Admission to Trading on AIM
February 23 2007 - 2:00AM
UK Regulatory
RNS Number:7489R
Redknee Solutions Inc.
23 February 2007
For Immediate Release 23 February 2007
NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN OR INTO THE UNITED STATES, THE
REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA, CANADA, JAPAN OR AUSTRALIA,
OR THEIR RESPECTIVE TERRITORIES OR POSSESSIONS
Redknee Solutions Inc.
Placing of 16,700,000 Common Shares at a price of 105p per share
and
Admission to trading on AIM
The board of Redknee Solutions Inc. ("Redknee" or "the Company") a provider of
telecommunications infrastructure software solutions, is pleased to announce
that its shares have been admitted to trading on the AIM market of the London
Stock Exchange today ("Admission"). In conjunction with Admission, the Company
has raised #17.5 million (CAD $40 million) gross, (#15.6 million (CAD$35.7
million) net of expenses) through the placing of 16,700,000 of the Company's
common shares (the "Placing") at 105 pence each (the "Placing Price"). The
Placing was undertaken by Canaccord Adams Limited as Nominated Advisor and
Broker. Redknee has a market capitalisation of approximately #68 million (CAD
$155 million) on a fully diluted basis at the Placing Price. The Company's
trading symbol is RKN.
Key points of the Flotation
*Redknee markets, develops and licences infrastructure software and
provides related professional services for mobile operators internationally.
*Redknee's solutions help a number of the world's leading mobile operators
(including O2, Orange, T-Mobile and Vodafone) to price and charge for
enhanced services and multi-media content while managing subscribers'
privacy and preferences.
*Redknee's monetization and personalization solutions are designed to be
easily integrated with its customers' existing switching, data and messaging
infrastructure.
*Redknee's converged billing solutions help many of the world's emerging
growth mobile operators (including Digicel, Bakrie Telecom and TSTT) to
rapidly bring to their markets innovative service offerings.
*Use of proceeds and reasons for admission:
*expand the Group's sales, marketing and customer support
capabilities;
*repay certain credit facilities;
*fund the Group's ongoing research and product development;
*fund the general working capital requirements of the Group's
businesses; and
*raise the profile of the Group
*The Placing was well received by institutional investors in the UK,
Europe and North America.
Commenting on the Placing, Lucas Skoczkowski, CEO of Redknee, said:
"We are delighted with the great response from the investment community and
believe the success of the flotation has as much to do with the quality of our
people as it does to do with our product offering."
"At this exciting junction in the Company's development, Redknee will look to
enhance its position with its Tier 1 mobile customers and accelerate its
business with the fast growing, emerging markets, mobile operators."
For further details please contact:
Redknee Solutions Inc. Tel: +1 905 625 2622
Lucas Skoczkowski, Chief Executive Officer Fax: +1 905 625 2773
Colley Clarke, Chief Financial Officer
Buchanan Communications Tel: +44 (0) 20 7466 5000
Jeremy Garcia / Simon Potter
Canaccord Adams Tel: +44 (0) 20 7050 6500
Neil Johnson / Ryan Gaffney
PLACING STATISTICS
Placing Price 105p
Number of Existing Common Shares 42,359,934
Number of Placing Shares being issued by the Company pursuant
to the Placing 16,700,000
Number of Common Shares in issue immediately following
Admission 59,059,934
Number of Common Shares under option immediately following
Admission 6,123,606
Fully diluted share capital following the Placing 65,183,540
Percentage of the Enlarged Share Capital being placed pursuant
to the Placing 28.3%
Total proceeds of the Placing #17,500,000
Estimated net proceeds of the Placing receivable by the Company #15,600,000
Fully diluted market capitalisation of the Company at the
Placing Price following Admission #68,442,717
ISIN number CA7575241038
CUSIP number 757524103
Notes:
1. Fully diluted share capital assumes the exercise of all of the options over
Common Shares which have not lapsed or been cancelled, further details of which
are set out in paragraph 2 of Part IV of the admission document.
2. The estimated net proceeds receivable by the Company are stated after the
deduction of the estimated costs, charges, commissions and expenses payable by
the Company in connection with the Placing and Admission.
All defined terms in this announcement shall, unless the context otherwise
requires, have the same meaning as in Redknee's admission document Dated 21
February 2007 (the "Admission Document"). Copies of the Document in are
available at Canaccord's offices at Cardinal Place, 7th Floor, 80 Victoria
Street, London SW1 5JL during normal business hours on any weekday (other than
Saturdays, Sundays and public holidays) for one month from the date of this
announcement.
This press release is not for publication or distribution or release in the
United States of America (including its territories and possessions, any State
of the United States of America and the District of Columbia), the Republic of
Ireland, the Republic of South Africa, Australia or Japan. The information
contained herein does not constitute or form part of an offer or solicitation of
an offer to purchase or subscribe for securities for sale in the United States,
the Republic of Ireland, the Republic of South Africa, Australia or Japan or any
other jurisdiction. The securities referred to herein have not been and will not
be registered under the United States Securities Act of 1933, as amended and may
not be offered or sold in the United States unless registered or pursuant to an
exemption from such registration. No public offering of securities is being
made in the United States.
Canaccord Adams Limited are acting for Redknee and no one else in connection
with the Placing and Admission and will not be responsible to any other person
for providing the protections afforded to its clients or for providing advice in
relation to the Placing and Admission.
Certain statements herein may constitute forward-looking statements, including
those identified by the expressions "may", "will", "should", "could",
"anticipate", "believe", "plan", "estimate", "potential", "expect", "intent" and
similar expressions to the extent they relate to the Company or its managements.
These statements reflect the Company's current expectations and are based on
information currently available to management. These forward-looking statements
are subject to a number of risks, uncertainties, assumptions and other factors
that could cause actual results or events to differ materially from current
expectations, including the matters discussed under "Risk Factors" contained in
the Admission Document. These forward-looking statements are made as of the date
hereof, and the Company assumes no obligation to update or revise them to
reflect new events or circumstances.
ADDITIONAL INFORMATION
INTRODUCTION
The Group markets, develops and licences infrastructure software and provides
related professional services for mobile communications service providers
internationally. Redknee's core products and services provide solutions for
monetizing the value of events and transactions in mobile communications
networks on a real-time basis and for personalizing communications service
offerings for mobile subscribers. The Group's solutions help a number of the
world's leading mobile communications service providers to price and charge for
enhanced services and multi-media content while managing subscribers'
preferences and privacy.
The Group's solutions enable mobile communications service providers to segment
their subscriber base, create bundles of voice, data and content services and
price such services based on their value and context and also enable new
network-based Value Added Subscriber (VAS) offerings, thereby extending and
enhancing the service providers' offerings and business capabilities.
Thirty customers, which include some of the world's leading mobile service
network operators, have licensed the group's software products to deliver VAS
and enable the delivery of content on networks across more than 20 countries.
HISTORY
Redknee was founded in 1999 and subsequently grew in the year 2000 to include a
group of experienced employees and managers from, amongst others, Nortel
Networks Limited, Clearnet Communications Inc. (now TELUS Mobility, the wireless
business unit of TELUS Corporation), Bell Mobility Cellular Inc. (now Bell
Mobility, the wireless business unit of Bell Canada Enterprises) and
Microsoft Canada Co. The Group currently has operations in Canada, the United
Kingdom, Ireland, Germany and India and employs approximately 330 full time
employees. To date, the Group has grown primarily from internally generated
capital with no significant external investment.
In 2006, the Group was recognised as being among the top 15 emerging companies
in the wireless communications industry by industry publication FierceWireless.
The Directors believe that the Group is also well positioned to capitalise on
the growing demand for monetization and personalization solutions in fixed and
broadband networks.
THE MARKET OPPORTUNITY
According to Dittberner Associates, there is increased demand for real-time
monetization requirements in both pre-paid and post-paid mobile markets and this
is generating business for converged rating, charging, service control and
billing. According to Juniper Research, over US$4.8 billion will be spent by
communications service providers on converged billing solutions from 2006 to
2011 with annual expenditures on converged billing solutions forecasted to grow
from US$299 million in 2006 to approximately US$1.1 billion in 2011, suggesting
an average annual growth rate for mobile converged pre-paid and post-paid
solutions of 30 per cent.
The Directors believe that the emerging communications service provider model
will consist of fragmented and changing offerings comprising a wide variety of
third party content and services, contextual services, differing payment
mechanisms that must be supported concurrently and new business models that will
subsidise or otherwise reallocate content and service costs to other entities
such as advertisers. The Directors believe that these market dynamics will
stimulate increasing demand for the Group's monetization and personalization
products and services.
THE GROUP'S SOLUTIONS
The Group's software solutions enable mobile communications service providers to
segment their subscriber base, create bundles of voice, data and content
services and price services based on value and context. The Group's software
solutions also enable new network-based VAS that extend and enhance its
customers' service offerings and business capabilities.
The Group's monetization and personalization solutions are designed to be easily
integrated with its customers' existing switching, data and messaging
infrastructure. The implementation of these processing capabilities allows
network operators to deploy a broad suite of services to subscribers on
pre-paid, post-paid or hybrid plans for both pre-IMS and IMS-based networks.
The Group's solutions are both configurable and scalable to meet a high level of
customer requirements without incremental customisation or development. This has
been achieved through a modular architecture and protocol ''wrappers'' that
adapt to networks incorporating proprietary interfaces and legacy OSS/BSS
systems. The Group's software code base is largely written in JAVA and is all
multi-threaded which allows parallel processing of transactions and efficient
scaling of the Group's software products for increased capacity while
maintaining a high degree of reliability. The architecture of the Group's
software products has been designed so that they can be scaled to address Tier 1
network requirements by clustering servers. At the same time, this software can
also be packaged and bundled into turnkey solutions onto smaller servers that
meet the ''pay-as-you-grow'' economics of emerging growth mobile network
operators.
Due to their modular and complementary design, the Group's monetization and
personalization software products integrate with one another, providing its
customers with incremental efficiencies when they purchase multiple products
directly from it, as opposed to implementing multiple stand-alone products. The
modular design of the Group's software facilitates its continued evolution and
configuration, even after it has been implemented in customers' networks. This
unified design allows for the easy addition of new capabilities and efficiencies
to its customers' existing OSS/BSS network infrastructure and allows the Group's
products to be easily adapted to its customers' evolving market requirements.
THE GROUP'S CUSTOMERS
Since its inception in 1999, the Group's customer base has grown to 30 mobile
communications service providers, which provide services to over 275 million
wireless subscribers in over 20 countries. The Group's customer base includes
four of the 10 largest mobile communications service providers or groups world
wide, determined by subscriber count. The Group's ISO 9001:2000 certified
infrastructure software provides these mobile communications service providers
with the capability to monetize and personalize up to 2.4 billion transactions
every month. Customers that have purchased products from the Group to date
include:
Bakrie Telecom Cingular Digicel e-plus O2 Ireland
MTC O2 Germany O2 UK Orange Rogers
Safaricom T-Mobile TSTT Vodafone Vodafone-SmartTone
THE GROUP'S GROWTH STRATEGY
The Group's objective is to become a leading provider of mobile communications
infrastructure software for the global mobile communications services industry
by pursuing the following strategies:
Continue Technology Innovation
The Directors believe that the Group's success to date has depended, in part, on
its ability to identify and develop or extend its monetization and
personalization software solutions to address its customers' evolving technology
platforms and service requirements. The Group also intends to continue to make
significant investments in the development of technology solutions for its
targeted markets. The Group intends to continue adding functionality and
capabilities to its existing technologies in a manner that will enable its
technologies to address the evolutionary requirements of its customers in a
scalable and modular fashion.
Target New Wireless Service Providers and Channels in Emerging Markets
The Group intends to target and acquire new customers in emerging markets by
marketing its products to national licensed wireless communications network
operators in low tele density regions around the world including India, Central
and Eastern Europe, Southeast Asia and China. In these markets, the Group
positions its products as an end-to-end turnkey solution offered to customers on
a ''pay-as-you-grow'' basis.
Expand the Business with Tier 1 Wireless Service Providers
The Group intends to expand its business with Tier 1 service providers who
typically implement its technology for specific monetization and personalization
applications and to complement their existing OSS/BBS infrastructure. Selling
additional modules to existing Tier 1 customers enables the Group to leverage
existing relationships and involves less cost, risk and shorter sales cycles.
Continued Investment in Sales and Marketing
The Group intends to expand its sales infrastructure to broaden its
relationships with both new and existing channel partners and to target
additional sales. The Group also plans to expand its distribution capability by
significantly increasing its direct and channel and account management sales
forces and resources to develop further the Group's distribution and support
capabilities.
Acquisitions
If appropriate, the Group plans to evaluate and possibly execute complementary
partnerships and acquisitions in the future.
CURRENT TRADING AND PROSPECTS
The Group's revenue has grown from C$3.0 million in the financial year ended 30
September 2000 to C$37.0 million in the financial year ended 30 September 2006,
representing a compound annual growth rate of 52 per cent.
Since 30 September 2006, the Group has continued to trade in line with the
Directors' expectations. The Group has expanded its relationship with Digicel
Group, undertaking projects in two new countries, El Salvador and Guyana. In
addition, the Group has added CPM S.A. and Leadcom Integrated Solutions USA Inc.
as indirect sales channel partners.
The Directors believe that certain trends, including the evolution of the
broader communications services industry through, amongst other things, improved
mobile access content delivery technologies and mobile devices will increase the
requirements of mobile communications service providers to extend and enhance
their service offerings and thereby lead to an expansion in the market for the
Group's monetization and personalisation solutions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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