TIDMTPX
RNS Number : 8858B
Panoply Holdings PLC (The)
12 June 2019
This announcement contains inside information
12 June 2019
The Panoply Holdings PLC
("The Panoply", or the "Group")
Acquisition of FutureGov
Total voting rights
Transformational deal provides a compelling, alternative
proposition to the public sector
The Panoply Holdings PLC, the digitally native technology
services Group, announces the acquisition of the entire issued
share capital of FutureGov Limited ("FutureGov"), a leader in
digital service design for the public sector and health sector (the
"Acquisition").
FutureGov has been changing public sector organisations through
digital transformation for over a decade, using design, technology
and organisation development approaches to create public services
fit for the 21st century. As well as adding further service
capabilities FutureGov brings strong existing client relationships,
including Homes England, Essex County Council, Stockport Council,
London Borough of Hackney, North East Lincolnshire Council and NHS
Digital. As The Panoply's largest acquisition to date it also adds
significant scale to the Group, which will employ circa 305 staff
in total following completion of the Acquisition.
FutureGov was incorporated in 2008 and in the year to 31
December 2018 generated revenues of GBP6.4m, an EBITDA of GBP1.52m
and profit before tax of GBP1.45m. The acquisition of FutureGov is
expected to be immediately earnings enhancing for the Group.
The Acquisition transforms the shape of The Panoply, with circa
45% of Group revenue, on a proforma basis, originating from the
health and public sectors following completion. The combination of
FutureGov's wealth of experience and The Panoply's extended
capabilities creates a very strong disrupter in these sectors,
challenging the status-quo of larger organisations. The Group is
now able to offer public sector clients an end-to-end service from
discovery through to live digital transformation programmes, which
is entirely tailored to the needs of the industry.
FutureGov's Chief Executive Officer, Dominic Campbell, will take
on a Group-wide role of Managing Director, Public Sector and
Health. His focus will be on securing transformational projects
into the sector through the provision of a compelling alternative
to the incumbent digital service providers. There are no proposed
changes to The Panoply's board of directors as a result of the
Acquisition.
The initial consideration for the Acquisition will be GBP11.8m,
satisfied though the payment of circa GBP6m cash and the issue of
6,612,397 new ordinary shares in The Panoply. In addition, The
Panoply has also procured, on Completion, the repayment of loan
notes issued by FutureGov to certain shareholders with a principal
amount totalling GBP500,000 by FutureGov (the "Loan Notes"). 80% of
the cash consideration is being paid to external investors in
FutureGov or former employees. Demonstrating their belief in The
Panoply, the FutureGov management team will receive 90% of the
consideration due to them in shares in The Panoply and 10% in cash
on completion, with all of any earn out consideration to be
received in shares in The Panoply.
The Panoply has entered into a three year GBP5m revolving credit
facility with HSBC (the "RCF Facility") pursuant to which GBP3.55m
will be drawn-down to pay a proportion of the cash consideration
payable pursuant to the Acquisition. HSBC has taken security over
The Panoply and all of the Group's material subsidiaries and their
assets in connection with the RCF Facility. The RCF Facility
contains customary terms and covenants, including financial
covenants.
As at 31 May 2019, assuming all payments in connection with the
Acquisition had been made as at that date, the Group retained cash
reserves of approximately GBP4.75m.
Neal Gandhi, Chief Executive Officer of The Panoply said:
"FutureGov in every way reflects our own ethos, as a digitally
native company built for the demands of the 21(st) century. It has
built its reputation in the health and public sector with many
projects with local authorities and other government bodies
creating 21(st) century citizen services in areas as diverse as
housing, transport, children's and adults' social care and health.
We are excited by the opportunities that this opens up to all of
our Group companies. Having started our dialogue only a few months
ago, we are already bidding jointly for several deals totalling
more than GBP4m.
This is our largest acquisition to date, demonstrating the
continued success of our proposition to target companies and our
post-acquisition operating model. We are proud to be delivering on
our ambitions and building a Group that is both profitable and
purpose-led."
Dominic Campbell, Chief Executive Officer of FutureGov said:
"We're proud of our track record of growth, with over a decade
of experience working in the public sector, and more recently,
rapid growth in health. We're keen to keep this momentum going and,
in The Panoply, we've found a Group which clearly shares our
purpose of providing an alternative to the incumbent digital
transformation players. As part of the Group we will help to build
the future, by growing the depth and breadth of our capabilities
and scale, whilst retaining what makes us unique.
With this deal, we're pleased to repay the faith and investment
that our key investors Surrey County Council and Nesta have shown
us over the past five years, returning a significant return on
their investment for onward investment in public service delivery
and social impact."
Additional information on the acquisition
The Panoply has acquired FutureGov from Dominic Campbell,
Caroline Bishop, Peter Martin, Mary Cook, Zoe Stanton, Nesta,
Surrey County Council and a number of employee shareholders who
exercised share options immediately prior to Completion of the
Acquisition
The consideration payable under the share purchase agreement
relating to the Acquisition (the "SPA") comprises the following on
Completion:
-- the allotment and issue of 6,612,397 ordinary shares in the
Panoply, with a value of GBP5.8m, calculated by reference to a
price of 87.5 pence to the sellers other than Nesta and Surrey
County Council (the "Initial Panoply Shares");
-- a payment in cash of GBP6.06m; and
-- the procurement by The Panoply of the repayment by FutureGov
of an amount of GBP507,371 in respect of the outstanding Loan
Notes.
together (the "Initial Consideration").
The cash element of the Initial Consideration is being funded
through a combination of the RCF Facility, the Group's existing
cash reserves and cash acquired as part of FutureGov.
Subject to the future EBITDA performance of FutureGov (based on
EBITDA) during the 15 month period 1 January 2019 to 31 March 2020
(annualised) and 12 month period from 1 April 2020 to 31 March
2021, in addition to the Initial Consideration, the selling
shareholders of FutureGov will be entitled to receive deferred
earn-out consideration, of which 96% will be payable by the
allotment and issue of shares in The Panoply ("Panoply Shares") and
4% in cash following the agreement of the relevant EBITDA
calculations at the end of each of those financial periods. The
number of Panoply Shares to be allotted and issued shall be
calculated by dividing the earn-out price payable by a price per
share in The Panoply which is the greater of 83.125 pence and the
volume-weighted average mid-market price over the 30 business days
prior to the issue of the relevant Panoply Shares. Any Panoply
Shares allotted and issued by way of deferred consideration will be
allotted and issued as follows:
-- in four equal tranches over a 24 month period following the
determination of the accounts in respect of the financial year
ending 31 March 2019 and the publication of the Group's results for
the same period; and
-- in four equal tranches over a 24 month period following the
determination of the accounts in respect of the financial year
ending 31 March 2020 and the publication of the Group's results for
the same period.
The total consideration payable by The Panoply in respect of the
Acquisition is capped at a maximum of GBP21m.
All Panoply Shares allotted and issued under the SPA (including
the shares issued as part of the Initial Consideration) are subject
to customary lock-in arrangements and subject to claw-back by The
Panoply if FutureGov's EBITDA decreases over the 2 year earn-out
period.
Admission and total voting rights
An application has been made for the admission of the Initial
Panoply Shares to trading on AIM which is expected to take place on
or before 18 June 2019. Following this issue, the Company's issued
share capital will comprise 48,907,544 Ordinary Shares and this is
the total number of voting rights in the Company. There are no
shares held in treasury.
This figure may be used by shareholders as the denominator for
the calculation by which they may determine if they are required to
notify their interest in, or change to their interest in, the
Company under the FCA's Disclosure Guidance and Transparency
Rules.
Enquiries:
The Panoply Holdings
Neal Gandhi (CEO) Via Alma PR
Oliver Rigby (CFO)
Stifel Nicolaus Europe Limited +44 (0)207 710 7600
(Nomad and Broker)
Fred Walsh
Alex Price
Neil Shah
Luisa Orsini Baroni
Alma PR panoply@almapr.co.uk
(Financial PR) +44(0)203 405 0206
Josh Royston 07780 901979
Susie Hudson
Kieran Breheny
The person responsible for making this announcement is Oliver
Rigby, CFO.
About The Panoply
The Panoply is a digitally native technology services company,
built to service clients' digital transformation needs. Founded in
2016, with the aim of identifying and acquiring best-of-breed
specialist information technology, design and innovation consulting
businesses across Europe, the Group collaborates with its clients
to deliver the technology outcomes they're looking for at the pace
that they expect and demand.
More information is available at www.thepanoply.com
About FutureGov
FutureGov reforms health and public services by supporting
organisations through digital transformation and service design.
The Company believes in the power of 21st-century organisations to
deliver the highest quality, citizen-centred services that have a
lasting impact for all.
More information about FutureGov is available at
www.wearefuturegov.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACQBCGDLUGBBGCB
(END) Dow Jones Newswires
June 12, 2019 02:00 ET (06:00 GMT)
Tpximpact (LSE:TPX)
Historical Stock Chart
From Mar 2024 to Apr 2024
Tpximpact (LSE:TPX)
Historical Stock Chart
From Apr 2023 to Apr 2024