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eEnergy Group PLC (EAAS)

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Wednesday 15 September, 2021

eEnergy Group PLC

Acquisition and Placing

RNS Number : 8933L
eEnergy Group PLC
15 September 2021
 

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR IN ANY OTHER JURISDICTION IN WHICH OFFERS OF SALES WOULD BE PROHIBITED BY APPLICABLE LAW. THIS ANNOUNCEMENT IS NOT AN OFFER TO SELL OR A SOLICITATION TO BUY SECURITIES IN ANY JURISDICTION, INCLUDING THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA OR JAPAN. NEITHER THIS ANNOUNCEMENT NOR ANYTHING CONTAINED HEREIN SHALL FORM THE BASIS OF, OR BE RELIED UPON IN CONNECTION WITH, ANY OFFER OR COMMITMENT WHATSOEVER IN ANY JURISDICTION.

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION 2014/596/EU AS IT FORMS PART OF THE LAW OF ENGLAND AND WALES BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018. IN ADDITION, MARKET SOUNDINGS WERE TAKEN IN RESPECT OF THE MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN AND SUCH PERSONS SHALL THEREFORE CEASE TO BE IN POSSESSION OF INSIDE INFORMATION.

 

 

15 September 2021

 

eEnergy Group plc

("eEnergy" or "the Company")

 

Proposed Acquisition of UtilityTeam

 

Proposed Placing to raise approximately £12 million

 

eEnergy Group plc (AIM: EAAS), a leading "Energy Efficiency-as-a-Service" (EEaaS) business in the UK and Ireland, is pleased to announce that it has conditionally agreed to acquire the entire issued and to be issued share capital of UtilityTeam TopCo Limited and 5% of the issued share capital of UtilityTeam Trading Limited (not currently owned by UtilityTeam Topco Limited) (together, "UtilityTeam"), a UK top 20 energy management business providing comprehensive management, consultancy and procurement services to industrial and commercial clients with a particular focus on large, complex, multi-site portfolios (the "Acquisition").

 

Total consideration for the Acquisition is up to £21 million, on a cash-free and debt-free basis. The initial consideration of £15,855,000 comprises initial cash consideration of £9,527,500 ("Initial Cash Consideration") payable on completion and further cash consideration of £2,000,000 payable on or before 31 December 2021, as well as £4,327,500 which will be satisfied by the issue of 18,031,250 new Ordinary Shares (the "Consideration Shares") to be issued at a price of 24 pence per Ordinary Share.

 

An earn-out consideration of a maximum of £5,145,000 will be paid in cash up to £1,472,500 and any balance in Ordinary Shares (at the higher of 24 pence per Ordinary Share or the 30 day VWAP to 31 December 2021), based on a multiple of UtilityTeam's EBITDA for the year ending 31 December 2021, paying £7 for every £1 of EBITDA generated in excess of £2,265,000, up to a maximum EBITDA of £3,000,000.

 

The Initial Cash Consideration will be funded through a Placing of approximately £12 million (gross) to new and existing institutional, at the Placing Price, being 15 pence per Placing Share.

 

The Placing is being conducted by way of an accelerated bookbuild process ("the Bookbuild"), which will be launched immediately following the publication of this Announcement.

 

Transaction highlights:

· eEnergy has agreed to acquire UtilityTeam, a top 20 energy consulting and procurement business whose services aim to reduce costs for clients whilst supporting their transition to Net Zero. UtilityTeam's Net Zero strategy and capability is fully integrated into its traditional energy procurement business, with a focus on large, complex multi-site portfolios;

 

· Total Consideration for the Acquisition will be for up to £21 million, on a cash-free debt-free basis, subject to customary working capital adjustments, with initial consideration of £15,855,000 comprising £11,527,500 in cash and £4,327,500 in Consideration Shares at 24p per ordinary share, representing a premium of 37.1% to the closing mid-market price for an Ordinary Share on 14 September 2021, being the last practicable date prior to this Announcement;

 

· An earn-out consideration of a maximum of £5,145,000 will be paid in cash up to £1 million and any balance in Ordinary Shares (at the greater of 24 pence per Ordinary Share or the 30 day VWAP to 31 December 2021), based on a 7.0x multiple of UtilityTeam's EBITDA for the year ending 31 December 2021, paying £7 for every £1 of EBITDA generated in excess of £2,265,000, up to a maximum EBITDA of £3,000,000.

 

·   The initial consideration represents an acquisition multiple of 7.1x of the adjusted EBITDA[1] of UtilityTeam's adjusted EBITDA for the year ended 31 December 2020;

 

· The Acquisition is in-line with eEnergy's stated integrated energy services strategy to develop as a broader Energy Services company through its "buy and build" strategy, targeting adjacent businesses with energy management and efficiency capabilities, which offer strategic and synergistic growth opportunities;

 

· UtilityTeam has long-term, strategic relationships with its mid-market customer base, providing the Group with a strong cross-sell opportunity through which it can leverage the Group's existing Beond platform;

 

· UtilityTeam has strong recurring and contracted revenues from its industrial and commercial customers, with highly attractive quality of earnings expected to benefit the enlarged Group;

 

· The Acquisition is expected to be significantly earnings enhancing immediately (i.e. in the year ending 30 June 2022);

 

·     Chief Executive Officer of UtilityTeam, Delvin Lane, will join the Company's management team and will lead the Group's enlarged Energy Management as a Service (EMaaS) Division;

 

· An integration team will work closely with the EMaaS team, and oversee initiatives to accelerate growth, including cross selling and consolidating operational activities, ensuring a single technology platform for all EMaaS client data and creation of specific sales channels for Beond and UtilityTeam respectively;

 

· The Acquisition is to be part funded through a Placing of approximately £12 million at 15.0 pence per Placing Share, to be conducted by way of the Bookbuild. The Placing Price represents a discount of 14.3% to the closing mid-market price for of an Ordinary Share of 17.5 pence on 14 September 2021, being the last practicable date prior to this Announcement;

 

· The Placing is not conditional on shareholder approval. The Placing and Acquisition are inter-conditional and will complete simultaneously with completion anticipated to occur on 17 September 2021; and

 

·   The Bookbuild will be launched immediately following this Announcement. Singer Capital Markets Securities Limited ("Singer Capital Markets") and Turner Pope Investments (TPI) Limited ("Turner Pope") are acting as joint bookrunners (together the "Joint Bookrunners") in connection with the Placing.

 

Harvey Sinclair, CEO of eEnergy, commented:

"The acquisition of UtilityTeam, when combined with our existing businesses, gives eEnergy the ability to offer customers a broad range of services and expertise in energy management, energy efficiency and intelligent measurement & analysis. It is in line with our strategy to "buy and build" a portfolio of complementary operations that can take full advantage of market demand for zero carbon energy and energy data.

"For investors, we will be able to provide exposure to the links in the value chain of energy conservation, management and transition in areas that we expect to grow significantly in the years ahead.  This is an important milestone in our development and one which the Board believes will benefit all of our stakeholders - customers, staff and shareholders."

Contacts:

eEnergy Group plc

Tel: +44 20 7078 9564

Harvey Sinclair, Chief Executive Officer

Ric Williams, Chief Financial Officer

Crispin Goldsmith, Chief Strategy & Commercial Officer

 

[email protected]

www.eenergyplc.com

Singer  Capital Markets 

(Nominated Adviser, Joint Broker and Joint Bookrunner)

Tel: +44 20 7496 3000

Justin McKeegan, Mark Taylor, Asha Chotai (Corporate Finance)

Tom Salvesen (Corporate Broking)

 

 

Turner Pope Investments 

(Joint Broker and Joint Bookrunner)

Tel: +44 20 3657 0050

Andy Thacker, James Pope

 

[email protected]

Tavistock

Tel: +44 207 920 3150

Jos Simson, Simson Hudson, Katie Hopkins

 

[email protected]

 

IMPORTANT NOTICE

This Announcement has been issued by, and is the sole responsibility of, the Company. The distribution of this announcement or any information contained in it, and the offering or sale of securities in jurisdictions other than the United Kingdom may be restricted by law, and therefore persons coming into possession of this announcement and/or any related communications should inform themselves about and observe such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities law of any such jurisdiction.

 

No prospectus will be made available in connection with the matters contained in this announcement and no such prospectus is required (in accordance with the Prospectus Regulation (EU) 2017/1129) to be published. Persons needing advice should consult an independent financial adviser.

 

Singer Capital Markets Limited, which is a member of the London Stock Exchange, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority (the "FCA"), is acting as nominated adviser and joint bookrunner to the Company for the purposes of the AIM Rules for Companies and the AIM Rules for Nominated Advisers in connection with the Placing, and is not acting for, and will not be responsible to, any person other than the Company for providing the protections afforded to customers of Singer Capital Markets or for advising any other person on any transaction or arrangement referred to in this Announcement. Singer Capital Markets' responsibilities as the Company's nominated adviser under the AIM Rules are owed solely to the London Stock Exchange and are not owed to the Company, any director of the Company or to any other person. No representation or warranty, express or implied, is made by Singer Capital Markets as to, and no liability is accepted by Singer Capital Markets in respect of, any of the contents of this Announcement.

 

Turner Pope Investments (TPI) Limited, which is a member of the London Stock Exchange, which is authorised and regulated in the United Kingdom by the FCA, is acting as joint bookrunner to the Company in connection with the Placing. Tuner Pope is not acting for, and will not be responsible to, any person other than the Company for providing the protections afforded to the customers of Turner Pope or for advising any other person on the contents of this Announcement or on any transaction or arrangement referred to in this Announcement.

 

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 Singer Capital Markets nor Turner Pope nor any of their affiliates or agents (or any of their respective directors, officers, employees or advisers) for the contents of the information contained in this Announcement, or any other written or oral information made available to or publicly available to any interested party or its advisers, or any other statement made or purported to be made by or on behalf of Singer Capital Markets, Turner Pope nor any of their affiliates in connection with the Company, the Placing Shares or the Placing or the Acquisition and any responsibility and liability whether arising in tort, contract or otherwise therefore is expressly disclaimed.

 

This Announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Placing Shares. Any investment decision to buy Placing Shares in the Placing must be made solely on the basis of publicly available information, which has not been independently verified by Singer Capital Markets nor Turner Pope.

 

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the AIM market of the London Stock Exchange.

 

Neither the content of the Company's website (or any other website) nor any website accessible by hyperlinks on the Company's website (or any other website) is incorporated in, or forms part of, this announcement.

 

The Appendix to this Announcement set out the terms and conditions of the Placing.

 

This Announcement may not be published, distributed, forwarded or transmitted directly or indirectly, in whole or in part, in or into the United States, Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or of any other jurisdiction where to do so would be unlawful. These materials do not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States.

 

This Announcement and the information contained herein are not an offer of securities for sale in the United States.

 

The Placing Shares described in this Announcement have not been, and will not be, registered under the US Securities Act of 1933, as amended (the "Securities Act") or under the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold, resold, transferred or delivered, directly or indirectly, within, in or into the United States, unless registered under the Securities Act or pursuant to an available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and, in each case, in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The Placing Shares are being offered and sold solely outside of the United States in offshore transactions in accordance with Regulation S under the Securities Act ("Regulation S"). There will be no public offering of the Placing Shares in the United States. No representation is being made as to the availability of any exemption under the Securities Act for the reoffer, resale, pledge or transfer of the Placing Shares.

 

The Placing Shares have not been approved or disapproved by the United States Securities and Exchange Commission, any state securities commission or any other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Fundraising or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.

 

Furthermore, the Placing Shares have not been and will not be registered under the applicable laws of any of Australia, Canada, Japan, the Republic of Ireland, the Republic of South Africa or of any other jurisdiction where to do so would be unlawful and, consequently, may not be offered or sold to any national, resident or citizen thereof. The distribution of this Announcement and the placing of the Placing Shares as set out in this Announcement in certain jurisdictions may be restricted by law. 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 jurisdictions 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 the applicable restrictions may constitute a violation of the securities laws of any such jurisdiction.

 

This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events and the Company's future financial condition and performance. These statements, which sometimes use words such as "aim", "anticipate'', "believe", "may", "will", "should", "intend", "plan", "assume'', "estimate", "expect' (or the negative thereof) and words of similar meaning, reflect the current beliefs and expectations of the directors of the Company and involve known and unknown risks, uncertainties and assumptions, many of which are outside the Company's control and difficult to predict, that could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. The important factors that could cause the Company's actual results, performance or achievements to differ materially from those in the forward-looking statements include, among others, global events (such as pandemics), economic and business cycles, the terms and conditions of the Company's financing arrangements, foreign currency rate fluctuations, competition in the Company's principal markets, acquisitions or disposals of businesses or assets and trends in the Company's principal industries. Due to such uncertainties and risks, readers are cautioned not to place reliance on such forward-looking statements, which speak only as of the date hereof. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements in this Announcement may not occur.

 

The information contained in this Announcement speaks only as of the date of this Announcement and is subject to change without notice and the Company does not assume any responsibility or obligation to, and does not intend to, update or revise publicly or review any of the information contained to this Announcement, whether as a result of new information, future events or otherwise, except to the extent required by the FCA, the AIM Rules, UK MAR, the rules of the London Stock Exchange or by applicable law.

 

FURTHER INFORMATION

Proposed Acquisition of UtilityTeam

Proposed Placing to raise approximately £12 million

 

eEnergy - organic growth complemented by "buy-and-build" strategy

 

eEnergy is an integrated energy services company, enabling organisations to transition to 'Net Zero' by providing organisations with energy management and capital free energy efficiency solutions to reduce their carbon footprint and unlock hidden cost savings.

 

The Group has three divisions:

Energy management

through the Beond brand and offering Zero Carbon Energy Procurement & Consulting through a technology enabled Zero Carbon Marketplace

Energy efficiency

through the eLight brand and offering Energy Reduction through capital-free energy efficiency solutions, primarily LED lighting through our Light as a Service contract

Intelligent smart metering and analytics

Energy Consumption Measurement & Analytics through our new proprietary MyZeERO firmware and software platform

 

 

Energy Management as a Service

 

Beond was acquired on 15 December 2020. The Group's Zero Carbon energy procurement services are essential and highly valued, as businesses face increasing pressure to source green energy which can be complex and time consuming. The Board believes that EMaaS provides a customer acquisition platform for zero capital energy reduction solutions.

 

Within EMaaS, the Group has over 1,000 existing customers, over 30,000 meters under management and manages 3.4 TW of energy. The established nature of the Group's energy management as a service solution allows for ongoing customer engagement, leading the Group to be seen as a trusted advisor to its customers, and therefore is well positioned to provide consultancy services on the transition to Net Zero.

 

Energy Efficiency as a Service

 

The Group provides Energy Efficiency as a Service ("EEaaS"); which enables capital free energy conservation measures ("ECMs"). The Group is focused on providing its core Light-as-a-Service ("LaaS"), to educational and commercial & industrial customers through its operations in the UK and Ireland. The Group helps businesses and schools switch to LED lighting, typically for a fixed quarterly service fee, avoiding any upfront payments. The Group operates a 'pay as you save' business model, where customers are able to unlock surplus cash savings, therefore ensuring implementation of conservation measures (such as LED lighting), are capital free. These are provided to the educational and industrial & commercial sectors. The Group has seen a 70% increase in LaaS projects completed and 75% organic revenue growth in FY21 and has completed over 1,100 LaaS projects to date across the UK and Ireland.

 

Intelligent smart metering & analytics

 

MyZeERO, the Group's energy consumption measurement and analytics platform, provides a key strategic opportunity for the Group to offer data & analysis as a subscription based service, therefore providing an additional revenue opportunity. MyZeERO provides live, behind the meter energy consumption data to the cloud, enabling businesses to pinpoint energy wastage and ECMs.

 

The Board expects MyZeERO to increase customer conversion in EEaaS by providing assurances around expected energy savings, and enabling "share of savings" performance contracts, with customer relationships underpinned by data and analysis.

 

Strategy

 

Since IPO, the Company has demonstrated strong and repeated organic growth in its business segments, having transitioned from a pure-play LaaS business to an integrated energy services business. The Group's acquisitions are fully integrated and provide opportunities to build scale, supported by the launch of the MyZeERO platform by embedding customer relationships and enabling "share of savings" contracts.

 

The Group's strategy is to help its clients achieve Net Zero with an end to end Energy Management solution "as a service".  This is enabled through its top tier energy procurement platform and the granular energy consumption analytics provided by the MyZeERO platform.  The energy intelligence and analytics will provide the data to support consultancy services focused on helping the Group's clients to reduce energy wastage and energy reduction solutions are delivered through LaaS and will be delivered through other Energy Efficiency solutions, such as IOT enabled controls and Boiler optimisation.  The Group offers renewable energy solutions and intends to offer Electric Vehicle solutions that will promote energy independence and resilience.

 

The strategy is based upon cross selling the Group's capabilities and in particular engaging the Group's energy management clients, with whom the Group already enjoys a trusted advisor relationship, in the zero capital, Energy Efficiency as a Service solutions.  A significant number of key clients of Beond are engaged in potential LaaS and intelligent smart metering and analytics solutions.

 

An example of the successful implementation of the strategy is the combined LaaS and intelligent smart metering and analytics contract signed with a leading recycling business in April 2021.  The brief was to support the client's commitment to ESG by focusing on creating a strategy for reducing energy usage, carbon emissions and operating costs whilst improving facilities and addressing compliance concerns.  The eEnergy approach outlined to the client focused on four key strategic areas: (i) green energy procurement; (ii) energy usage and management; (iii) energy efficiency; and (iv) renewable energy generation.

 

In June and early July, the Group installed the LaaS solution to replace earlier generation LEDs in the client's nineteen sites and the MyZeERO energy management platform to centrally capture the energy consumption of the lighting and certain other assets.  Having completed the evaluation of the client's energy procurement strategy, Beond was awarded the energy management contract in July to move the client to zero carbon energy and management the client's energy procurement risks. eEnergy is currently modelling the baseline of energy consumption which will enable eEnergy and the client to identify further energy wastage and other energy efficiency opportunities which eEnergy will seek to implement, to achieve the client's objectives.  The LaaS solution alone is expected to generate net savings of more than £35,000 in the first year and over £650,000 over a ten year period.

 

The Board believes the potential 10-year economic value to eEnergy of offering all of the Group's current capabilities to a typical client could be approximately £1.1 million, with a further £0.6-1.0 million of value through the further EEaaS and EV growth opportunities.

 

Management consider there to be a number of near term growth drivers for the Group, which will continue to drive strong organic growth:

· Market Demand for Zero Carbon Energy & Energy Data;

· Switch to Energy Management 'as a service';

· Data insights enabled by My ZeERO - drive energy reduction through EEaaS;

· Digitisation of LaaS model - eLight App drives scalable SME growth;

· Leveraging large customer base - capturing additional ECM's with measured savings;

· Integration & efficiencies - Leverage platform capabilities; and

· Renewable generation & Electric Vehicle solutions - as a future growth opportunity.

 

Following the acquisition of Beond, strong operating execution has supported increased revenues per customer and robust new business performance, with the Energy Management division now providing enhanced revenue visibility and quality of earnings. The Group is now capturing more of the customer wallet and delivering profitable growth. The Group's strategy is to complement the continued organic growth by acquisition of adjacent businesses in the energy services sector. 

 

Background to and reason for the Acquisition and Placing

 

As detailed above, the Group has existing capabilities across energy management, energy efficiency and intelligent measurement & analysis, driving its organic growth.  To complement its organic growth strategy, eEnergy will continue its "buy and build" strategy, to in-fill capability gaps and accelerate growth.

 

The acquisition of Beond was the first major step towards this diversified energy management strategy. The acquisition of UtilityTeam reflects further broadening of the Group's capabilities, and provides an opportunity for cross-selling through access to UtilityTeam's extensive customer base, and operating efficiencies. 

 

Overview of UtilityTeam

 

UtilityTeam TopCo Ltd ("UtilityTeam") is a UK-based, top 20 energy consulting and procurement business, whose services aim to reduce costs and support clients' transition to Net Zero. Established in 2009, UtilityTeam is headquartered in Coventry, UK and has 37 employees. UtilityTeam is a founder member of the Future Net Zero Standard, and integrates Net Zero strategy and capability into the traditional energy procurement process.

 

UtilityTeam's services include provision of green energy strategy, hedging strategies, bill validation, bureau services, site works, audits and market intelligence. UtilityTeam is focused on renewable energy, with every tender including a renewable option. Further, 39% of contracts arranged in 2021 to date are with renewable energy providers.

 

The Group's management consider UtilityTeam's client offering to be differentiated from competitors as it has a particular focus on large, complex, multi-site portfolios and a dedicated energy service function established to identify, design, finance and implement the transition to Net Zero. In addition, UtilityTeam is one of the largest independents that focuses on the industrial & commercial market.

 

UtilityTeam's earnings profile benefits from a strong recurring and contracted revenue base and a total forward order book of £10.3 million as at 31 July 2021. The company has over 800 contracted customers and a contract renewal rate of 80%. Currently, UtilityTeam's average contract length is 2.8 years, and current customer contracts are expected to deliver over 68% of forecast revenues for FY22. In addition to recurring revenue, UtilityTeam has a highly accomplished digital sales and marketing capability delivering strong new business wins, with 2021 on track to outperform 2020's new business volumes.

 

UtilityTeam is profitable and its revenues have grown consistently in recent years, with total contract value of annual new business of approximately £6.6 million and £4.5 million, for the year ended 31 December 2020 and six months ended 30 June 2021, respectively. Similarly, between 2014 and 2020, UtilityTeam generated a compound annual growth rate (CAGR) of approximately 26%.

 

UtilityTeam Trading Ltd (the operating subsidiary of UtilityTeam) generated earnings for the last two completed financial years as follows:

 

Year end 31 December

£'000

2020

2019

 

% change

Revenue

5,171

4,178

23.8%

Gross Profit

4,590

3,298

37.7%

Margin (%)

88.8%

78.9%

 

Reported EBITDA

2,449

973

151.7%

Margin (%)

47.4%

23.3%

 

 

 

 

 

Revenue adjustments

(344)

(281)

 

Cost adjustments

36

853

 

Provision adjustments

99

(43)

 

 

 

 

 

Adjusted EBITDA

2,240

1,502

49.1%

Margin (%)

43.3%

36.0%

 

 

The following adjustments have been made by the Company to the reported EBITDA of UtilityTeam Trading Ltd to derive the adjusted EBITDA:

 

 

FY20

£'000

FY20

£'000

FY19

£'000

FY19

£'000

Reported EBITDA

 

2,449

 

973

 

 

 

 

 

Revenue adjustments

 

(344)

 

(281)

Change in accounting estimates

(299)

 

(150)

 

Cancelled contract

(45)

 

(108)

 

Other revenue adjustments

 

 

(23)

 

 

 

 

 

 

Cost adjustments

 

36

 

853

CEO/CFO cost normalisation

39

 

(190)

 

Terminated commissions

 

 

441

 

Exceptional professional fees

 

 

568

 

Other

(3)

 

34

 

 

 

 

 

 

Provision adjustments

 

99

 

(43)

Build up of consumption provisions

(24)

 

 

 

Completed contracts - prior period

123

 

(43)

 

 

 

 

 

 

Adjusted EBITDA

 

2,240

 

1,502

 

UtilityTeam had gross assets of £8.7 million as at 31 December 2020.

 

UtilityTeam's consolidated revenues for the years ended 31 December 2019 and 31 December 2020 are the same as above. Adjusted EBITDA for UtilityTeam was £1,504,000 for 2019 and £2,237,000 for 2020. The Board believes that trading in 2021 will be materially ahead of 2020.

 

The Acquisition is expected to generate approximately £100,000 and £200,000 of operating efficiencies for the enlarged Group in the years ending 31 December 2021 and 2022, respectively.

 

The Acquisition is expected to be significantly earnings enhancing immediately (i.e. for the current year ending 30 June 2022).

 

Strategic Rationale

 

UtilityTeam has generated a consistent organic growth rate, driven by a high quality sales engine. Revenue growth in 2020 was 24% to c.£5.2 million (FY19: c.£4.2 million). The Board believes UtilityTeam has a differentiated client proposition, supported by strong 'Zero Carbon' credentials.

 

The Board believes that UtilityTeam has a highly attractive and complementary customer base and the enhanced product offering will provide a more compelling customer proposition.

 

In addition, UtilityTeam's existing customer base of more than 800 customers provide significant cross-sell opportunities into eEnergy's existing EMaaS and EEaaS offerings. In particular, UtilityTeam's ability to secure strategic solutions for large-scale, high-volume energy users provides the Group with a substantial opportunity to deliver high-contract-value EEaaS solutions to these large scale customers. Further, UtilityTeam's presence and pipeline in Healthcare presents a clear cross-sell potential for the Group in terms of EEaaS and LaaS. 

 

The Board also believe a loyal customer base (demonstrated by the approximately 80% contract renewal rates) and greater revenue visibility resulting in a forward order book of £10.3 million (through multi-year contracts), will see an enlarged eEnergy benefit from an improved quality of earnings.

 

Management expect that the Acquisition will result in an improved industry ranking for the Group. 

 

eEnergy - Current Trading

 

As announced on 13 July 2021, the financial year ended 30 June 2021 represented a transformational period for the Group.

 

The Group expects to report full year revenue of £13.5 million, 200% growth on FY20 revenue of £4.5 million, with organic revenue increasing by 75%, to £7.9 million (FY20: £4.5 million). The Company expects to report an FY21 adjusted EBITDA of £0.7 million (FY20: loss of £1.5 million), despite the impacts of the COVID pandemic. Notably, all core business units are expected to be profitable on EBITDA basis for FY21. Profit before and after tax and before exceptional items is expected to be £0.1 million (FY20: loss £1.9 million). As at 30 June 2021, the Company had £0.7 million net cash (30 June 2020: £0.5 million net debt).

 

Whilst early in the current financial year, the Board expects revenue and profit before and after tax and before exceptional items for FY22 to be materially ahead of FY21, in-line with current market expectations. 

 

The Group will continue to assess strategic and accretive acquisition opportunities that will enable it to accelerate the rate of growth across the business.

 

The Company expects to release its audited final results for the financial year ended 30 June 2021 in late September 2021.

 

Integration Plan

 

The Board has established an experienced team with a clear plan to integrate UtilityTeam into the enlarged eEnergy group and deliver growth initiatives. On completion of the Acquisition, UtilityTeam's CEO, Delvin Lane, will join the eEnergy as a non-board Managing Director, leading the enlarged EMaaS division.

 

Delvin has over 25 years' experience in the energy sector having worked for a number of the UK's largest utilities. Among other roles, Delvin has previously been Head of Energy Services for EDF, supporting customers in delivering cash and carbon savings, and CEO of Anesco, an energy efficiency solutions company. Delvin joined UtilityTeam as a non-executive director in 2017, before being appointed as the company's CEO in 2019.

 

The integration team will work closely with the EMaaS division, to ensure integration of UtilityTeam within the existing proprietary Beond platform. UtilityTeam's client data will be moved to the Beond platform in order to consolidate operational activities.  All EMaaS sales prospect data will be combined within a single CRM and, once completed, all EMaaS campaigns and sales activities will be driven through a single route to market.

 

Alongside the integration Group management will implement initiatives to accelerate growth, including cross selling and consolidating operational activities. The Group intends to create sector specific sales channels that focus on the Public Sector (Beond), and industrial & commercial markets (UtilityTeam), creating operational efficiencies within the sales and marketing team. eEnergy will also look to repurpose capacity to develop and grow energy price risk management products to lock in longer term revenues for the enlarged Group. Further value creation is anticipated through embedding MyZeERO into all new EMaaS energy procurement solutions, creating EEaaS opportunities. Further, the ability to identify ECMs should increase the enlarged Group's "share of energy savings wallet".

 

The Board believes the above integration and growth acceleration initiatives will help deliver an uplift in revenue and earnings over the coming forward periods.

 

Terms of the Acquisition

 

eEnergy has conditionally agreed to acquire the entire issued share capital of UtilityTeam Topco Limited and 5% of the issued share capital of Utilityteam Trading Limited (not currently owned by UtilityTeam Topco Limited).

 

Under the terms of the Acquisition, total consideration for the Acquisition is for up to £21,000,000, subject to certain cash/debt and working capital adjustments.

 

The initial consideration of £15,855,000 will be satisfied as follows:

 

· cash consideration of £9,527,500, payable on completion with further cash consideration of £2,000,000, payable on or before 31 December 2021; and

· the issue of 18,031,250 Ordinary Shares, issued at a price of 24 pence per Ordinary Share representing, in aggregate, £4,327,500.

 

Further earn-out consideration of up to a maximum of £5,145,000 may be payable, based on a multiple of 7.0x UtilityTeam's EBITDA, for the year ending 31 December 2021. eEnergy will pay £7 for every £1 of EBITDA generated in excess of £2,265,000, up to a maximum EBITDA of £3,000,000 million ("Earn-Out Consideration").

 

The Earn-Out Consideration would be satisfied as follows:

· the first £1,472,500 of Earn-Out Consideration will be paid in cash; and

· any balance, up to £3,672,500, will be satisfied by the issue of new Ordinary Shares at a price that is the higher of 24p and the 30 day volume weighted average price prior to 31 December 2021.

 

The Consideration Shares will represent approximately 5.2% of the Enlarged Share Capital of the Company, assuming a fundraise of £12 million at the Placing Price ("Enlarged Share Capital").

 

The UtilityTeam shareholders have agreed not to dispose of any Consideration Shares or any ordinary shares received in relation to the Earn-Out Consideration for a period of 24 months from Admission and to be subject to an orderly market restriction for a further period of 12 months, in each case subject to certain limited exceptions.

 

Details of the Placing

 

eEnergy is proposing to raise approximately £12.0 million through the issue of the Placing Shares, to new and existing institutional, by way of an accelerated bookbuild at a Placing Price of 15.0 pence per Placing Share.

 

The Placing Price represents a discount of approximately 14.3 % to the closing mid-market price of 17.5 pence per Ordinary Share on 14 September 2021, being the last practicable day prior to the publication of this Announcement.

 

The Placing Shares will represent approximately 23.2 % of the Enlarged Share Capital.

 

The net proceeds of the Placing will be used to part fund the Acquisition and for general working capital. The Placing and the Acquisition are inter-conditional and will complete simultaneously with completion anticipated to occur on 17 September 2021.

 

The Placing is subject to the terms and conditions set out in the Appendix (which forms part of this announcement, such announcement and the Appendix together being the "Announcement").

 

The Placing will be conducted by the Joint Bookrunners in accordance with the terms and conditions set out in the Appendix to this Announcement. The Bookbuild will determine demand for and participation in the Placing. The Bookbuild will commence with immediate effect following this Announcement and is expected to close later today.

 

The timing of the close of the Bookbuild is at the absolute discretion of the Joint Bookrunners and the Company and the Joint Bookrunners and the Company reserve the right to close the Bookbuild process earlier or later without further notice. The allocations will be determined together by the Joint Bookrunners and the Company, in their absolute discretion, and will be confirmed orally by the Joint Bookrunners following the close of the Bookbuild. A further announcement will then be made as soon as practicable following the completion of the Bookbuild.

 

The Placing is not being underwritten and the Placing Shares will be issued under the existing authorities and disapplication of pre-emption rights, as approved by shareholders at the Company's last annual general meeting on 30 December 2020. 

 

The Placing Agreement contains customary warranties given by the Company to the Joint Bookrunners as to matters relating to the Company and its business and a customary indemnity from the Company to the Joint Bookrunners in respect of liabilities arising out of or in connection with the Placing. The Placing Agreement also contains customary rights of termination which could enable the Joint Bookrunners to terminate the Placing prior to Admission in certain limited circumstances. Further information on the Placing Agreement is set out in the Appendix to this Announcement.

 

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the Company's existing ordinary shares including the right to receive all dividends and other distributions declared, made or paid in respect of such shares after the date of issue of the Placing Shares.

 

Admission

 

Application has been made to the London Stock Exchange for the Consideration Shares and the Placing Shares to be admitted to trading on AIM ("Admission"). It is expected that Admission will take place at 8.00 a.m. on 17 September 2021 (or such date as may be agreed between the Company and the Joint Bookrunners). The Placing is conditional, inter alia, upon Admission becoming effective.

 

Concert Parties

 

eLight Concert Party

 

The Company's admission document, dated 9 January 2020, sets out a concert party for the vendor shareholders of the eLight business ("eLight Concert Party"), where the concert party had voting control over approximately 86.26 million Ordinary Shares, or 65.9% of the issued share capital, in eEnergy. In December 2020, following the acquisition by the Company of Beond Group Limited, the eLight Concert Party's aggregate voting interest was diluted to approximately 34.8% of the Company's issued share capital.

 

Following admission of all of the Consideration Shares and Placing Shares to trading on AIM, pursuant to the Acquisition and Placing, the eLight Concert Party is expected to have its aggregate voting interest diluted to less than 30.0% of the Enlarged Share Capital.

 

Implications for eLight Concert Party

 

Under Rule 9 of the Takeover Code, any person who acquires, whether by a series of transactions over a period of time or otherwise, an interest (as defined in the Takeover Code) in shares which, taken together with shares in which they are already interested and in which persons acting in concert with them are interested, carry 30.0% or more of the voting rights of a company which is subject to the Takeover Code, that person is required to make a general offer to all the remaining shareholders to acquire their shares.

 

Shareholders should note that the eLight Concert Party is free to increase its aggregated interest to 29.99% of the Company's issued and voting share capital without incurring an obligation under Rule 9 of the Takeover Code. 

 

APPENDIX

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE PLACING SHARES.

THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE UNITED STATES, THE REPUBLIC OF IRELAND OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. 

THIS ANNOUNCEMENT OR ANY PART OF IT DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO ACQUIRE, PURCHASE OR SUBSCRIBE FOR PLACING SHARES IN AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE UNITED STATES, THE REPUBLIC OF IRELAND OR ANY OTHER JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS OR MAY BE RESTRICTED OR UNLAWFUL.  THE RELEVANT CLEARANCES HAVE NOT BEEN, NOR WILL THEY BE, OBTAINED FROM THE SECURITIES COMMISSION OF ANY PROVINCE OR TERRITORY OF CANADA, NO PROSPECTUS HAS BEEN LODGED WITH, OR REGISTERED BY, THE AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION OR THE JAPANESE MINISTRY OF FINANCE; THE RELEVANT CLEARANCES HAVE NOT BEEN, AND WILL NOT BE, OBTAINED FOR THE SOUTH AFRICA RESERVE BANK OR ANY OTHER APPLICABLE BODY IN THE REPUBLIC OF SOUTH AFRICA IN RELATION TO THE PLACING SHARES 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 OR FROM AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND OR ANY OTHER JURISDICTION OUTSIDE THE UNITED KINGDOM.  PERSONS (INCLUDING, WITHOUT LIMITATION, NOMINEES AND TRUSTEES) WHO HAVE A CONTRACTUAL RIGHT OR OTHER LEGAL OBLIGATIONS TO FORWARD A COPY OF THIS ANNOUNCEMENT SHOULD SEEK APPROPRIATE ADVICE BEFORE TAKING ANY ACTION.

THE DISTRIBUTION OF THIS ANNOUNCEMENT OR ANY PART OF IT AND THE PLACING AND ISSUE OF THE PLACING SHARES IN CERTAIN JURISDICTIONS MAY BE RESTRICTED OR PROHIBITED BY LAW.  NO ACTION HAS BEEN TAKEN BY THE COMPANY OR SINGER CAPITAL MARKETS SECURITIES LIMITED AND TURNER POPE INVESTMENTS (TPI) LTD OR ANY OF THEIR RESPECTIVE AFFILIATES, AGENTS, CONSULTANTS, DIRECTORS, EMPLOYEES OR OFFICERS THAT WOULD PERMIT AN OFFER OF THE PLACING SHARES OR POSSESSION OR DISTRIBUTION OF THIS ANNOUNCEMENT OR ANY OTHER OFFERING OR PUBLICITY MATERIAL RELATING TO SUCH PLACING SHARES IN ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED, OTHER THAN THE UK.  PERSONS TO WHOSE ATTENTION THIS ANNOUNCEMENT HAS BEEN DRAWN ARE REQUIRED BY THE COMPANY AND SINGER CAPITAL MARKETS SECURITIES LIMITED AND TURNER POPE INVESTMENTS (TPI) LTD TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. 

IN THE EEA THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS DIRECTED ONLY AT PERSONS (A) IN MEMBER STATES OF THE EEA WHO ARE (I) QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(E) OF THE EU PROSPECTUS REGULATION ("EU QUALIFIED INVESTORS") OR (II) TO WHOM IT IS OTHERWISE LAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT WITHOUT ANY OBLIGATION TO PUBLISH A PROSPECTUS UNDER THE EU PROSPECTUS REGULATION; AND (B) ARE OTHERWISE PERSONS TO WHOM IT MAY BE LAWFULLY COMMUNICATED (TOGETHER "EU RELEVANT PERSONS").

IN THE UNITED KINGDOM THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS DIRECTED ONLY AT (A) PERSONS WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(E) OF THE UK PROSPECTUS REGULATION ("UK QUALIFIED INVESTORS") OR (B) PERSONS TO WHOM IT IS OTHERWISE LAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT WITHOUT ANY OBLIGATION TO ISSUE A PROSPECTUS APPROVED BY THE FCA PURSUANT TO THE UK PROSPECTUS REGULATION AND WHO: (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS FALLING WITHIN ARTICLE 19(5) (INVESTMENT PROFESSIONALS) OF FSMA (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER"); (II) ARE PERSONS FALLING 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 (TOGETHER "UK RELEVANT PERSONS").

THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS.  PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.  ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.  THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY.  EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES.

THIS ANNOUNCEMENT IS NOT AN OFFER OF SECURITIES FOR SALE INTO THE UNITED STATES.  THE PLACING SHARES HAVE NOT BEEN NOR WILL BE REGISTERED UNDER THE US SECURITIES ACT, UNDER THE SECURITIES LEGISLATION OF ANY STATE OF THE UNITED STATES OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES.  THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY AUTHORITY IN THE UNITED STATES, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR ENDORSED THE MERITS OF THE PLACING OR THE ACCURACY OR ADEQUACY OF THE CONTENTS OF THIS ANNOUNCEMENT.  ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE IN THE UNITED STATES.

THIS ANNOUNCEMENT INCLUDES STATEMENTS THAT ARE, OR MAY BE DEEMED TO BE "FORWARD-LOOKING STATEMENTS".  THESE FORWARD-LOOKING STATEMENTS CAN BE IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY, INCLUDING THE TERMS "BELIEVES", "ESTIMATES", "PLANS", "PROJECTS", "ANTICIPATES", "EXPERTS", "INTENDS", "MAY", "WILL" OR "SHOULD", OR, IN EACH CASE, THEIR NEGATIVE OR OTHER VARIATIONS OR COMPARABLE TERMINOLOGY.  THESE FORWARD-LOOKING STATEMENTS INCLUDE MATTERS THAT ARE NOT HISTORICAL FACTS.  THEY APPEAR IN A NUMBER OF PLACES THROUGHOUT THIS ANNOUNCEMENT AND INCLUDE STATEMENTS REGARDING THE DIRECTORS' CURRENT INTENTIONS, BELIEFS OR EXPECTATIONS CONCERNING, AMONG OTHER THINGS, THE COMPANY'S RESULTS OR OPERATIONS, FINANCIAL CONDITION, LIQUIDITY, PROSPECTS, GROWTH, STRATEGIES AND THE COMPANY'S MARKETS.  FORWARD-LOOKING STATEMENTS IN THIS ANNOUNCEMENT ARE BASED ON CERTAIN FACTORS AND ASSUMPTIONS, INCLUDING THE DIRECTORS' CURRENT VIEW WITH RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO RISKS RELATING TO FUTURE EVENTS AND OTHER RISKS, UNCERTAINTIES AND ASSUMPTIONS RELATING TO THE COMPANY'S OPERATIONS, GROWTH STRATEGY AND LIQUIDITY.  WHILST THE DIRECTORS CONSIDER THESE ASSUMPTIONS TO BE REASONABLE BASED UPON INFORMATION CURRENTLY AVAILABLE, THEY MAY PROVE TO BE INCORRECT.  SAVE AS REQUIRED BY LAW OR BY THE AIM RULES THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY RELEASE THE RESULTS OF ANY REVISIONS TO FORWARD-LOOKING STATEMENTS IN THIS ANNOUNCEMENT THAT MAY OCCUR DUE TO ANY CHANGE IN THE DIRECTORS' EXPECTATIONS OR TO REFLECT EVENTS OR CIRCUMSTANCES AFTER THE DATE OF THIS ANNOUNCEMENT.

THIS ANNOUNCEMENT HAS BEEN PREPARED AND ISSUED BY THE COMPANY AND IS AND WILL BE THE SOLE RESPONSIBILITY OF THE COMPANY.  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 SINGER CAPITAL MARKETS SECURITIES LIMITED OR TURNER POPE INVESTMENTS (TPI) LTD OR ANY OF THEIR RESPECTIVE ADVISERS, AFFILIATES, AGENTS, BRANCHES, CONSULTANTS, DIRECTORS, EMPLOYEES, OFFICERS OR ANY OTHER PERSON 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 PLACEE, ANY PERSON ACTING ON SUCH PLACEE'S BEHALF OR ANY OF THEIR RESPECTIVE ADVISERS, AND ANY LIABILITY THEREFOR IS EXPRESSLY DISCLAIMED.

THIS ANNOUNCEMENT HAS NOT BEEN EXAMINED OR APPROVED BY THE LONDON STOCK EXCHANGE, NOR IS IT INTENDED THAT IT WILL BE SO EXAMINED OR APPROVED.

Solely for the purposes of the product governance requirements contained within (a) EU Directive 2014/65/EU on markets in financial instruments, as IT FORMS PART OF THE LAW OF ENGLAND AND WALES BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (THE "euwa") AND AS MODIFIED BY OR UNDER DOMESTIC LAW ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II, as IT FORMS PART OF THE LAW OF ENGLAND AND WALES BY VIRTUE OF THE euwa AND AS MODIFIED BY OR UNDER DOMESTIC LAW; and (c) local implementing measures, including but not limited to the product governance requirements contained within the FCA Handbook (together the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that such Placing Shares are; (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment").  Notwithstanding the Target Market Assessment, Distributors (as defined within the MiFID II Product Governance Requirements) should note that:  the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom.  The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing.  Furthermore, it is noted that, notwithstanding the Target Market Assessment, Singer Capital Markets Securities Limited or Turner Pope Investments (TPI) Ltd as the Joint Bookrunners (defined below) will only procure investors who meet the criteria of professional clients and eligible counterparties.  For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability of appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.  Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.

This Announcement should be read in its entirety. 

Terms and conditions of, and the mechanics of participation in, the Placing

This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Placing.   By participating in the Placing, each Placee will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix. 

No commission will be paid to Placees or by Placees in respect of any Placing Shares.

Details of the Placing Agreement and the Placing Shares

Singer Capital Markets Securities Limited (the "Lead Bookrunner") and Turner Pope Investments (TPI) Ltd ("TPI") as joint bookrunners (together the "JointBookrunners" and each a "JointBookrunner") have entered into the Placing Agreement with the Company pursuant to which, on the terms and subject to the conditions set out in such Placing Agreement, each of the Joint Bookrunners as agent for and on behalf of the Company, has agreed to use  their reasonable endeavours to procure Placees for the Placing Shares at the Placing Price. The Placing is not being underwritten by either of the Joint Bookrunners.

The Placing Shares will, when issued, be subject to the articles of association of the Company and credited as fully paid and will rank pari passu in all respects with the existing issued Ordinary Shares in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid in respect of such Ordinary Shares after the date of issue of the Placing Shares.

The Placing Agreement contains certain undertakings, warranties and indemnities given by the Company for the benefit of the Joint Bookrunners. The Joint Bookrunners have absolute discretion as to whether or not to bring an action against the Company for breach of these undertakings, warranties and indemnities.

The Joint Bookrunners have the right to terminate the Placing Agreement in certain circumstances, details of which are set out below.

Application for Admission

Application will be made to the London Stock Exchange for Admission.

It is expected that Admission will take place at 8.00 a.m. on 17 September 2021 and that dealings in the Placing Shares on AIM will commence at the same time.

Principal terms of the Placing

The Lead Bookrunner is acting as joint broker and lead bookrunner to the Placing, as agent for and on behalf of the Company.  The Lead Bookrunner is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for the Company and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than the Company for providing the protections afforded to the customers of the Lead Bookrunner or for providing advice in relation to the matters described in this Announcement.

TPI is acting as joint broker and joint bookrunner to the Placing, as agent for and on behalf of the Company. TPI is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for the Company and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than the Company for providing the protections afforded to the customers of TPI or for providing advice in relation to the matters described in this Announcement.

The Joint Bookrunners are arranging the Placing severally (and not jointly nor jointly and severally) as agents of the Company.  Participation in the Placing will only be available to persons who may lawfully be, and are, invited by the Joint Bookrunners to participate. Each of the Joint Bookrunners and any of their respective affiliates are entitled to participate in the Placing as principal.

The exact number of Placing Shares to be allocated and issued to each Placee shall be determined by the Joint Bookrunners (in consultation with the Company) following completion of the Bookbuild.  The Joint Bookrunners will commence the Bookbuild today and it is expected to close no later than 4.30 p.m. on 15 September 2021 but may be closed earlier or later at the Lead Bookrunner's discretion.  The Joint Bookrunners may, in agreement with the Company, accept bids that are received after the Bookbuild has closed.  The number of Placing Shares will be announced on a Regulatory Information Service following completion of the Bookbuild.

Each Placee's allocation of Placing Shares will be communicated orally or by email by the relevant Joint Bookrunner to the relevant Placee.  That oral or email confirmation will give rise to an irrevocable, legally binding commitment by such Placee, in favour of the Joint Bookrunners and the Company, under which it agrees to acquire the number of Placing Shares allocated to it at the Placing Price and otherwise on the terms and subject to the conditions set out in this Appendix and in accordance with the Company's articles of association.  Except with the relevant Joint Bookrunner's consent, such commitment will not be capable of variation, revocation, termination or rescission at either the time of such oral confirmation or any time thereafter.

Each Placee's allocation and commitment will be evidenced by a contract note or form of confirmation issued to such Placee by the relevant Joint Bookrunner.  The contract note or form of confirmation will set out the number of Placing Shares allocated, the Placing Price and the aggregate amount owed by such Placee to the relevant Joint Bookrunner.  The terms of this Appendix will be deemed incorporated in that contract note or form of confirmation.

An offer to acquire Placing Shares which has been communicated by a prospective Placee to either of the Joint Bookrunners which has not been withdrawn or revoked prior to publication of this Announcement shall not be capable of withdrawal or revocation immediately following the publication of this Announcement without the consent of the relevant Joint Bookrunner.

T he Placing Price shall be payable to the Joint Bookrunners by all Placees.

Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to the relevant Joint Bookrunner (as agent for the Company), to pay to it (or as it may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares such Placee has agreed to acquire and the Company has agreed to allot and issue to that Placee.

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

All obligations of the Joint Bookrunners under the Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below under "Termination of the Placing".

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

To the fullest extent permissible by law and applicable FCA rules, none of  (a) the Lead Bookrunner, (b) any of the Lead Bookrunner's affiliates, agents, directors, officers, employees or consultants, (c) to the extent not contained within (a) or (b), any person connected with the Lead Bookrunner as defined in the FSMA ((b) and (c) being together "affiliates" and individually an "affiliate" of Lead Bookrunner or (d) any person acting on the Lead Bookrunner's behalf; (e) TPI, (f) any of TPI's affiliates, agents, directors, officers, consultants (g) to the extent not contained within (e) or (f), any person connected with TPI as defined in FSMA ((e) and (f) being together "affiliates" and individually an "affiliate" of TPI) shall have any liability (including to the extent permissible by law, any fiduciary duties) to any Placee or to any other person whether acting on behalf of a Placee or otherwise.  In particular, neither of the Joint Bookrunners nor any of their respective affiliates shall have any liability (including, to the extent permissible by law, any fiduciary duties) in respect of their conduct of the Placing or of such alternative method of effecting the Placing as the Joint Bookrunners and the Company may agree.

Registration and Settlement

Each Placee which has been allocated Placing Shares in the Placing will be sent a contract note or form of confirmation by the relevant Joint Bookrunner stating, inter alia, the number of Placing Shares allocated to it, the Placing Price, the aggregate amount owed by them to the relevant Joint Bookrunner.

Each Placee will be deemed to agree that it will do all things necessary to ensure that delivery and payment is completed as directed by the relevant Joint Bookrunner in accordance with either the standing CREST or certificated settlement instructions which they have in place with the relevant Joint Bookrunner.

Settlement of transactions in the Placing Shares (ISIN: GB00BJP1KD31) will take place within the CREST system, subject to certain exceptions.  Settlement through CREST will be with respect to the Placing Shares on a T+2 basis unless otherwise notified by the Joint Bookrunners and is expected to occur at 8.00 a.m. on 17 September 2021.

In accordance with the contract note or form of confirmation, settlement will be on a delivery versus payment basis.

In the event of any difficulties or delays in the admission of the Placing Shares to CREST or the use of CREST in relation to the Placing, the Company and each of the Joint Bookrunners may agree that the Placing Shares should be issued in certificated form.

Each of the Joint Bookrunners reserves the right to require settlement for the Placing Shares, and to deliver the Placing Shares to Placees, by such other means as they deem necessary if delivery or settlement to Placees is not practicable within the CREST system or would not be consistent with regulatory requirements in a Placee's jurisdiction.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above, in respect of either CREST or certificated deliveries, at the rate of two percentage points above prevailing LIBOR as determined by the Joint Bookrunners.

Each Placee is deemed to agree that if it does not comply with these obligations, the Joint Bookrunners may sell any or all of their Placing Shares on their behalf and retain from the proceeds, for the Company's account and benefit, an amount equal to the aggregate amount owed by the Placee plus any interest due.  The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and for any stamp duty or stamp duty reserve tax (together with any interest or penalties) which may arise upon the sale of their Placing Shares on their behalf.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees must ensure that, upon receipt, the form of confirmation 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 United Kingdom stamp duty or stamp duty reserve tax.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional and not having been terminated in accordance with its terms.

The obligations of each of the Joint Bookrunners under the Placing Agreement are, and the Placing is, conditional upon, inter alia:

1. none of the warranties or undertakings provided in the Placing Agreement by the Company being or having become untrue, inaccurate or misleading in any material respect at any time before Admission and no fact or circumstance having arisen which would constitute a material breach of any such warranties;

2. the performance by the Company of certain obligations under the Placing Agreement to the extent that they fall to be performed prior to Admission;

3. the completion of the Acquisition Agreement, except only as regards the condition relating to Admission, between the parties thereto without amendment; and

4.  Admission occurring not later than 8.00 a.m. on 17 September 2021 or such later time as the Lead Bookrunner may agree in writing with the Company (but in any event not later than 8.00 a.m. on 1 October 2021),

(all conditions to the obligations of each of the Joint Bookrunners included in the Placing Agreement being together, the "Conditions").

If any of the conditions set out in the Placing Agreement are not fulfilled or, where permitted, waived in accordance with the Placing Agreement within the stated time periods (or such later time and/or date as the Company and the Lead Bookrunner may agree), or the Placing Agreement is terminated in accordance with the circumstances described under "Termination of the Placing" below, the Placing will lapse and the Placee's rights and obligations shall cease and terminate at such time, all monies received from a Placee pursuant to the Placing shall be returned to such Placee without interest, at the risk of the relevant Placee and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.

Certain Conditions may be waived in whole or in part by the Lead Bookrunner, in its absolute discretion and the Lead Bookrunner may also agree in writing with the Company to extend the time for satisfaction of any condition.  Any such extension or waiver will not affect Placees' commitments as set out in this Appendix.

The Joint Bookrunners may terminate the Placing Agreement in certain circumstances, details of which are set out below.

None of the Joint Bookrunners, the Company nor any of their respective affiliates, agents, consultants, directors, employees or officers 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 any of them 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 Placing nor for any decision any of them may make as to the satisfaction of any condition or in respect of the Placing generally and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of the Joint Bookrunners.

Termination of the Placing

Either of the Joint Bookrunners may terminate its obligation under the Placing Agreement, in accordance with its terms, at any time prior to Admission if, inter alia:

1. it comes to the notice of a Joint Bookrunner that any statement contained in this Announcement or any presentation given in connection with the Placing, is or has become untrue, incorrect or misleading in any respect or there is a mistake in this Announcement or any presentation issued by or on behalf of the Company or that matters have arisen which constitute a significant new factor or would, if the Placing were made at that time, constitute an omission from the terms of this Announcement or any documentation or announcement issued or published on behalf of the Company in connection with the Placing, or there arises any new factor, mistake or inaccuracy relating to the information in this Announcement or any other document or announcement issued by or on behalf of the Company in connection with the Placing, in each case which is, in in the opinion of either of the Joint Bookrunners, materially prejudicial to the outcome of the Placing or Admission;

2.    it comes to the knowledge of the Joint Bookrunners that any of the warranties in the Placing Agreement was untrue, inaccurate or misleading when made or that any of the warranties in the Placing Agreement would be untrue, inaccurate or misleading when repeated at Admission or a matter has arisen which gives rise to a claim under any of the indemnities in the Placing Agreement, in each case which is, in in the opinion of either of the Joint Bookrunners, materially prejudicial to the outcome of the Placing or Admission; 

3. there has been a breach of any provision of the Acquisition Agreement by any of the parties to it (or any event has occurred or matter arisen after the date of the Placing Agreement which would have been such a breach if it had occurred or arisen before that date); or

4. there has occurred any change in national or international financial, market, industrial, economic or political conditions (including a material deterioration in, or a material escalation in response to, the COVID-19 pandemic) or there comes into effect any government regulation which, in any such case, in the opinion of either of the Joint Bookrunners (a) is likely to have a material and adverse effect on the financial position, the business or the prospects of the Company; or (b) renders the Placing or the creating of a market in the Ordinary Shares temporarily or permanently impracticable or inadvisable.

If the Placing Agreement is terminated in accordance with its terms, the rights and obligations of each Placee in respect of the Placing as described in this Announcement shall cease and terminate at such time, all monies received from a Placee pursuant to the Placing shall be returned to such Placee without interest, at the risk of the relevant Placee and each Placee agrees that no claim can be made by or on behalf of the Placee (or any person on whose behalf the Placee is acting) in respect thereof.

By participating in the Placing, each Placee agrees with the Company and the Joint Bookrunners that the exercise by the Company, or either of the Joint Bookrunners, of any right of termination or any other right or other discretion under the Placing Agreement shall be within the absolute discretion of the Company or the Joint Bookrunners and that neither the Company nor the Joint Bookrunners need make any reference to such Placee and that neither of the Joint Bookrunners, the Company, nor any of their respective affiliates, agents, directors, officers or employees shall have any liability to such Placee (or to any other person whether acting on behalf of a Placee or otherwise) whatsoever in connection with any such exercise. 

No prospectus

No prospectus has been or will be submitted to be approved by either (i) the FCA (in relation to the United Kingdom and the UK Prospectus Regulation) or (ii) any competent authority of any Relevant Member State (in relation to the EEA and the EU Prospectus Regulation), in relation to the Placing or the Placing Shares and no such prospectus is required on the basis that all offers of Placing Shares will be made pursuant to an exemption from the requirement to produce a prospectus under either the UK Prospectus Regulation or the EU Prospectus Regulation (as applicable). 

Placees' commitments will be made solely on the basis of the information contained in this Announcement and subject to any further terms set forth in the contract note or form of confirmation to be sent to individual Placees.

Representations, warranties and further terms

By participating in the Placing, each Placee and/or any person acting on such Placee's behalf acknowledges, agrees, represents, undertakes, and warrants with each of the Joint Bookrunners (for themselves  and as agents on behalf of the Company) that (save where the Joint Bookrunners expressly agree in writing to the contrary):

1. it has read and understood this Announcement in its entirety and it agrees and acknowledges that the issue and acquisition of the Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, indemnities, acknowledgements, agreements, undertakings and other information contained in this Appendix;

2. it is a Relevant Person and undertakes that it will acquire, hold, manage and (if applicable) dispose of any Placing Shares that are allocated to it for the purposes of its business;

3.    in the case of an EU Relevant Person in a Relevant Member State or a UK Relevant Person who acquires any Placing Shares pursuant to the Placing:

a.  it is an EU Qualified Investor or a UK Qualified Investor (as applicable); and

b.         in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Regulation 5(1) of the EU Prospectus Regulation and Regulation 5(1) of the UK Prospectus Regulation:

i. the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale in circumstances where either the EU Prospectus Regulation or the UK Prospectus Regulation applies or to, persons in any Relevant Member State or in the UK other than EU Qualified Investors or UK Qualified Investors or in circumstances in which the prior consent of the Joint Bookrunners has not 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 EEA or in the UK other than EU Qualified Investors or UK Qualified Investors, the offer of those Placing Shares to it is not treated under the EU Prospectus Regulation or the UK Prospectus Regulation as having been made to such persons;

4.  it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are acquired will not be, a resident of, or with an address in, or subject to the laws of, Australia, Canada, Japan, the Republic of South Africa or the Republic of Ireland, and it acknowledges and agrees that the Placing Shares have not been and will not be registered or otherwise qualified under the securities legislation of Australia, Canada, Japan, the Republic of South Africa or the Republic of Ireland and may not be offered, sold or acquired, directly or indirectly, within those jurisdictions;

5.  it acknowledges that no action has been or will be taken by any of the Company, the Joint Bookrunners or any person acting on their behalf that would, or is intended to, permit a public offer of the Placing Shares in the United States or in any country or jurisdiction where any such action for that purpose is required.  In addition, the Placing Shares have not been registered or otherwise qualified, and will not be registered or otherwise qualified, for offer and sale nor will a prospectus be cleared or approved in respect of any of the Placing Shares under the securities laws of the United States (or any state or other jurisdiction of the United States) Australia, Canada, Japan, the Republic of South Africa or the Republic of Ireland and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within the United States, Australia, Canada, Japan, the Republic of South Africa, the Republic of Ireland or in any country or jurisdiction where any such action for that purpose is required;

6. it will not distribute, forward, transfer or otherwise transmit this Announcement or any part of it, or any other presentational or other materials concerning the Placing in or into or from the United States (including electronic copies thereof) to any person, and it has not distributed, forwarded, transferred or otherwise transmitted any such materials to any person;

7. it and/or each person on whose behalf it is participating (i) is entitled to acquire Placing Shares pursuant to the Placing under the laws and regulations of all relevant jurisdictions; (ii) has fully observed such laws and regulations; and (iii) has the capacity and has obtained all requisite authorities and consents (including, without limitation, in the case of a person acting on behalf of a Placee, all requisite authorities and consents to agree to the terms set out or referred to in this Appendix) under those laws or otherwise and has complied with all necessary formalities to enable it to enter into the transactions and make the acknowledgements, agreements, indemnities, representations, undertakings and warranties contemplated hereby and to perform and honour its obligations in relation thereto on its own behalf (and in the case of a person acting on behalf of a Placee on behalf of that Placee); (iv) does so agree to the terms set out in this Appendix and does so make the acknowledgements, agreements, indemnities, representations, undertakings and warranties contained in this Announcement on its own behalf (and in the case of a person acting on behalf of a Placee on behalf of that Placee); and (v) is and will remain liable to the Company and each of the Joint Bookrunners for the performance of all its obligations as a Placee of the Placing (whether or not it is acting on behalf of another person);

8.    it is acquiring the Placing Shares for its own account or if it is acquiring the Placing Shares on behalf of another person it confirms that it exercises sole investment discretion in relation to such other person's affairs and, in particular, if it is a pension fund or investment company it is aware of and acknowledges it is required to comply with all applicable laws and regulations with respect to its acquisition of Placing Shares;

9. it understands (or if acting on behalf of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in this Appendix;

10.  it has not received a prospectus or other offering document in connection with the Placing and acknowledges that no prospectus or other offering document: (i) is required under the UK Prospectus Regulation or the EU Prospectus Regulation; and (ii) has been or will be prepared in connection with the Placing;

11.  the Ordinary Shares are admitted to trading on AIM, and that the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules, which includes a description of the nature of the Company's business and the Company's most recent balance sheet and profit and loss account (the "Exchange Information"), and that it is able to obtain or access the Exchange Information without undue difficulty, and is able to obtain access to such information or comparable information concerning any other publicly traded company, without undue difficulty;

12.  it has made its own assessment of the Company, the Placing Shares and the terms of the Placing and has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing.  It has not relied on (i) any investigation that the Joint Bookrunners or any person acting on either Joint Bookrunner's behalf may have conducted with respect to the Company, the Placing or the Placing Shares; or (ii) any other information given or any other representations, statements or warranties made at any time by any person in connection with Admission, the Company, the Placing, the Placing Shares or otherwise;

13.  neither the Joint Bookrunners, the Company or any of their respective affiliates, agents, consultants, directors, employees, officers or any person acting on behalf of any of them has provided, nor will provide, it with any material regarding the Placing Shares or the Company or any other person in addition to the information in this Announcement; nor has it requested either of the Joint Bookrunners, the Company, any of their respective affiliates, agents, consultants, employees, directors or officers or any person acting on behalf of any of them to provide it with any such information;

14.  the content of this Announcement has been prepared by and is exclusively the responsibility of the Company.  Neither of the Joint Bookrunners, nor any of their respective affiliates, agents, consultants, employees, directors or officers nor any persons acting on behalf of any of them are responsible for or has or shall have any liability for any information, representation, warranty or statement, written or oral relating to the Company and either contained in this Announcement or previously or concurrently published by or on behalf of the Company.  Neither of the Joint Bookrunners will be liable for any Placee's decision to participate in the Placing based on any information, representation, warranty or statement contained in this Announcement, the Exchange Information or otherwise.  Neither the Joint Bookrunners, the Company, or any of their respective affiliates, agents, consultants, directors, employees or officers has made any representation or warranty to the Placee, express or implied, with respect to the Company, the Placing or the Placing Shares or the accuracy, completeness or adequacy of the information in this Announcement or the Exchange Information.  Nothing in this Appendix shall exclude any liability of any person for fraudulent misrepresentation;

15.  the only information on which it is entitled to rely and on which it has relied in committing to subscribe for the Placing Shares is contained in this Announcement.  It has satisfied itself that such information is still current and is all that it deems necessary to make an investment decision in respect of the Placing Shares;

16.  it has the funds available to pay for the Placing Shares which it has agreed to acquire and acknowledges, agrees and undertakes that it will make payment to the relevant Joint Bookrunner for the Placing Shares allocated to it in accordance with the terms and conditions of this Announcement on the due times and dates set out in this Announcement or the relevant contract note or form of confirmation, failing which the relevant Placing Shares may be placed with others on such terms as the Joint Bookrunners may, in their absolute discretion determine without liability to the Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear any stamp duty or stamp duty reserve tax (together with any interest or penalties due pursuant to the terms set out or referred to in this Announcement) which may arise upon the sale of such Placee's Placing Shares on its behalf;

17.  it, or the person specified by it for registration as a holder of the Placing Shares will be responsible for any liability to stamp duty or stamp duty reserve tax payable on the acquisition of any of the Placing Shares or the agreement to subscribe for the Placing Shares and shall indemnify the Company and each of the Joint Bookrunners in respect of the same on the basis that the Placing Shares will be allotted to a CREST stock account of either of the Joint Bookrunners who will hold them as nominee on behalf of such Placee (or the person specified by it for registration as holder of the Placing Shares) until settlement with it in accordance with its standing settlement instructions; 

18.  the allocation, allotment, issue and delivery to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a stamp duty or stamp duty reserve tax liability under (or at a rate determined under) any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depository receipts and clearance services) and that no instrument under which it subscribes for Placing Shares (whether as principal, agent or nominee) would be subject to stamp duty or stamp duty reserve tax at the increased rates referred to in those sections and that it, or the person specified by it for registration as holder of the Placing Shares, is not participating in the Placing as nominee or agent for any person or persons to whom the allocation, allotment, issue or delivery of Placing Shares would give rise to such a liability;

19.  it has only communicated or caused to be communicated and it 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 Placing Shares in circumstances in which section 21(1) of the FSMA does not require approval of the communication by an authorised person and it acknowledges and agrees that neither of the Joint Bookrunners has approved this Announcement in its capacity as an authorised person under section 21 of FSMA and it may not therefore be subject to the controls which would apply if it was made or approved as a financial promotion by an authorised person;

20.  it has complied and it will comply with all applicable laws with respect to anything done by it or on its behalf in relation to the Placing Shares (including all relevant provisions of the FSMA in respect of anything done in, from or otherwise involving the United Kingdom);

21.  neither of the Joint Bookrunners, the Company, any of their respective affiliates, agents, consultants, directors, employees or officers or any person acting on behalf of any of them are making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing nor providing advice in relation to the Placing nor in respect of any acknowledgements, agreements, indemnities, representations, undertakings or warranties contained in the Placing Agreement nor the exercise or performance of each of the Joint Bookrunners' rights and obligations thereunder, including any rights to waive or vary any conditions or exercise any termination right.  Its participation in the Placing is on the basis that it is not and will not be a client of either of the  Joint Bookrunners and no Joint Bookrunner has any duties or responsibilities to it for providing the protections afforded to its clients or customers under the rules of the FCA, and any payment by it will not be treated as client money governed by the rules of the FCA; 

22.  the Joint Bookrunners and each of their respective affiliates, each acting as an investor for its or their own account(s), may, in accordance with applicable legal and regulatory provisions, bid or subscribe for and/or purchase Placing Shares and, in that capacity, may retain, purchase, offer to sell or otherwise deal for its or their own account(s) in the Placing Shares, any other securities of the Company or other related investments in connection with the Placing or otherwise.  Accordingly, references in this Announcement to the Placing Shares being offered, subscribed, acquired or otherwise dealt with should be read as including any offer to, or subscription, acquisition or dealing by, the Joint Bookrunners and/or any of their respective affiliates, acting as an investor for its or their own account(s).  Neither the Joint Bookrunners, nor the Company intends to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligation to do so;

23.  it will not make any offer to the public of the Placing Shares and it has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom or in any Relevant Member State prior to the expiry of a period of six months from  Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purpose of their business or otherwise in circumstances which have not resulted and which will not result in an offer to the public in the United Kingdom for the purposes of section 85(1) of FSMA or an offer to the public (within the meaning of the EU Prospectus Regulation) in any Relevant Member State;

24.  it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000, the Terrorism Act 2006, the Anti Terrorism Crime and Security Act 2001 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (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;

25.  it is aware of the obligations regarding insider dealing in the Criminal Justice Act 1993, market abuse under the UK MAR and the Proceeds of Crime Act 2002 and confirms that it has and will continue to comply with those obligations;

26.  it has neither received nor relied on any confidential or price-sensitive information concerning the Company in accepting this invitation to participate in the Placing;

27.  if it has received any 'inside information' (for the purposes of the UK MAR and section 56 of the Criminal Justice Act 1993) in relation to the Company and its securities, it confirms that it has received such information within the market soundings regime provided for in article 11 of the UK MAR and associated delegated regulations and it has not: (i) dealt (or attempted to deal) in the securities of the Company; (ii) encouraged, recommended or induced another person to deal in the securities of the Company; or (iii) unlawfully disclosed inside information to any person, prior to the information being made publicly available;

28.  in order to ensure compliance with the Money Laundering Regulations 2017, the Joint Bookrunners (each for themselves and as agent on behalf of the Company) or the Company's registrars may, in their absolute discretion, require verification of its identity.  Pending the provision to the Joint Bookrunners or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at the Joint Bookrunners' absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form may be delayed at the Joint Bookrunners' or the Company's registrars', as the case may be, absolute discretion.  If within a reasonable time after a request for verification of identity the Joint Bookrunners (each for themselves and as agent on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, the Joint Bookrunners and/or the Company may, at their absolute discretion, terminate their commitment in respect of the Placing, in which event the monies payable on acceptance of allotment will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;

29.  it acknowledges that:

a.  the information that a prospective placee provides in documents in relation to the Placing or subsequently by whatever means which relates to the prospective placee (if they are an individual) or a third party individual ("Personal Data") will be held and processed by the Company (and any third party to whom it may delegate certain administrative functions in relation to the Company) in compliance with the relevant data protection legislation and regulatory requirements of the United Kingdom. Such information will be held and processed by the Company (or any third party, functionary or agent appointed by the Company) for the following purposes:

i.  verifying the identity of the prospective placee to comply with statutory and regulatory requirements in relation to anti-money laundering procedures;

ii. contacting the prospective placee with information about products and services, or its affiliates, which may be of interest to the prospective placee;

iii. carrying out the business of the Company and the administering of interests in the Company;

iv. meeting with the legal, regulatory, reporting and/or financial obligations of the Company in England and Wales (and elsewhere as required); and

v. disclosing Personal Data to other functionaries of, or advisers to, the Company to operate and/or administer the Company's business;

b. where appropriate it may be necessary for the Company (or any third party, functionary or agent appointed by the Company) to:

i.  disclose Personal Data to third party service providers, agents or functionaries appointed by the Company to provide services to prospective placees; and

ii. transfer Personal Data outside the United Kingdom into countries or territories which do not offer the same level of protection for the rights and freedoms of prospective placees as the United Kingdom.

If the Company (or any third party, functionary or agent appointed by a member of the Company) discloses Personal Data to such a third party, agent and/or functionary and/or makes such a transfer of Personal Data, it will use reasonable endeavours to ensure that any third party, agent or functionary to whom the relevant Personal Data are disclosed or transferred is contractually bound to provide an adequate level of protection in respect of such Personal Data; and

c. in providing such Personal Data, prospective placees will be deemed to have agreed to the processing of such Personal Data in the manner described above. Prospective placees are responsible for informing any third party individual to whom the Personal Data relates of the disclosure and use of such data in accordance with these provisions;

30.  it acknowledges that its commitment to acquire Placing Shares on the terms set out in this Announcement and in the contract note or form of confirmation will continue notwithstanding any amendment that may in future be made to the terms and conditions of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's or the Joint Bookrunners' conduct of the Placing;

31.  it 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 is aware that it may be required to bear, and is able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing.  It has relied upon its own examination and due diligence of the Company and its affiliates taken as a whole, and the terms of the Placing, including the merits and risks involved;

32.  it irrevocably appoints any duly authorised officer of any of the Joint Bookrunners as its agent for the purpose of executing and delivering to the Company and/or its registrars any documents on its behalf necessary to enable it to be registered as the holder of any of the Placing Shares for which it agrees to subscribe or purchase upon the terms of this Announcement;

33.  the Company, the Joint Bookrunners and others (including each of their respective affiliates, agents, directors, officers or employees) will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and agreements, which are given to the Joint Bookrunners, each on  their own behalf and on behalf of the Company and are irrevocable, and agree that if any of the representations and agreements deemed to have been made by it by its subscription for, or purchase of, Placing Shares, are no longer accurate, it shall promptly notify the Company and the Joint Bookrunners;

34.  time is of the essence as regards its obligations under this Appendix;

35.  any document that is to be sent to it in connection with the Placing will be sent at its risk and may be sent to it at any address provided by it to the Joint Bookrunners; and

36.  the terms and conditions in this Appendix and all documents into which this Appendix is incorporated by reference or otherwise validly forms a part and/or any agreements entered into pursuant to these terms and conditions and all agreements to acquire Placing Shares pursuant to the Placing will be governed by and construed in accordance with English law and it submits to the exclusive jurisdiction of the English courts in relation to any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or the Joint Bookrunners 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.

By participating in the Placing, each Placee (and any person acting on such Placee's behalf) agrees to indemnify and hold the Company, the Joint Bookrunners and each of their respective affiliates, agents, consultants, directors, employees and officers 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 any of the acknowledgements, agreements, representations, undertakings and warranties given by the Placee (and any person acting on such Placee's behalf) in this Appendix or incurred by any Joint Bookrunner, the Company or any of their respective affiliates, agents, consultants, directors, employees or officers arising from the performance of the Placee's obligations as set out in this Announcement, and further agrees that the provisions of this Appendix shall survive completion of the Placing.

The agreement to allot and issue Placing Shares to Placees (or the persons for whom Placees are contracting as agent) free of stamp duty and stamp duty reserve tax in the United Kingdom relates only to their allotment and issue to Placees, or such persons as they nominate as their agents, directly by the Company.  Such agreement assumes that the Placing Shares are not being acquired 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 dealings in the Placing Shares, stamp duty or stamp duty reserve tax may be payable.  In that event, the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax and neither the Company nor the Joint Bookrunners shall be responsible for such stamp duty or stamp duty reserve tax.  If this is the case, each Placee should seek its own advice and they should notify the Joint Bookrunners accordingly.  In addition, Placees should note that they will be liable for any capital duty, stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the United Kingdom by them or any other person on the acquisition by them of any Placing Shares or the agreement by them to acquire any Placing Shares and each Placee, or the Placee's nominee, in respect of whom (or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such non-United Kingdom stamp, registration, documentary, transfer or similar taxes or duties undertakes to pay such taxes and duties, including any interest and penalties (if applicable), forthwith and to indemnify on an after-tax basis and to hold harmless the Company and the Joint Bookrunners in the event that either the Company and/or the Joint Bookrunners have incurred any such liability to such taxes or duties.

The acknowledgements, representations, undertakings and warranties contained in this Appendix are given to each Joint Bookrunner for itself and as agent on behalf of the Company and are irrevocable and will survive completion of the Placing.

Each Placee and any person acting on behalf of the Placee acknowledges that the Joint Bookrunners do not owe any fiduciary or other duties to any Placee in respect of any acknowledgements, agreements, indemnities, representations, undertakings or warranties in the Placing Agreement.

When a Placee or any person acting on behalf of the Placee is dealing with a Joint Bookrunner, any money held in an account with the relevant Joint Bookrunner 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 relevant rules and regulations of the FCA made under FSMA. Each 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 the relevant Joint Bookrunner's money (as applicable) in accordance with the client money rules and will be held by it under a Bookrunning relationship and not as trustee.

The Lead Bookrunner will rely on the CASS Delivery Versus Payment Transaction Exemptions (CASS 6.1.12R and 7.11.14R) in relation to shares and/or monies relating to the Placing.

References to time in this Announcement are to London time, unless otherwise stated.  All times and dates in this Announcement may be subject to amendment.

No statement in this Announcement is intended to be a profit forecast, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

The price of Placing Shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the Placing Shares.  Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

The Placing Shares to be issued or sold pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

DEFINITIONS

The following definitions apply throughout this Announcement unless the context otherwise requires:

"Acquisition Agreement" means the agreement, dated 15 September 2021, between the Company and the existing shareholders of Utilityteam Topco Limited pursuant to which the Company is to acquire the entire issued share capital of Utilityteam Topco Limited and 5% of the issued share capital of Utilityteam Trading Limited;

"Admission" means admission of the Placing Shares and the Consideration Shares to trading on AIM;

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

"AIM Rules" means the AIM Rules for Companies, incorporating guidance notes, published by the London Stock Exchange as at the date of this Announcement;

"Announcement" means this announcement including, but not limited to, the Appendix and the information contained therein;

"Appendix" means the appendix to this Announcement;

"Bookbuild" means the book building process undertaken by the Joint Bookrunners to determine demand for participation in the Placing;

"Company" means eEnergy Group plc;

"Consideration Shares" means the 18,031,250 new Ordinary Shares to be issued by the Company pursuant to the Acquisition Agreement;

"EEA" means the European Economic Area;

"EU Prospectus Regulation" means the Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market as may be amended from time to time;

"EU Qualified Investors" has the meaning given to it within the capitalised text at the beginning of the Appendix (and accordingly "EU Qualified Investor" is the singular version of that term);

"EU Relevant Persons" has the meaning given to it within the capitalised text at the beginning of the Appendix (and accordingly "EU Relevant Person" is the singular version of that term);

"EUWA" means the European Union (Withdrawal) Act 2018;

"Exchange Information" has the meaning set out in warranty 11 of the Appendix;

"FCA" means the UK Financial Conduct Authority;

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

"Joint Bookrunner s" has the meaning set out in the section of the Appendix headed "Details of the Placing Agreement and the Placing Shares";

"Lead Bookrunner" means Singer Capital Markets Securities Limited;

"LIBOR" means the London Interbank Offered Rate;

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

"Ordinary Shares" means the ordinary shares of 0.3 pence each in the capital of the Company;

"Placee" means a person who is invited to and chooses to participate in the Placing by making or accepting an offer to acquire Placing Shares;

"Placing" means the placing of the Placing Shares at the Placing Price by the Joint Bookrunners pursuant to the terms of the Placing Agreement;

"Placing Agreement" means the agreement dated 15 September 2021 and entered into between both of the Joint Bookrunners, Singer Capital Markets Advisory LLP and the Company;

"Placing Price" means the price at which the Placees subscribe for the Placing Shares priced at 15 pence per Placing Share;

"Placing Shares" means the new Ordinary Shares that the Company will allot pursuant to the Placing;

"Regulatory Information Service" has the meaning given to it in the AIM Rules;

"Relevant Member State" means a member state of the EEA which has implemented the EU Prospectus Regulation;

"Relevant Persons" means UK Relevant Persons and EU Relevant Persons;

"TPI" means Turner Pope Investments (TPI) Ltd;

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

"UK MAR" means the Regulation (EU) No. 596/2014 of the European Parliament and of the Council of 16 April 2014 as it forms part of the law of England and Wales by virtue of section 3 of the EUWA and as modified by or under the EUWA or other domestic law;

"UK Qualified Investors" has the meaning given to it within the capitalised text at the beginning of the Appendix (and accordingly "UK Qualified Investor" is the singular version of that term);

"UK Prospectus Regulation" means the Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, as it forms part of the law of England and Wales by virtue of section 3 of the EUWA and as modified by or under the EUWA or other domestic law and as may be amended from time to time;

"UK Relevant Persons" has the meaning given to it within the capitalised text at the beginning of the Appendix (and accordingly "UK Relevant Person" is the singular version of that term);

"US" means the United States of America; and

"US Securities Act" means the US Securities Act of 1933, as amended from time to time.

 

 

 

[1] Adjusted for revenue, cost and provision adjustments (see "Overview of Utility Team" in "Further Information" below for detailed reconciliation).

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