dated 28 August 2009 between WGC (1), St |
| Agreement" | Helen's Capital (2), Astaire (3) and the |
| | Company (4) relating to the St Helen's |
| | Capital Acquisition; |
+------------------------+----------------------------------------------+
| "WGC Acquisition" | the proposed acquisition of the Membership |
| | Interests in WGC by the Company pursuant to |
| | and in accordance with the terms of the WGC |
| | Acquisition Agreement; |
+------------------------+----------------------------------------------+
| "WGC Acquisition | the conditional sale and purchase agreement |
| Agreement" | dated 28 August 2009 between the Sellers (1) |
| | and the Company (2) relating to the WGC |
| | Acquisition; and |
+------------------------+----------------------------------------------+
| "WGC" | Whim Gully Capital LLP, a limited liability |
| | partnership incorporated in England and |
| | Wales with registered number 313430. |
+------------------------+----------------------------------------------+
| | |
+------------------------+----------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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