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Gordian Investments (GOR)

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Friday 05 August, 2005

Gordian Investments


Gordian Investments PLC
05 August 2005

5 AUGUST 2005

('Gordian Investments' or 'the Company')


Main Proposals

  • Gordian Investments has conditionally agreed to acquire the entire issued
    share capital of All New Video Limited ('ANV'), a managed services company
    offering live multi-party 3G video conferencing, PC to video calling and
    video mail, for an initial consideration of £4 million, payable in cash and
    consideration shares. Further consideration of up to £6 million, to be
    satisfied by the issue of additional consideration shares, is payable
    subject to certain profit and/or share price targets.
  • The initial consideration shares will represent approximately 64% of the
    enlarged share capital of the Company and in view of the size of ANV
    relative to the Company, the acquisition will constitute a reverse takeover.
  • Change of name to All New Video plc
  • New Enlarged Group Board

Video Communications Service Market

  • Strong Growth
  • Fixed-line Video Conferencing market is growing at a compound rate of
    approximately 24% per annum
  • Over 6.6 million 3G subscribers in Western Europe


  • Launched a range of products and services including:

       1.   Mobile Video Conferencing including Video Mail
       2.   Fixed-line Video Conferencing
       3.   Mobile Video content delivery services.

  • Development of new services: PC to 3G phone; technology used in television
    broadcast and trialled with emergency services
  • Turnover £373,000  (up 94.3% from 2004)
  • High growth in the market

David Atkins, the Chief Executive of ANV commented:

'The flotation through reversing into Gordian Investments is a wonderful
opportunity for ANV. Not only will the flotation raise ANV's profile in the
City, but will also enable ANV to grow along side the 3G industry. I am looking
forward to working hard with my management team to develop the business for the
benefit of the enlarged group's shareholders'

For further information:

David Atkins (Chief Executive Officer)          870 240 1482
Chris Fairhall (Chief Operating Officer)

Beattie Financial
Mike Wort/ Jo Clewlow/ Tim Pilgrim              0207 053 6400

A copy of the Admission Document has been published and has been made available
to the public during normal business hours on any weekday, free of charge, from
the offices of Lawrence Graham LLP at 190 Strand, London WC2R 1JN and from
Teather & Greenwood Limited at Beaufort House, 15 St. Botolph Street, London
EC3A 7QR and shall remain available for at least one month after the date of


                                                     10 months ended 31 Year ended 31      Year ended 31
                                                     March              March              March
                                                     2003               2004               2005
                                                     £'000              £'000              £'000

Turnover                                              15                192                373
Cost of sales                                          5                 79                162

Gross profit                                          10                113                211
Administrative expenses                               26                119                249

Operating loss                                       (16)               (86)               (38)
Interest payable and similar expenses                  -                  -                  2

Loss on ordinary activities before taxation          (16)               (86)               (40)
Taxation on Loss on ordinary activities                -                  -                  -

Retained loss for the period                         (16)               (86)               (40)

('Gordian Investments' or 'the Company')


Gordian Investments Plc has conditionally agreed to acquire the entire issued
share capital of ANV for an initial consideration of £4 million, of which £3.875
million shall be satisfied by the issue of 55,357,143 Ordinary Shares at an
issue price of 7 pence per share and the balance in cash. Additional
consideration of up to £6 million is payable to the vendors of ANV, to be
satisfied by the issue of further consideration shares at an issue price of 7
pence per share, in relation to the financial years ending 31 May 2006 and 31
May 2007, based on performance criteria.

The initial consideration shares will represent approximately 64 per cent of the
enlarged share capital of the Company and in view of the size of ANV relative to
the Company, the acquisition will constitute a reverse takeover.  Assuming the
acquisition receives shareholder approval at an Extraordinary General Meeting to
be held on 30 August 2005, Gordian Investments will change its name to All New
Video plc.

Upon completion of the acquisition and admission, David Atkins and Chris
Fairhall, two of the vendors, will be appointed Chief Executive and Chief
Operating Officer respectively of the New Group Board with other appointments to
include Lee Woodland as Chief Technical Officer, Douglas Kearney as Finance
Director, John Hawkins as Non-Executive Chairman and Hugh de Lusignan as
Non-Executive Director (the 'Proposed Directors'). David Barton, Non-Executive
Chairman of Gordian Investments, will remain with the enlarged group as a
Non-Executive Director.

Established in 2002, ANV's directors believe that it is the only commercially
available service to offer live multi party video calling in the UK. The Newbury
based company also provides PC to video phone calling and video mail services
and has developed services which broaden the range of currently available mobile
video services in the UK, such as enabling a video conference to take place
between a PC on the internet and a 3G videophone.

Background on Gordian Investments

Gordian Investments was admitted to AIM in March 2005, and was established to
capitalise on acquisition and investment opportunities in the technology, media
and telecoms sectors. Following its initial admission, the Company had cash of
£1,175,000 with no other significant assets or liabilities

The Directors believe that the acquisition of ANV achieves the aims of the
Company's investment strategy.



The ANV Group offers a wide range of video services across both fixed line and
mobile telephony platforms. David Atkins, CEO of the ANV Group, established ANV
in 2002. He had previously jointly founded Videoweb Limited, a video
conferencing business, which was sold in 1999, for a total value of £6.7 million
to Genesys SA, a NASDAQ quoted company.

ANV was formed to exploit what its then directors believed was a high growth
market in video calling, video conferencing and other video-related services on
3G mobile phones. There are already over 6.6 million users of 3G mobile phones
in Western Europe and it is estimated that there will be approximately 90
million 3G subscribers by the end of 2008(1). At present, a number of mobile
network operators ('MNOs') in the UK only offer video calling between two
parties, whereas ANV offers MNOs and enterprise customers a range of services
such as video conferencing, video mail, video call termination, video portal
services and video logs.

The Video Communication Services Market

Fixed-line Video Conferencing

Fixed-line video conferencing is based upon ISDN or internet protocol ('IP')
technologies.  It has been estimated that in the UK the fixed line video
conferencing market is growing at a compound rate of 24 per cent per annum(2).
The Proposed Directors consider that this growth has been stimulated by various
factors including:

  • the inconvenience and cost of international travel;
  • the increase in home working and the increasing acceptance of web cameras;
  • the reduction in cost of corporate video conferencing equipment; and
  • the availability to corporate customers of value added solutions which
    include integration, managed services and outsourcing.

ANV has managed video conferencing projects for clients including leading city
financial institutions and global manufacturing businesses.  ANV's close
relationship with Radvision, (a NASDAQ quoted Israeli company which manufactures
IP and 3G video conferencing equipment) and expertise in networking, enables it
to evaluate any current video network platform and to make recommendations as to
the most suitable solution.

(1) 'Mobile Video: Worldwide market analysis and strategic outlook 2003 - 2008' by
    ARC Group

(2) 'The business case for Videoconferencing'    Wainhouse research

Mobile Video Conferencing

The mobile video conferencing market is forecast to generate worldwide revenues
of US $5.4 billion in 2008 with approximately 250 million consumers using mobile
video services.(1)

Currently MNOs in the UK offer video calls to other 3G mobiles only.  Apart from
services offered by ANV the Proposed Directors are not aware that there are any
other commercially available services in the UK that enable subscribers to hold
a video conference call with fixed line users or that allow subscribers to
conduct video conferencing with three or more participants over 3G networks.

ANV Group's Products and Services

ANV's services to MNO's corporate customers and consumers include:

Video Mail

ANV's video mail solution allows 3G and IP video callers to record a video
message for a call recipient if a call cannot be connected. The video message
may be replayed on a 3G handset or online. This service permits MNOs to receive
call completion revenues that would otherwise not be available.

Video Call Termination

ANV's video call termination service is similar to voice messaging except that
the message can be sent to the recipient as an MMS attachment so that it may be
received by non-video enabled handsets.

Currently ANV is providing Orange with a video call termination service in the
UK and there are ongoing discussions with the France Telecom Group to extend
this service across further Orange divisions within Western Europe.  ANV is also
in discussions with other MNOs to roll out this service across additional

Video Portal Services

ANV's video portal solution allows 3G handset users to select a wide variety of
streamed or live content such as news or film clips.

ANV's technology has been used in broadcasts by the BBC and ANV is also running
trials with the Royal Berkshire Ambulance Trust with a 3G video service which
broadcasts live video footage from emergency incidents to the accident and
emergency department of local hospitals to ensure staff are prepared for
victims' injuries.

Video Logs

Web logs permit the creation by individuals of web based diaries.

ANV has launched what the Proposed Directors believe to be the first commercial
3G video log service in the UK with ITN. Users are able to submit video content
through their 3G handset.

Video conferencing

ANV provides video conferencing using a variety of hardware, manufacturers'
bridges and gateways, supporting a wide variety of video enabled endpoints for
3G, ISDN, and IP. ANV is independent of any particular network. It can support,
manage and automate calls and has its own call management and technical support

ANV supplies customers with the appropriate hardware required to undertake fixed
line video conferencing. ANV also offers service and maintenance contracts on
equipment sold from its stock.

The video conferencing services include mobile meetings and mobile conferencing.
Under the ANV mobile conferencing service, ANV dials-out to each of the
participants at a set time.

Business Model

Video conferencing

At present, the majority of revenues come from fixed line video conferencing to
multinational corporate customers with revenues dependent on usage. Whilst the
Proposed Directors believe this source of revenue will continue to grow
steadily, they expect significant revenue growth from ANV's 3G related mobile

Video call termination Services

Revenues from video call termination services are derived on a managed services
basis with MNOs.  The existing contract with Orange provides for a direct
flow-through of orders to ANV as a result of any increased demand for services
from the MNO. The MNO is contracted to purchase additional capacity from ANV as
a result of increased demand for video call termination. The automated nature of
these hosted services is such that there is a very low overhead cost associated
with these service level agreements. Currently, Orange provide revenue in the UK
and discussions and trials are currently ongoing with other operating
subsidiaries of the France Telecom group, as well as a number of other European

Video portal and other revenue sharing services

Video portal services are offered to consumers on a premium rate dial-up basis.
On accessing the content, the consumer is billed by the MNO, with whom ANV has a
revenue sharing agreement under which ANV receives an agreed percentage from the
MNO. From this share, ANV pays the content owner a set percentage. Typically,
ANV will receive 5 to 10 per cent for processing the call made by the consumer.
The Proposed Directors anticipate that revenues from these video portal
content-based services are set to grow significantly during the course of this
year as the MNOs make video short codes available to enable the widespread
launch of commercial services.

The Proposed Directors believe that the ANV business model has significant
upside given the growth in 3G mobile handsets, yet is low risk due to the
diverse customer base and range of services detailed above. The Proposed
Directors believe that the majority of ANV's revenue will derive from the
significant growth anticipated in the 3G market.


As a service provider, ANV develops services through the integration of
technology from multiple manufacturers.  As ANV is not dependent on any one
manufacturer, it is able to develop services in line with consumer demand,
rather than at the pace of one particular manufacturer.

ANV is currently developing its own software applications which will allow for
automated billing processes across multiple manufacturers' platforms and remote
administration and monitoring of their own content by customers.

There are three main components to ANV's technology:

Media Servers

ANV provides access to live content on media servers through 3G video calls as
opposed to streaming content. The key advantage of video on 3G is that it is
possible to allow two way interactive services.

ANV currently uses media servers from Dylogic S.r.l. ANV's media servers are
housed on COLT Telecommunications Limited's and Telstra Corporation Limited's
backbone networks in Europe.

Gateway Services

Currently, ANV uses Radvision gateways which allow calls initiated from 3G
mobile phones to connect to any IP device such as a fixed line video
conferencing system or media server. These media servers are able to store a
wide range of standards based digital video content including television

Equally, using ANV's gateways, it is possible to make a video call from an IP
device such as a PC equipped with a web cam on the internet through to a 3G
mobile phone.

Network Services

ANV has relationships with a number of MNOs. Due to the increase in traffic for
the existing service, the Proposed Directors anticipate that ANV will have
direct connections to major networks in the near future.

Sonic Acquisition

On 15 May 2005, ANV completed the acquisition of Sonic Telecom France SARL ('
Sonic').  Sonic supplies a hardware and firmware package known as the 'Sonic
Video Access Device'. This enables video calls to be routed on to the Sonic
network, which the Proposed Directors believe benefits the customer by
increasing the quality of the connection and reducing call costs. The Proposed
Directors believe the acquisition will generate additional profit for the ANV
group in addition to expanding global reach.


MNOs have invested over £22.5 billion to acquire UK 3G telephony licenses. In
Europe, £71 billion has been spent on 3G licences. Through the services
described above, ANV offers the MNOs the opportunity to increase average revenue
per user without the need for the MNOs to invest further in capital expenditure
to recoup their investment in 3G telephony licenses. The Proposed Directors
believe that the expected strong growth in the use of 3G mobile handsets will
result in a similar increase in the demand for video conferencing services
generally, from which ANV is well positioned to benefit.  The ANV Group also
intends to continue to grow its fixed line video conferencing business by
continuing to target large corporate customers.

Current trading and future prospects

The Proposed Directors believe that the ANV Group is well positioned to build on
its current customer base, as demonstrated by the growth in revenues and its
discussions with existing and potential customers detailed above.

The Proposed Directors believe that the ANV business model has significant
upside given the growth in 3G mobile handsets, yet is low risk due to the
diverse customer base and range of services detailed above. The Proposed
Directors believe that the majority of the enlarged group's revenue will derive
from the significant growth anticipated in the 3G market.


John Hawkins (aged 51) Proposed Non-Executive Chairman

John was CEO of Anite Group plc, a UK listed company, between 1997 and 2003.
During his tenure he turned the group from a £50m loss to a £19m profit. He was
previously chief executive officer of Graseby plc including at the time of its
disposal to Smiths Industries plc. John had previously been Global Head of
Multimedia for Philips Electronics and was instrumental in formulating the DVD
standard. John is also non-executive chairman of The Salamander group,
Easybroker Limited and Genus plc, a non-executive director of Psion plc and
chief executive of Atex Group Limited.

David Atkins (aged 38) Proposed Chief Executive

David founded ANV in 2002, having recognised the potential that video on mobile
phones could offer the business community. Previously, David jointly founded
VideoWeb Limited in 1997 and, as sales director, grew it rapidly to become the
second largest video conferencing business in Europe behind BT plc. The business
was sold to Genesys SA for a value of £6.7m in 1999. David will be responsible
for the overall management of the enlarged group's business and for overseeing
its strategic direction.

Chris Fairhall (aged 42) Proposed Chief Operating Officer

Chris joined ANV as Chief Operating Officer on 28 May 2005. Chris was one of the
first employees of VideoWeb Limited in 1997 and, following its acquisition by
Genesys SA was appointed chief operating officer of Genesys' Video Division in
November 2001. He successfully integrated video call centres in the UK, Germany,
Singapore, Australia and USA, maximising efficiencies in operating costs and
ensuring single operating systems and procedures.  Chris will be responsible for
the overall delivery of the enlarged group's operational plan.

Lee Woodland (aged 40) Proposed Chief Technical Officer

Lee has over 15 years telecoms experience in both the enterprise and service
provider sectors. Prior to joining ANV on 1 May 2005, Lee was involved with the
product development of Lucent Technologies' global messaging strategy. In that
role, Lee led the development of Lucent's 3G MMS and video messaging product
portfolio. Lee will be responsible for developing the product strategy for
future video products and services to enable the enlarged group to maintain its
competitive position in the video market.

Douglas Kearney (aged 50) Proposed Finance Director

Douglas, a member of the Institute of Chartered Accountants of Scotland, has
over 19 years' experience in private equity investments and finance functions
generally.  He worked for Charterhouse Development Capital and was a founding
director of Royal Bank Development Capital, which became one of the leading
private equity firms in the UK. Douglas has been involved in many successful
investments across a wide range of industries. Douglas currently acts as finance
director of SovGem Limited and Global Oceanic Carriers Limited (both AIM quoted
companies) and acts as a consultant to Springfords LLP Chartered Accountants and
Sovereign Group Partners LLP. Douglas will also be appointed Company Secretary
upon completion of the proposals.

Hugh de Lusignan (aged 44) Proposed Non-Executive Director

Hugh has over 20 years' experience in the public equity markets and was head of
UK Institutional Sales at NatWest Securities and head of Pan European Sales at
Societe Generale. Four years ago he was a founding partner of Sovereign Group
Partners LLP, an FSA regulated corporate finance house specialising in private
equity fund raising and which is an advisor to the Vendors, and is chief
executive officer of SovGem Limited

David Barton (aged 60) Non-Executive Director

David is a qualified Chartered Accountant (FCA).  After qualifying in 1969, he
decided to leave the profession to pursue a commercial career.  He has been
actively involved in numerous business sectors, which have included banking,
finance, property and service industries.  His current activities include being
non-executive chairman of Smart Voucher plc, Castor Investments plc and
Flexifoil International Limited.  He also acts as a non-executive director of
Ruffler Bank plc.


                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                                                                                                                  

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