Acquisition and Vendor Placing

RNS Number : 9262N

EMIS Group PLC

13 September 2013

 



NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA

EMIS Group PLC

("EMIS Group")

Acquisition of Ascribe

Vendor Placing to raise approximately £27m

EMIS Group plc (AIM:EMIS), the UK's leading supplier of clinical software and related services to GP practices and other primary and community healthcare practitioners, is pleased to announce that it has conditionally agreed to acquire Ascribe Group Limited ("Ascribe"), a leading software and IT services provider to the UK's secondary healthcare market (the "Acquisition") from ECI Partners and certain other Vendors for an initial enterprise value of £57.5m (the "Enterprise Value").

As part of this transaction, EMIS Group also announces that Numis Securities Limited ("Numis") has placed 4,400,000 new ordinary shares of 1 pence each in the capital of EMIS Group (the "Placing Shares") at a price of 615 pence per new ordinary share (the "Placing Price"), raising £27.1m (approximately £26.3m net of fees and expenses) (the "Vendor Placing") to fund part of the consideration due under the Acquisition.

Further cash payments of up to £3.0m may become payable in September 2014 contingent upon Ascribe achieving certain key operational and financial milestones in the 12 month period post acquisition. Such amount (to the extent payable) will be satisfied in cash out of EMIS's available cash resources and available debt facilities at the time.

Highlights of the Acquisition

·      Ascribe is a well-established UK based healthcare software and IT services provider, previously listed on AIM from 2004 to 2009.

·      Ascribe is principally focused on Hospital Pharmacy, A&E, Mental Health and Patient Administration Systems (PAS)/Electronic Patient Records (EPR), with a high level of penetration into NHS secondary care organisations (75% of the 243 UK Trusts and Boards use at least one Ascribe solution).

·      Ascribe has a suite of well-invested solutions and a platform that facilitates significant cross-selling and growth through interoperability and/or integration with EMIS Group's GP, community care, high street pharmacy and diabetic retinopathy solutions.

·      The Acquisition is consistent with EMIS Group's stated strategy of providing integrated cross-organisational healthcare systems and represents a rare opportunity to acquire a significant market position in several areas strategically adjacent to but not overlapping with EMIS Group's core offerings.

Financing of the Acquisition

·      The Acquisition and related costs will principally be funded by a combination of the net proceeds of the Vendor Placing alongside existing cash resources and a newly available debt facility.

·      Under the terms of the Acquisition, EMIS Group will acquire Ascribe for the Enterprise Value. Further cash payments of up to £3.0m may become payable in September 2014 contingent upon Ascribe achieving certain key operational and financial milestones in the 12 month period post acquisition ("Contingent Consideration").

·      The Enterprise Value of £57.5m comprises:

o  equity consideration of approximately £12.5m ("Equity Consideration") to acquire the entire ordinary share capital of Ascribe;

o  £40.4m to acquire or discharge all outstanding shareholder loan notes, preference shares and other entitlements in Ascribe for cash; and

o  a working capital amount relating to external bank debt in Ascribe (net of cash balances and certain working capital and other adjustments) amounting to approximately £4.6m.

·      Certain members of the senior management of Ascribe will receive in aggregate £2.2m in ordinary shares of 1 pence each in the capital of EMIS Group ("Consideration Shares").

·      The remaining Enterprise Value of £55.3m will be satisfied by the issue of the Placing Shares by way of the Vendor Placing, EMIS Group's existing cash resources and from the utilisation of a new £32.0m debt facility with Yorkshire Bank.

·      The Acquisition is conditional only upon the Placing Shares being admitted to trading on AIM.

Vendor Placing

·     Gross proceeds of £27.1m (approximately £26.3m net of fees and expenses) through the Vendor Placing of the Placing Shares at the Placing Price.

·     The Placing Shares will represent approximately 7.5% of the current issued share capital.

·     The Vendor Placing has been fully underwritten by Numis.

·     It is expected that admission of the Placing Shares to AIM will become effective, and dealings in the Placing Shares will commence on AIM, on 16 September 2013.

Financial Effects of the Transaction

·      In the year ended 30 June 2012, Ascribe reported revenue of £24.0m, EBITDA of £6.2m and operating profit (pre-amortisation of acquired intangible assets) of £3.8m (£3.2m on an adjusted basis excluding capitalisation and amortisation of software development costs). In the year ended 30 June 2013, Ascribe revenue (unaudited) was maintained at £24.0m, with operating profit of £4.3m and, due to increased technology investment, an adjusted operating profit margin in line with the prior year.

·      The Acquisition is expected to be earnings enhancing in the first full year following completion.

·      Ascribe reported recurring revenues of 57% in its financial year ended 30 June 2012.

·      Synergies are expected to deliver £0.5m cost savings in EMIS Group's financial year ended 31 December 2014 with further potential future efficiencies and economies of scale.

Chris Spencer, Chief Executive Officer of EMIS Group, commented:

"The acquisition of Ascribe represents a significant milestone in our stated strategy of providing clinically led, integrated, cross-organisational healthcare systems, and represents a rare opportunity to acquire multiple significant positions in an adjacent but not overlapping market.  

"We believe that there are significant growth prospects for the combined business which will be uniquely placed to address market challenges, allowing us to directly target the Acute, Specialist Care, Pharmacy, Children and Community Care and the Mental Health markets, thereby facilitating the UK's strategy of integrated healthcare."

Stephen Critchlow, Chief Executive Officer of Ascribe, commented:

"We're delighted to be joining forces with EMIS Group, which we believe is the natural partner to take the Ascribe business to the next stage of its development. Our shared vision is for patients to benefit from all the information collected about their health and care across primary, secondary, social and community settings.  Combining our integrated cross-organisational products and services will enable us to offer a unique proposition that benefits customers both in the UK and overseas."

An analyst meeting will be held at 9.00am this morning at the offices of Numis Securities. For further details (including access to conference call facility) please contact Giles Robinson at [e-mail] or 020 3128 8788

For further information, please contact:

EMIS Group plc	[phone]
Chris Spencer, Chief Executive Officer
Peter Southby, Chief Financial Officer
Numis Securities Limited (NOMAD and broker)	[phone]
Nominated Adviser: Michael Meade/Simon Willis
Corporate Broking: James Black
MHP Communications	[phone]
Reg Hoare/James White/Giles Robinson

IMPORTANT INFORMATION

The Appendix to this Announcement (which forms part of this Announcement) sets out the terms and conditions of the Vendor Placing. Persons who have chosen to participate in the Vendor Placing, by making an oral or written offer to acquire Placing Shares, will be deemed to have read and understood this Announcement in its entirety (including the Appendix) and to be making such offer on the terms and subject to the conditions in the Appendix, and to be providing the representations, warranties and acknowledgements contained in the Appendix.

The distribution of this Announcement and the Vendor Placing of the Placing Shares as set out in this Announcement in certain jurisdictions may be restricted by law. This Announcement is for information purposes only and no action has been taken that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction in which such action is prohibited ("Excluded Territories") where action for that purpose is required.  Persons into whose possession this Announcement comes are required to inform themselves about, and to observe, such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

Subject to certain exceptions, the securities referred to herein may not be offered or sold in the Excluded Territories or to, or for the account or benefit of, any national, resident or citizen of any Excluded Territory. The securities referred to herein have not been and will not be registered under the US Securities Act of 1933, as amended (the "Securities Act") or under the applicable securities laws of any Excluded Territory. There will be no public offer, nor an offering of securities for sale, in any of the Excluded Territories.

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 Securities Act, 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.

Numis Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting for EMIS Group in connection with the Vendor Placing and no-one else and will not be responsible to anyone other than EMIS Group for providing the protections afforded to clients of Numis Securities Limited nor for providing advice in relation to the Vendor Placing. 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 EMIS Group or Numis Securities Limited or by any of their respective affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed.

Certain statements in this Announcement are forward-looking statements which are based on EMIS Group's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as "aim", "anticipates", "believe", "intend", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks and uncertainties that could cause the actual results of operations, financial condition, liquidity, dividend policy and the development of the industry in which EMIS Group's business operates to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements.  Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements.  Forward-looking statements speak only as of the date of such statements and, except as required by the Financial Conduct Authority, London Stock Exchange plc or applicable law, EMIS Group undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Any indication in this Announcement of the price at which ordinary shares of 1 pence each in the capital of EMIS Group ("Ordinary Shares") have been bought or sold in the past cannot be relied upon as a guide to future performance and persons needing advice should consult an independent financial adviser.  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 EMIS Group for the current or future financial years would necessarily match or exceed the historical published earnings per share of EMIS Group.  The price of Ordinary 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 Ordinary Shares.

The Placing Shares will not be admitted to trading on any stock exchange other than London Stock Exchange plc.

Neither the content of EMIS Group's website (or any other website) nor the content of any website accessible from hyperlinks on EMIS Group's website (or any other website) is incorporated into, or forms part of, this Announcement.

Introduction

EMIS Group has agreed to acquire Ascribe, a leading software and IT services provider to the UK secondary healthcare market, for an Enterprise Value of £57.5m and additional Contingent Consideration of up to £3.0m.  The Acquisition will be fundedfrom a combination of existing cash resources, a new debt facility, the issue of EMIS Group shares to certain Ascribe management shareholders and the net proceeds of the Vendor Placing.

Overview of EMIS Group

EMIS Group is the UK's leading supplier of clinical software and related services to GP practices and other healthcare practitioners and a major software supplier to high street pharmacies. As at 30 June 2013, EMIS Group had a GP market share of 52.4% (5,170 GP Practices) and a high street pharmacy market share of 34.9% (4,727 pharmacies).

EMIS Group's core activities include software development, software licensing and support, hardware support and maintenance services, hardware sales, third party software sales and training services. EMIS Group's software includes all of the functionality specified in NHS accreditation standards for GPs, including holding the patient's cradle to grave electronic healthcare record, practice appointment booking systems and consultation and intelligent prescribing modules as well as a full range of high street pharmacy software products and related services.

In its last financial year ended 31 December 2012, EMIS Group generated an adjusted operating profit¹ of £22.8m on revenue of £86.3m, and in its recently reported half year results reported adjusted operating profit of £11.6m on revenue of £47.1m.

As announced on 5 August 2013, EMIS Group recently completed the acquisition of Digital Healthcare for a net consideration of £3.1m, giving EMIS Group a strong position in the profitable niche market of diabetic retinopathy screening and other ophthalmology-related solutions.

1 Excludes capitalisation and amortisation of development costs and amortisation of acquired intangibles charged in the period

Information on Ascribe

Ascribe is a UK headquartered, clinically focused provider of software solutions and ongoing software support and consultancy services to healthcare customers in the UK (82% of revenue FY12), Australia (16%) and New Zealand (2%). It was established in 1984 and was listed on AIM from 2004 to 2009, when it was taken private by its senior management with backing from ECI Partners.

Ascribe's customers are NHS trusts and boards (software services and consultancy) and NHS contractors (consultancy), primarily in the secondary care market, with software largely deployed in hospitals and community care settings. It has a high level of penetration into NHS secondary care organisations (75% of the 243 UK Trusts and Boards use at least one Ascribe solution), and is principally focused on Hospital Pharmacy (#2 in UK market), Unscheduled Care/A&E (#2), Mental Health (#3) and Patient Administration Systems (PAS)/Electronic Patient Records (EPR) (growing presence).

Ascribe has developed, both organically and through acquisition, a suite of software solutions that can be used independently or in an integrated way by using its interoperable Health Application Platform (HAP). These software applications are designed to benefit customers through providing increased clinical intelligence to clinicians to inform decisions and improve health outcomes, whilst also driving organisational efficiencies to provide cost benefits to care organisations in the UK and overseas.

The summary information set out below has been extracted from Ascribe's audited financial statements for the financial year ended 30 June 2012 and from its management accounts for the financial year ended 30 June 2013 (unaudited):

	2012 £m	2013 £m
Revenue	24.0	24.0
Reported EBITDA	6.2	6.9
Operating profit (pre-amortisation of acquired intangible assets)	3.8	4.3
Adjustment for net capitalisation of development costs	(0.8)	(1.1)
Add back one-off items	0.2	-
Adjusted operating profit	3.2	3.2

In FY12, recurring revenue represented 57% of total revenue.

Background to and reasons for the Acquisition

EMIS Group's stated strategy is to provide integrated cross-organisational healthcare systems, extending from primary and community into specialist care and beyond. The Acquisition represents a rare opportunity to acquire multiple significant product positions in adjacent and strategically important but not overlapping segments of the UK healthcare IT market.

Ascribe's customers are primarily within hospitals across the UK, Australia and New Zealand, a position that is highly complementary to EMIS Group's market leading position in UK primary care, community pharmacy and to EMIS Group's Joint eHealth Data and Information sub-contract in Australia.

EMIS Group believes that there are significant growth prospects for the combined business, driven by:

·      Failure of the NHS National Programme for IT ("NPfIT"), which had resulted in individual trusts making a significant reduction in expenditure while awaiting the roll-out of a centrally delivered IT solution. Since the failure of NPfIT, trusts are beginning to retake strategic responsibility for IT investment decisions.

·      The "Nicholson Challenge", whereby the NHS has been tasked with making £20bn of efficiency savings by 2014/15. Trusts are permitted to invest in IT systems to drive such savings.

·      NHS funding initiatives, e.g. the recently announced £1 billion NHS interoperability technology fund, including ePrescribing.

·      More broadly, an aging population and treatment of long-term conditions.

The combined business will be uniquely placed to address these challenges and will allow EMIS Group to directly target the Acute, Specialist Care, Hospital Pharmacy, Community and Child Care and Mental Health markets, facilitating the UK's strategy of integrated healthcare.

Principal terms of the Acquisition

·      Under the terms of the Acquisition, EMIS Group will acquire Ascribe for an Enterprise Value of £57.5m. Further cash payments of up to £3.0m may become payable in September 2014 contingent upon Ascribe achieving certain key operational and financial milestones in the 12 month period post acquisition.

·      The Enterprise Value of £57.5m comprises: equity consideration of approximately £12.5m to acquire the entire ordinary share capital of Ascribe; £40.4m to acquire or discharge all outstanding shareholder loan notes, preference shares and other entitlements in Ascribe for cash; and a working capital amount relating to external bank debt in Ascribe (net of cash balances and certain working capital and other adjustments) amounting to approximately £4.6m.

·      Certain members of the senior management of Ascribe will receive in aggregate £2.2m in shares in EMIS Group.

·      The £26.3m net proceeds of the Vendor Placing will be used to pay part of the consideration due under the Acquisition and the balance will be satisfied from EMIS Group's existing cash resources and from the utilisation of a new £32.0m debt facility.

·      The Contingent Consideration of up to £3.0m will (to the extent it becomes payable) be satisfied in cash out of EMIS Group's available cash resources and available debt facilities at the time.

·      The Vendors will also retain the benefit of a certain tax claim up to a maximum of £1.0m, to the extent that EMIS Group is able to realise such claim for cash within an agreed timeframe.

The Consideration Shares will rank pari passu in all respects with the existing Ordinary Shares and will have the right to receive all dividends and other distributions declared, made or paid after the relevant allotment date in respect of the issued Ordinary Shares save that they will not rank for any dividend or other distribution declared, made or paid by reference to a record date before the relevant allotment date.

The Acquisition is only conditional upon the Placing Shares being admitted to trading on AIM.

Reasons for the Vendor Placing and use of proceeds

EMIS Group has undertaken the Vendor Placing and has raised £27.1m (before fees and expenses). The net proceeds of the Vendor Placing will be used to partially fund the Acquisition.

EMIS Group believes that a non-pre-emptive vendor placing is the most suitable option available to EMIS Group to raise funds for the Acquisition. The Acquisition was run by the Vendors as a competitive process and the cost and time required to make a pre-emptive share offer was not considered to be the best option available to EMIS Group.

Financial impact of the Vendor Placing and the Acquisition

The financial impact of the Vendor Placing and the Acquisition will be to increase EMIS Group's net assets by approximately £28.5m, net of costs. Upon completion of the Vendor Placing and Acquisition, EMIS Group will have pro forma (based on cash position at 30 June 2013 adjusted for the Digital Health Care purchase) net debt of approximately £18.7m (excluding contingent consideration liabilities).

It is expected that the Acquisition and the Vendor Placing will in aggregate be earnings enhancing in the financial year ending 31 December 2014 and thereafter.²

2 This statement relates to future actions and circumstances which by their nature involve risks and other uncertain factors.  This statement is not a profit forecast and should not be interpreted to mean that earnings per share for any future period would necessarily match or be greater than those in a preceding period.  Earnings in this context refers to earnings per share on an IFRS basis excluding the amortisation of intangible assets and exceptional items.

Details of the Vendor Placing

Under the terms of the Placing Agreement, Numis has agreed to place, as agent for EMIS Group, 4,400,000 Placing Shares at the Placing Price with institutional shareholders.  The Placing Shares will represent approximately 7.5% of the current issued share capital.  The Vendor Placing as a whole will raise proceeds of £27.1m, before fees and expenses and approximately £26.3m net of fees and expenses.  The Vendor Placing has been fully underwritten by Numis in accordance with the terms of the Placing Agreement. The net proceeds of the Vendor Placing will be paid directly to the Vendors pursuant to the terms of the Cash Realisation Agreement between Numis and the Vendors.

Peter Southby, Chief Financial Officer of EMIS Group, and Andy McKeon, Non-executive Director of EMIS Group have agreed to subscribe for 4,878 Placing Shares and 1,626 Placing Shares respectively.

The Placing Agreement contains provisions (including customary market related provisions) entitling Numis to terminate the Placing Agreement at any time prior to Admission of the Placing Shares to AIM in certain circumstances.

The Placing Price represents a discount of approximately 7.2% to the middle market price of 663 pence per Ordinary Share at the close of business on 12 September 2013, being the latest practicable date prior to the date of this Announcement.

The Placing Shares will, on Admission, rank pari passu in all respects with the existing Ordinary Shares and will have the right to receive all dividends and other distributions thereafter declared, made or paid in respect of the issued Ordinary Shares. The Placing Shares will qualify for the interim dividend of 8.0p per share as detailed in EMIS Group's half year results announcement of 6 September 2013.

Admission and settlement

Application has been made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM.  Settlement of the Placing Shares and Admission is expected to take place at 8.00 a.m. on 16 September 2013.

APPENDIX

TERMS AND CONDITIONS OF THE VENDOR PLACING

IMPORTANT INFORMATION FOR PLACEES ONLY REGARDING THE VENDOR PLACING

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX (TOGETHER, THE "ANNOUNCEMENT") AND THE INFORMATION IN IT, IS RESTRICTED, AND, SUBJECT TO CERTAIN EXCEPTIONS, IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

IMPORTANT INFORMATION ON THE VENDOR PLACING FOR INVITED PLACEES ONLY.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE VENDOR PLACING. THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT 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, ("QUALIFIED INVESTORS") BEING PERSONS FALLING WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE EUROPEAN PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE"); (B) IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO ARE PERSONS WHO (I) FALL 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 TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").  THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH 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 THIS APPENDIX, IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN EMIS GROUP.  THIS ANNOUNCEMENT HAS BEEN ISSUED BY AND IS THE SOLE RESPONSIBILITY OF EMIS GROUP.

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, IS NOT AN OFFER FOR SALE OR SUBSCRIPTION IN ANY JURISDICTION IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL UNDER THE SECURITIES LAWS OF ANY SUCH JURISDICTION.  SUBJECT TO CERTAIN LIMITED EXCEPTIONS, THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX, IS NOT AN OFFER OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT, AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES. THE PRICE OF SHARES IN EMIS GROUP AND THE INCOME FROM THEM (IF ANY) MAY GO DOWN AS WELL AS UP AND THE INVESTORS MAY NOT GET BACK THE FULL AMOUNT INVESTED ON DISPOSAL OF SHARES.

Persons that are invited to and that choose to participate in the Vendor Placing, by making (or on whose behalf there is made) an oral or written offer to subscribe for Placing Shares (the "Placees"), will be deemed to have read and understood this Announcement, including this Appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in this Appendix. In particular, each such Placee represents, warrants and acknowledges that:

1.         it is a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

2.         in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive:

(i)         the Placing Shares acquired by it in the Vendor Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors or in circumstances in which the prior consent of Numis has been given to the offer or resale; or

(ii)         where Placing Shares have been acquired by it on behalf of persons in any member state of the European Economic Area other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons; and

3.         it is either:

a.   not in the United States and is otherwise acquiring the Placing Shares in an "offshore transaction" meeting the requirements of Regulation S under the Securities Act; or

b.   otherwise acquiring the Placing Shares in a transaction that is exempt from or not subject to the registrations requirements of the Securities Act.

EMIS Group and Numis will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

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 Australia, Canada, Japan or the Republic of South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the European Economic Area.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or the Announcement of which it forms part should seek appropriate advice before taking any action.

In this Appendix, unless the context otherwise requires, "Placee" means a Relevant Person (including individuals, funds or others) on whose behalf a commitment to subscribe for Placing Shares has been given.

Details of the Vendor Placing

Numis has entered into a Placing Agreement with EMIS Group under which Numis has, on the terms and subject to the conditions set out therein, undertaken to use its reasonable endeavours to procure, as agent for EMIS Group, subscribers for the Placing Shares.  To the extent it does not procure subscribers for the total number of the Placing Shares at the Placing Price, Numis has agreed pursuant to the Placing Agreement itself to subscribe as principal for those Placing Shares at the Placing Price. 

The issue of the Placing Shares is to be effected by way of a vendor placing in connection with the Acquisition. EMIS Group will allot and issue the Placing Shares on a non-pre-emptive basis to the Placees in consideration for Numis paying the net proceeds of the subscription of the Placing Shares to the Vendors in part satisfaction of EMIS Group's payment obligations under the Acquisition Agreement.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing issued Ordinary Shares, including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of the Ordinary Shares after the date of issue of the Placing Shares.

Application for admission to trading

Application will be made to the London Stock Exchange for Admission. It is expected that settlement of the Placing Shares and Admission will become effective on or around 16 September 2013 and that dealings in the Placing Shares will commence at that time.

Participation in, and principal terms of, the Vendor Placing

1.         Numis (whether through itself or any of its affiliates) is arranging the Vendor Placing as Nomad, Bookrunner and Broker of EMIS Group for the purpose of using reasonable endeavours to procure Placees at the Placing Price for the Placing Shares.

2.         Participation in the Vendor Placing will only be available to persons who may lawfully be, and are, invited to participate by Numis. Numis and its affiliates may participate in the Vendor Placing as principal.

3.         This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Vendor Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

4.         The placing price will be a fixed price of 615 pence per Placing Share.

5.         Each Placee's allocation will be confirmed to Placees orally by Numis, and a trade confirmation or contract note will be despatched as soon as possible thereafter. The oral confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of Numis and EMIS Group, under which it agrees to acquire the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with EMIS Group's Articles of Association.

6.         Except as required by law or regulation, no press release or other announcement will be made by Numis or EMIS Group using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

7.         Irrespective of the time at which a Placee's allocation pursuant to the Vendor Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Vendor Placing will be required to be made at the same time, on the basis explained below under "Registration and Settlement".

8.         All obligations under the Vendor Placing will be subject to fulfilment or (where applicable) waiver of, amongst other things, the conditions referred to below under "Conditions of the Vendor Placing" and to the Vendor Placing not being terminated on the basis referred to below under "Right to terminate under the Placing Agreement".

9.         By participating in the Vendor Placing, each Placee will agree that its rights and obligations in respect of the Vendor Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

10.        To the fullest extent permissible by law, none of EMIS Group, Numis or any of their respective affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, none of EMIS Group, Numis or any of their respective affiliates shall have any liability (including to the fullest extent permissible by law, any fiduciary duties) in respect of Numis' conduct of the Vendor Placing. Each Placee acknowledges and agrees that EMIS Group is responsible for the allotment of the Placing Shares to the Placees and Numis shall have no liability to the Placees for the failure of EMIS Group to fulfil those obligations. 

Conditions of the Vendor Placing

Numis' obligations under the Placing Agreement in respect of the Placing Shares are conditional on, inter alia:

(a)        the Acquisition Agreement, any relevant Acquisition Documents (as defined in the Acquisition Agreement) (save for those being signed but not delivered until completion of the Acquisition) and the Cash Realisation Agreement having been duly executed by the parties thereto;

(b)        the application for Admission being submitted to the London Stock Exchange by not later than 5.00 p.m. on the date of the Placing Agreement;

(c)        the London Stock Exchange agreeing to admit the Placing Shares to trading on AIM (subject only to allotment);

(d)        the performance by EMIS Group of its obligations under the Placing Agreement which are material in the context of the Vendor Placing so far as the same fall to be performed prior to Admission;

(e)        the Acquisition Agreement becoming unconditional in all respects (other than as regards any condition relating to Admission);

(f)         the delivery to Numis of a certificate in the form set out in Schedule 3 to the Placing Agreement signed by a director on behalf of EMIS Group not later than 5.00 p.m. on the dealing day immediately prior to the expected date of Admission; and

(g)        Admission occurring not later than 8.00 a.m. on 16 September 2013.

If (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by Numis by the respective time or date where specified (or such later time or date as EMIS Group and Numis may agree but not being later than 8.00 a.m. on 20 September 2013 (the "Final Date")); or (ii) the Placing Agreement is terminated as described below, the Vendor Placing in relation to the Placing Shares will lapse 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.

Numis may, at its discretion and upon such terms as it thinks fit, waive, or extend the period (up to the Final Date) for, compliance by EMIS Group with the whole or any part of any of EMIS Group's obligations in relation to the conditions in the Placing Agreement, save that the above condition relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

Neither Numis nor EMIS Group shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or date for the satisfaction of any condition to the Vendor Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Vendor Placing generally and by participating in the Vendor Placing each Placee agrees that any such decision is within the absolute discretion of Numis.

Right to terminate under the Placing Agreement

Numis is entitled, at any time before Admission, to terminate the Placing Agreement in relation to Numis' obligations in respect of the Placing Shares by giving notice to EMIS Group in certain circumstances, including a material breach of the warranties given to Numis in the Placing Agreement, the failure of EMIS Group to comply with its obligations in any material respect under the Placing Agreement, a material adverse change (or prospective change) in EMIS Group's financial position or prospects or business, the occurrence of a force majeure event which, in the opinion of Numis acting in good faith, seriously and adversely affects or will or is reasonably likely to seriously and adversely affect the business of EMIS Group or a breach of the warranties given by the Vendors under the Acquisition Agreement.

By participating in the Vendor 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 it shall have no liability to Placees whatsoever in connection with any such exercise.

No Admission Document or Prospectus

The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require an admission document or prospectus in the United Kingdom or in any other jurisdiction. No offering document, admission document or prospectus has been or will be submitted to be approved by the FCA or submitted to the London Stock Exchange in relation to the Vendor Placing, and Placees' commitments will be made solely on the basis of the information contained in the Announcement (including this Appendix) and the Exchange Information (as defined further below).  Each Placee, by accepting a participation in the Vendor Placing, agrees that the content of this Announcement is exclusively the responsibility of EMIS Group and confirms that it has neither received nor relied on any other information (other than the Exchange Information), representation, warranty, or statement made by or on behalf of EMIS Group or Numis or any other person and neither Numis nor EMIS Group nor any other person will be liable for any Placee's decision to participate in the Vendor Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received and, if given or made, such information, representation, warranty or statement must not be relied upon as having been authorised by Numis, EMIS Group, or their respective officers, directors, employees or agents. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of EMIS Group in accepting a participation in the Vendor Placing. Neither EMIS Group, nor Numis are making any undertaking or warranty to any Placee regarding the legality of an investment in the Placing Shares by such Placee under any legal, investment or similar laws or regulations. Each Placee should not consider any information in this Announcement to be legal, tax or business advice. Each Placee should consult its own solicitor, tax adviser and financial adviser for independent legal, tax and financial advice regarding an investment in the Placing Shares. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and Settlement

Settlement of transactions in the Placing Shares (ISIN: GB00B61D1Y04) following Admission will take place within CREST provided that, subject to certain exceptions, Numis reserves the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

Each Placee allocated Placing Shares in the Vendor Placing will be sent a trade confirmation or contract note 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 the CREST or certificated settlement instructions that have been indicated to Numis.

It is expected that settlement will be on 16 September 2013 on a T+1 basis in accordance with the instructions set out in the trade confirmation.

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.

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 for EMIS Group), 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 on demand for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, 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.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation or contract note is copied and delivered immediately to the relevant person within that organisation.

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 or securities transfer tax. Placees will not be entitled to receive any fee or commission in connection with the Vendor Placing.

Representations, Warranties and Further Terms

By participating in the Vendor Placing each Placee (and any person acting on such Placee's behalf) makes the following representations, warranties, acknowledgements, agreements and undertakings (as the case may be) to EMIS Group and Numis:

1.         represents and warrants that it has read and understood the Announcement, including this Appendix, in its entirety and that its subscription of Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute or duplicate this Announcement;

2.         acknowledges that no offering document, admission document or prospectus has been prepared in connection with the Vendor Placing and represents and warrants that it has not received and will not receive a prospectus, admission document or other offering document in connection therewith;

3.         acknowledges that the Ordinary Shares are admitted to trading on AIM, and EMIS Group is therefore required to publish certain business and financial information in accordance with the AIM Rules for Companies (collectively "Exchange Information"), which includes EMIS Group's most recent balance sheet and profit and loss account and EMIS Group's announcements and circulars published in the past 12 months and that it is able to obtain or access such information without undue difficulty;

4.         acknowledges that the content of this Announcement is exclusively the responsibility of EMIS Group, and that none of Numis, its affiliates or any person acting on its or their 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 EMIS Group, and will not be liable for any Placee's decision to participate in the Vendor Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is contained in this Announcement and any Exchange Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by Numis, EMIS Group or any of their respective directors, officers or employees 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 EMIS Group and the Corporate Finance Department of Numis and not being attributable to the same)), and neither Numis nor EMIS Group will be liable for any Placee's decision to accept an invitation to participate in the Vendor Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it may not place the same degree of reliance as it may otherwise place on a prospectus or admission document. Each Placee further acknowledges and agrees that it has relied solely on its own investigation of the business, financial or other position of EMIS Group in deciding to participate in the Vendor Placing and it will not rely on any investigation that Numis, its affiliates or any other person acting on its or their behalf has or may have conducted;

5.         acknowledges that none of Numis, any of its affiliates or any person acting on behalf of it or them has or shall have any liability for the Exchange Information, any publicly available or filed information or any representation relating to EMIS Group, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

6.         represents and warrants that it has neither received nor relied on any confidential price sensitive information concerning EMIS Group in accepting this invitation to participate in the Vendor Placing;

7.         acknowledges that Numis does not have any duties or responsibilities to it, or its clients, similar or comparable to the duties of "best execution" and "suitability" imposed by the Conduct of Business Sourcebook in the FCA's Handbook of Rules and Guidance and that Numis is not acting for it or its clients and that Numis will not be responsible for providing protections to it or its clients;

8.         that, save in the event of fraud on the part of Numis (and to the extent permitted by the Rules of the FCA), neither Numis, its ultimate holding company nor any direct or indirect subsidiary undertakings of that holding company, nor any of their respective directors and employees shall be liable to Placees for any matter arising out of Numis' role as placing agent or otherwise in connection with the Vendor Placing and that where any such liability nevertheless arises as a matter of law Placees will immediately waive any claim against any of such persons which Placees may have in respect thereof;

9.         represents and warrants that it is either: (i) not in the United States and is otherwise acquiring the Placing Shares in an "offshore transaction" meeting the requirements of Regulation S under the Securities Act; or (ii) otherwise acquiring the Placing Shares in a transaction that is exempt from or not subject to the registrations requirements of the Securities Act;

10.       acknowledges that the Placing Shares are being offered and sold only pursuant to Regulation S under the Securities Act or otherwise in transactions exempt from or not subject to the registrations requirements of the Securities Act;

11.       unless otherwise specifically agreed in writing with Numis, represents and warrants that neither it nor the beneficial owner of such Placing Shares will be a resident of Australia, Canada, Japan or the Republic of South Africa;

12.       acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, Canada, Japan or the Republic of South Africa and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions;

13.       represents and warrants that the issue to it, or the person specified by it for registration as holder, of the Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer Placing Shares into a clearance system;

14.       represents and warrants that: (i) it has complied with its obligations under the Criminal Justice Act 1993 and Part VIII of FSMA; (ii) in connection with money laundering and terrorist financing, it has complied with its obligations under the Proceeds of Crime Act 2002 (as amended), the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering Regulations 2007; and (iii) it is not a person: (a) with whom transactions are prohibited under the Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury; (b) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or (c) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations (together, 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 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 and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to Numis such evidence, if any, as to the identity or location or legal status of any person which Numis may request from it in connection with the Vendor Placing (for the purpose of complying with such Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by Numis on the basis that any failure by it to do so may result in the number of Placing Shares that are to be purchased by it or at its direction pursuant to the Vendor Placing being reduced to such number, or to nil, as Numis may decide at its sole discretion;

15.       if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, represents and warrants that the Placing Shares purchased by it in the Vendor Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors, or in circumstances in which the prior consent of Numis has been given to the offer or resale;

16.       represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons 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 any member state of the European Economic Area within the meaning of the Prospectus Directive (including any relevant implementing measure in any member state);

17.       represents and warrants that 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 the FSMA) relating to the Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person;

18.       represents and warrants that it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

19.       if in a Member State of the European Economic Area, unless otherwise specifically agreed with Numis in writing, represents and warrants that it is a Qualified Investor within the meaning of the Prospectus Directive;

20.       if in the United Kingdom, represents and warrants that it is a person (i) who has professional experience in matters relating to investments falling within Article 19(1) of the Order; (ii) falling within Article 49(2)(A) to (D) (High Net Worth Companies, Unincorporated Associations, etc) of the Order; or (iii) to whom this Announcement may otherwise be lawfully communicated;

21.       represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities and taken any other necessary actions to enable it to commit to this participation in the Vendor Placing and to perform its obligations in relation thereto (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) and will honour such obligations;

22.       where it is acquiring Placing Shares for one or more managed accounts, represents and warrants that it is authorised in writing by each managed account: (a) to acquire the Placing Shares for each managed account; (b) to make on its behalf the representations, warranties, acknowledgements, undertakings and agreements in this Appendix and the Announcement of which it forms part; and (c) to receive on its behalf any investment letter relating to the Vendor Placing in the form provided to it by Numis;

23.       undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as Numis may in its sole discretion determine and without liability to such Placee and it will remain liable and will indemnify Numis on demand for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear the liability for any stamp duty or stamp duty reserve tax or security transfer tax (together with any interest or penalties due pursuant to or referred to in these terms and conditions) which may arise upon the placing or sale of such Placee's Placing Shares on its behalf;

24.       acknowledges that none of Numis, any of its affiliates, or 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 Vendor Placing and that participation in the Vendor Placing is on the basis that it is not and will not be treated for these purposes as a client of Numis and that Numis has no duties or responsibilities to it for providing the protections afforded to their respective clients or customers or for providing advice in relation to the Vendor Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of their rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

25.       undertakes that the person whom it specifies for registration as holder of the Placing Shares will be (i) itself; or (ii) its nominee, as the case may be. Neither Numis nor EMIS Group will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Vendor Placing and it agrees to indemnify EMIS Group and Numis 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;

26.       acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions and any non-contractual obligations arising out of or in connection with such agreement 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 (including non-contractual matters) 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 EMIS Group 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;

27.       acknowledges that time shall be of the essence as regards to obligations pursuant to this Appendix;

28.       agrees that EMIS Group, Numis and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to Numis on its own behalf and on behalf of EMIS Group and are irrevocable and are irrevocably authorised to produce this Announcement or a copy thereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby;

29.       agrees to indemnify on an after-tax basis and hold EMIS Group, 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, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Vendor Placing;

30.       acknowledges that no action has been or will be taken by any of EMIS Group, Numis or any person acting on behalf of EMIS Group or Numis that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

31.       acknowledges that it is an institution that has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares. It further acknowledges that it is experienced in investing in securities of this nature and in this sector and is aware that it may be required to bear, and that it, and any accounts for which it may be acting, are able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Vendor Placing. It has relied upon its own examination and due diligence of EMIS Group and its associates taken as a whole, and the terms of the Vendor Placing, including the merits and risks involved;

32.       acknowledges that its commitment to subscribe for Placing Shares on the terms set out herein and in the trade confirmation or contract note will continue notwithstanding any amendment that may in future be made to the terms of the Vendor Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to EMIS Group's conduct of the Vendor Placing;

33.       acknowledges that Numis or any of its affiliates acting as an investor for its own account may take up shares in EMIS Group and in that capacity may retain, purchase or sell for its own account such shares and may offer or sell such shares other than in connection with the Vendor Placing;

34.       represents and warrants that, if it is a pension fund or investment company, its purchase of Placing Shares is in full compliance with all applicable laws and regulation; and

35.       to the fullest extent permitted by law, it acknowledges and agrees to the disclaimers contained in the Announcement including this Appendix.

The representations, warranties, acknowledgments and undertakings contained in this Appendix are given to Numis and EMIS Group and are irrevocable and shall not be capable of termination in any circumstances.

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 EMIS Group 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, stamp duty or stamp duty reserve tax may be payable, for which neither EMIS Group 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 Vendor 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 EMIS Group and Numis in the event that any of EMIS Group 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.

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 UK by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.

Each Placee, and any person acting on behalf of the Placee, acknowledges 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.

Each Placee and any person acting on behalf of the 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.

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 the FSMA. The Placee acknowledges 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.

All times and dates in this Announcement may be subject to amendment. Numis shall notify the Placees and any person acting on behalf of the Placees of any changes.

Past performance is no guide to future performance and persons needing advice should consult an independent financial adviser.

For the avoidance of doubt, these materials may not be published, distributed or transmitted by any means or media, directly or indirectly, in whole or in part, in or into the United States.  These materials do not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States.  Securities may not be offered or sold in the United States absent (i) registration under the Securities Act or (ii) an available exemption from registration under the Securities Act. The securities mentioned herein have not been, and will not be, registered under the Securities Act and will not be offered to the public in the United States.

DEFINITIONS

In this Announcement:

"Acquisition" means the proposed acquisition by EMIS Group of the whole of the issued share capital of Ascribe Group Limited in accordance with the terms of the Acquisition Agreement;

"Acquisition Agreement" means the conditional agreement in the approved terms relating to the Acquisition to be entered into on the date of this Agreement between (1) EMIS Group and (2) the Vendors;

"Admission" means the admission of the Placing Shares to trading on AIM becoming effective in accordance with the AIM Rules for Companies;

"AIM" means the market of that name operated by the London Stock Exchange;

"AIM Rules for Companies" means the provisions of the London Stock Exchange AIM Rules for Companies as amended from time to time governing, inter alia, admission to AIM and the continuing obligations of AIM companies;

"Announcement" means this announcement (including the appendix to this announcement);

"Ascribe" means Ascribe Group Limited;

"Cash Realisation Agreement" means the agreement to be entered into on the date of the Placing Agreement between (1) Numis and (2) the Vendors in the form set out in Schedule 4 to the Placing Agreement;

"Consideration Shares" means the 361,379 Ordinary Shares to be issued to certain members of the senior management of Ascribe in connection with the Acquisition;

"Contingent Consideration" means the further cash payments of up to £3.0m that may become payable in September 2014 contingent upon Ascribe achieving certain key operational and financial milestones in the 12 month period post acquisition;

"CREST" means the relevant system (as defined in the CREST Regulations) in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in the CREST Regulations);

"CREST Regulations" means the Uncertificated Securities Regulations 2001 (SI 2001/3755) as amended from time to time;

"EMIS Group" means EMIS Group plc;

"Enterprise Value" means the initial enterprise value of £57.5m in respect of the Acquisition;

"Equity Consideration" means the equity consideration of approximately £12.5m to acquire the entire ordinary share capital of Ascribe;

"Exchange Information" means certain business and financial information that the EMIS Group is required to publish in accordance with the AIM Rules for Companies;

"Excluded Territories" means as defined in the Announcement;

"FCA" means the Financial Conduct Authority of the United Kingdom acting in its capacity as the competent authority for the purposes of Part IV of FSMA;

"Final Date" means 20 September 2013;

"FSMA" means the Financial Services and Markets Act 2000 (as amended);

"London Stock Exchange" means the London Stock Exchange plc;

"NPfiT" means the National Programme for IT;

"Numis" means Numis Securities Limited, registered in England and Wales with number 02285918, whose registered office is at 10 Paternoster Square, London EC4M 7LT;

"Order" means the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005;

"Ordinary Shares" means the ordinary shares of 1 pence each in the capital of EMIS Group;

"Placee" means any person (including individuals, funds or otherwise) by whom or on whose behalf a commitment to acquire Placing Shares has been given;

"Placing Agreement" means the placing agreement dated 13 September 2013 between EMIS Group and Numis in respect of the Vendor Placing;

"Placing Price" means 615 pence per Placing Share;

"Placing Shares" means the 4,400,000 Ordinary Shares to be issued pursuant to the Vendor Placing;

"Prospectus Directive" means the Directive of the European Parliament and of the Council of the European Union 2003/71/EC and including any relevant implementing directive measure in any Member State of the European Economic Area;

"Qualified Investors" means persons in Member States of the European Economic Area who are Qualified Investors as defined in section 86(7) of the FSMA, being persons falling within the meaning of article 2(1)(E) of the Prospectus Directive;

"Regulations" means a regulation of the European Union and/or a regulation adopted by the United Nations;

"Relevant Persons" means as defined in the Announcement;

"Securities Act" means the US Securities Act of 1933, as amended;

"United Kingdom" or "UK" means the United Kingdom of Great Britain and Northern Ireland;

"United States" or "US" means the United States of America, its territories and possessions, any state of the United States and the District of Columbia;

"Vendor Placing" means the placing of the Placing Shares by Numis, on behalf of EMIS Group, with institutional investors; and

"Vendors" means the shareholders of Ascribe Group Limited as defined in the Acquisition Agreement. 

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 Securities Act, 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.

 

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