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Gresham Tech (GHT)

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Friday 28 May, 2021

Gresham Tech

Proposed Acquisition, Placing and Retail Offer

RNS Number : 1156A
Gresham Technologies PLC
28 May 2021
 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR IMMEDIATE RELEASE.

NEITHER THIS ANNOUNCEMENT, NOR ANY COPY OF IT, MAY BE TAKEN OR TRANSMITTED, PUBLISHED OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR THE REPUBLIC OF SOUTH AFRICA OR TO ANY PERSONS IN ANY OF THOSE JURISDICTIONS OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT SECURITIES LAWS OF SUCH JURISDICTION. THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR CONTAIN ANY INVITATION, SOLICITATION, RECOMMENDATION, OFFER OR ADVICE TO ANY PERSON TO SUBSCRIBE FOR, OTHERWISE ACQUIRE OR DISPOSE OF ANY SECURITIES IN ANY JURISDICTION. NEITHER THIS ANNOUNCEMENT NOR THE FACT OF ITS DISTRIBUTION SHALL FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY INVESTMENT DECISION IN RESPECT OF GRESHAM TECHNOLOGIES PLC. PLEASE SEE THE IMPORTANT NOTICES AT THE END OF THIS ANNOUNCEMENT. THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (REGULATION (EU) 596/2014) (AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED)

28 May 2021

Gresham Technologies plc

Proposed Acquisition of Electra Information Systems, Inc., Proposed Placing and Retail Offer

Gresham Technologies plc (LSE: "GHT", "Gresham", "Company"), the leading software and services company that specialises in providing solutions for data integrity and control, banking integration, payments and cash management, announces that the Company and its wholly-owned subsidiary, Gresham Enterprise Storage, Inc., have entered into a conditional agreement (the "Stock Purchase Agreement") with the stockholders (the "Vendors") of Electra Information Systems, Inc. ("Electra"), a US-based provider of post-trade processing software solutions and services, to purchase the entirety of the issued and outstanding shares of common stock of Electra (the "Acquisition") on a debt free, cash free basis for a total cash consideration of up to US$38.6 million (£ 27.2 million) (the "Total Consideration"), comprising US$28.95 million (£ 20.4 million) in upfront consideration (the "Initial Consideration") and up to US$9.65 million (£ 6.8 million) (figures based on an exchange rate of GBP £1.00 = US$1.419) in deferred consideration (subject to the achievement of performance criteria).

The Initial Consideration is proposed to be funded using Gresham's existing cash resources and out of the net proceeds of a proposed placing of up to 12,500,000 new ordinary shares of 5 pence each ("Ordinary Shares") in the capital of the Company (the "Placing Shares"), principally to institutional investors (the "Placing") and an offer to be made on behalf of the Company by PrimaryBid Limited on its online PrimaryBid platform (the "Retail Offer") for up to 625,000 new Ordinary Shares (the "Retail Offer Shares", the Placing Shares and Retail Offer Shares together being, the "New Ordinary Shares").  

· The Acquisition represents a transformative opportunity to combine two complementary and high-quality businesses to drive meaningful earnings accretion and accelerate Gresham's earnings growth and quality of revenues.

· Electra, established over 20 years ago, is a leading provider of innovative solutions and services developed to improve efficiency and mitigate risk in post-trade processing, predominantly within the US financial services industry.

· Electra has high levels of recurring revenue, representing approximately 97% of its total revenue in the financial year to 31 December 2020 ("FY2020").

· In FY2020, Electra generated revenues, adjusted EBITDA and adjusted cash EBITDA of £10.1m, £2.4m and £0.9m respectively, representing a CAGR% between 2018 and 2020 of 4%, 19% and 50% respectively.

· The Acquisition is expected to be immediately significantly accretive to earnings (when adjusted for one-off exceptional charges, acquired amortisation, IFRS 16 lease charges and share-based payments), in the first part financial year of ownership (year ending 31 December 2021), and further accretive to earnings, on an adjusted basis, in the first full year of ownership (year ending 31 December 2022).

· The Acquisition will help the Company secure a leading position in the buy-side market segment and strengthen its US market presence.

· The total cash consideration is up to US$38.6 million (upfront consideration of US$28.95 million and up to US$9.65 million of deferred consideration, payable in two instalments subject to the achievement of performance criteria).

· The Acquisition is proposed to be funded out of Gresham's existing cash resources and through a placing of up to 12,500,000 New Ordinary Shares at a price of 160 pence per share with new and existing Shareholders to raise gross proceeds of £20 million and a retail offer of up to 625,000 New Ordinary Shares at a price of 160 pence per share to raise gross proceeds of up to £1 million.

· The proposed Placing is to be conducted by way of an accelerated bookbuild process undertaken on behalf of the Company by Nplus1 Singer Capital Markets Limited (together with its affiliate entities) ("N+1 Singer") which will be launched immediately following this announcement in accordance with the Terms and Conditions set out herein (the "Bookbuild") . The Bookbuild is open with immediate effect.

· All of the directors of the Company (the "D irectors " ) have indicated their intention to subscribe for Ordinary Shares in the Placing. Further details will be provided in the announcement of the results of the Placing and Retail Offer.

· A US$15 million multicurrency revolving credit and US$10 million accordion loan facility has been entered into with Bank of Ireland and may be drawn down upon to satisfy any payments of the deferred consideration to be made pursuant to the Stock Purchase Agreement.

· The Acquisition is a Class 1 transaction under the Listing Rules of the Financial Conduct Authority (the " Listing Rules ") . Accordingly, the Acquisition and the Placing are each conditional on the approval of Shareholders in general meeting. The Retail Offer is also conditional, inter alia, upon completion of the Placing.

 

The Total Consideration will be satisfied through the payment on the closing of the Acquisition ("Completion") of the Initial Consideration of US$28.95 million (£20.4 million) and up to US$9.65 million (£ 6.8 million) in deferred consideration, payable in two equal instalments, subject to the achievement of performance criteria referable to the recurring revenues of Electra, after the first and second anniversaries of Completion.

The Company proposes to fund the Initial Consideration and its associated costs through its existing cash resources, a proposed placing of the Placing Shares to institutional investors and the Directors and an offer of the Retail Offer Shares to be made on behalf of the Company on the online PrimaryBid.com platform.

The Placing will be conducted through the Bookbuild which will be launched immediately following this announcement. A separate announcement regarding the Retail Offer and its terms will be made shortly.

The Company intends to raise up to £21.0 million, before expenses, through the Placing and the Retail Offer. The total number of New Ordinary Shares to be issued under the Placing and the Retail Offer will not exceed 13,125,000 New Ordinary Shares, representing approximately 18.7 % of the Company's existing issued share capital.

The Placing Shares and Retail Offer Shares will be issued at a price of 160 pence per share (the "Issue Price"), which does not represent any discount to the closing mid-market price of the Ordinary Shares of 160 pence on 27 May 2021, being the latest practicable date prior to this announcement.

The Placing is subject to the terms and conditions set out in the Appendix to this announcement (which forms part of this announcement, such announcement and the Appendix together being this "Announcement"). The Retail Offer will not be made subject to the terms and conditions set out in the Appendix but will instead be made on the terms outlined in the separate announcement to be made shortly.

Nplus1 Singer Capital Markets Limited is acting as sole bookrunner (the "Bookrunner") in respect of the Placing.

Prior to launch of the Placing, the Company consulted with a number of its institutional Shareholders to gauge their feedback as to the terms of the Acquisition, the Placing and the Retail Offer. Feedback from this consultation was supportive and, as a result, the Board has chosen to proceed with the Placing and the Retail Offer to finance the Initial Consideration through an equity raise and using its existing cash resources without first offering Ordinary Shares to existing Shareholders. The Directors believe that the additional costs that would have been incurred, both financially and in terms of management time, if the Company were to have offered all Shareholders the opportunity to acquire Ordinary Shares (for example, via an open offer or a rights issue), are such that a non-pre-emptive share issue to a limited number of institutional and other investors is a more appropriate method of raising finance for the purposes of the Acquisition. The Placing is therefore being structured as an accelerated bookbuild to minimise execution and market risk and has not (as is also the case with the Retail Offer) been underwritten. 

The Acquisition, which is expected to be immediately significantly earnings accretive, constitutes a Class 1 transaction under the Listing Rules. Accordingly, the Acquisition and the Placing are each subject , inter alia, to the approval of the Company's shareholders, which is to be sought at a general meeting to be held prior to Completion (the "General Meeting"). The Retail Offer will itself also be conditional upon completion of the Placing. A circular setting out full details of the Acquisition, Placing and Retail Offer (the "Shareholder Circular") and also containing a Notice of the General Meeting will be sent to Shareholders in due course.

The Company and its subsidiary, Gresham Technologies (International) Limited ( " Gresham International " ) , have also entered into a new US$15 million multicurrency revolving credit and US$10 million accordion loan facility with Bank of Ireland (the "New Loan Facility"). Amounts borrowed under the New Loan Facility may, conditional on completion of the Placing, be used to finance the consideration payable in respect of the Acquisition, for any associated fees, costs, taxes and expenses, for the refinancing of certain financial indebtedness incurred in relation to other acquisitions permitted under the terms of the facility and for the general corporate and working capital purposes of the Group or (as the case may be) the Enlarged Group. The New Loan Facility may be used to finance any deferred consideration which becomes payable to the Vendors under the Stock Purchase Agreement. Drawdown of any advances under the New Loan Facility will be subject to the satisfaction of certain conditions precedent which are standard for an acquisition facility but which include (among others) the entry into certain security documents and confirmation that the Company has received, or is contractually entitled to receive, net proceeds of at least £18 million from the Placing.  The maturity date of the New Loan Facility is its third anniversary but the facility also contains two extension options under which the Company may give notice to Bank of Ireland that it wishes (at the lender's discretion) to extend the maturity date of the New Loan Facility by additional periods, each of one year.

 

A further announcement will be made on the closing of the Placing and the Retail Offer, which is expected to occur later today.

This Announcement should be read in its entirety. In particular, your attention is drawn to (i) the section headed 'Risk Factors' below and (ii) the detailed terms and conditions of the Placing and further information relating to the Placing and any participation in the Placing that is described in the Appendix.

By choosing to participate in the Placing, and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this Announcement in its entirety (including the Appendix), and to be making such offer on the terms and subject to the conditions of the Placing contained herein, and to be providing the representations, warranties and acknowledgements contained in the Appendix.

The person responsible for making this Announcement on behalf of the Company is Jonathan Cathie, Company Secretary.

 

Gresham Technologies plc

+44 (0) 207 653 0200

Ian Manocha


Tom Mullan




N+1 Singer (Financial Adviser and Broker)

+44 (0) 207 496 3000

Shaun Dobson / Tom Salvesen/ Jen Boorer / Iqra Amin






 

Note to editors

Gresham Technologies plc is a leading software and services company that specialises in providing real-time solutions for data integrity and control, banking integration, payments and cash management. Listed on the main market of the London Stock Exchange (GHT.L) and headquartered in the City of London, its customers include some of the world's largest financial institutions and corporates, all of whom are served locally from offices located in the UK, Europe, North America and Asia Pacific.

Gresham's award-winning Clareti software platform is a highly flexible and scalable platform, available on-site or in the cloud, designed to address today's most challenging financial control, risk management, data governance and regulatory compliance problems. Learn more at www.greshamtech.com .

 

 

Expected Timetable of Events


2021

Announcements of the Placing, Retail Offer and Acquisition

28 May

Publication and posting of the Shareholder Circular, the Notice of General Meeting and the Form of Proxy to Shareholders

1 June

Latest time and date for receipt of proxy votes and CREST Proxy Instructions

10:00 a.m. on 17 June

General Meeting

10:00 a.m. on 21 June

Expected date of completion of the Acquisition (subject to the conditions thereto being satisfied or (where permitted) waived)

22 June

Expected date of Admission and commencement of dealings in the Placing Shares and Retail Offer Shares

8:00 a.m. on 22 June

CREST accounts credited with Placing Shares and Retail Offer Shares

22 June

Expected date by which any definitive share certificates for the Placing Shares and Retail Offer Shares are to be despatched

29 June



 

 

IMPORTANT NOTICES FOR INVITED PLACEES ONLY REGARDING THE PLACING SHARES

Neither this Announcement (including the Appendix and the information contained in it), nor any copy of it, may be taken or transmitted, published or distributed, directly or indirectly, in whole or in part, in or into the United States, Australia, Canada, Japan, New Zealand or the Republic of South Africa or to any persons in any of those jurisdictions or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction (each, a "Restricted Jurisdiction"). This Announcement is for information purposes only and neither it, nor the information contained in it, shall constitute an offer to sell or issue, or the solicitation of an offer to buy, acquire or subscribe for any shares in the capital of the Company in the United States, Australia, Canada, Japan, New Zealand or the Republic of South Africa or any other state or jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation.  Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. 

The Placing Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or with any securities regulatory authority or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold, pledged, transferred or delivered, directly or indirectly, in or into the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with the securities laws of any state or other jurisdiction of the United States.

No action has been taken by the Company, N+1 Capital Markets and/or N+1 Advisory or any of their respective directors, officers, partners, agents, employees, affiliates, advisors, consultants or, in the case of N+1 Singer, persons connected with them as defined in the Financial Services and Markets Act 2000, as amended ("FSMA") (together, "Affiliates") that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other publicity material relating to such Placing Shares in any jurisdiction where any action for that purpose is required. Persons receiving this Announcement are required to inform themselves about and to observe any restrictions contained in this Announcement.

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

This Announcement has not been approved by the Financial Conduct Authority ("FCA") or the London Stock Exchange.

Members of the public are not eligible to take part in the Placing.  No offering document or prospectus will be made available in connection with the matters contained or referred to in this Announcement and no such offering document or prospectus is required to be published, in accordance with Regulation (EU) 2017/1129 (the "Prospectus Regulation") or Regulation (EU) 2017/1129, as amended and retained in UK law on 31 December 2020 by the European Union (Withdrawal) Act 2018 (the "EUWA") (the "UK Prospectus Regulation").

This Announcement is not being distributed by, nor has it been approved for the purposes of section 21 of FSMA by, a person authorised under FSMA. This Announcement is being distributed and communicated to persons in the United Kingdom only in circumstances in which section 21(1) of FSMA does not require approval of the communication by an authorised person.

This Announcement has been issued by, and is the sole responsibility of, the Company. No responsibility or liability is or will be accepted by, and no undertaking, representation or warranty or other assurance, express or implied, is or will be made or given by either of N+1 Capital Markets and/or N+1 Advisory, or by any of their respective Affiliates as to, or in relation to, the accuracy, fairness or completeness of the information or opinions contained in this Announcement or any other written or oral information made available to or publicly available to any interested person or its advisers, and any liability therefor is expressly disclaimed. The information in this Announcement is subject to change.

None of the information in this Announcement has been independently verified or approved by either of N+1 Capital Markets, N+1 Advisory or any of their Affiliates. Save for any responsibilities or liabilities, if any, imposed on N+1 Capital Markets and/or N+1 Advisory by FSMA or by the regulatory regime established under it, no responsibility or liability whatsoever whether arising in tort, contract or otherwise, is accepted by either of N+1 Capital Markets or N+1 Advisory or any of their respective Affiliates whatsoever for the contents of the information contained in this Announcement (including, but not limited to, any errors, omissions or inaccuracies in the information or any opinions) or for any other statement made or purported to be made by or on behalf of N+1 Capital Markets and/or N+1 Advisory or any of their respective Affiliates in connection with the Company, the Placing Shares or the Placing or for any loss, cost or damage suffered or incurred howsoever arising, directly or indirectly, from any use of this Announcement or its contents or otherwise in connection with this Announcement or from any acts or omissions of the Company in relation to the Placing. Each of N+1 Capital Markets and N+1 Advisory and their respective Affiliates accordingly disclaim all and any responsibility and liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above) in respect of any statements or other information contained in this Announcement and no representation or warranty, express or implied, is made by either of N+1 Capital Markets, N+1 Advisory or any of their respective Affiliates as to the accuracy, completeness or sufficiency of the information contained in this Announcement.

N+1 Singer, which is authorised and regulated in the United Kingdom by the FCA, is acting solely for the Company and no-one else in connection with the Placing and the transactions and arrangements described in this Announcement and will not regard any other person (whether or not a recipient of this Announcement) as a client in relation to the Placing or the transactions and arrangements described in this Announcement. N+1 Singer is not responsible to anyone other than the Company for providing the protections afforded to clients of N+1 Singer or for providing advice in connection with the contents of this Announcement, the Placing or the transactions and arrangements described herein.

Certain statements in this Announcement are forward-looking statements, which include all statements other than statements of historical fact and which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements may use words such as "aim", "anticipate", "believe", "could", "may", "intend", "estimate", "expect" and words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company, including amongst other things, United Kingdom domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, the effect of competition, inflation, deflation, the timing effect and other uncertainties of future acquisitions or combinations within relevant industries, the effect of tax and other legislation and other regulations in the jurisdictions in which the Company and its affiliates operate, the effect of volatility in the equity, capital and credit markets on the Company's profitability and its ability to access capital and credit, a decline in the Company's credit rating, the effect of operational risks and the loss of key personnel. As a result, the actual results of operations, financial condition and performance of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. These statements are not guarantees of future performance and, given the risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by the FCA, the London Stock Exchange or applicable law, the Company, N+1 Capital Markets, N+1 Advisory and their respective Affiliates undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

No statement in this Announcement is intended to be a profit forecast and no statement in this Announcement should be interpreted to mean that the 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.

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 N+1 Capital Markets or N+1 Advisory. This Announcement is not intended to provide the basis for any decision in respect of the Company or other evaluation of any securities of the Company or any other entity and should not be considered as a recommendation that any investor should subscribe for, purchase, otherwise acquire, sell or otherwise dispose of any such securities. Recipients of this Announcement who are considering acquiring Placing Shares pursuant to the Placing are reminded that they should conduct their own investigation, evaluation and analysis of the information contained in this Announcement.  Any indication in this Announcement of the price at which the Company's shares have been bought or sold in the past cannot be relied upon as a guide to future performance. The price and value of securities can go down as well as up.

The contents of this Announcement are not to be construed as legal, business, financial or tax advice. Each Shareholder or prospective investor should consult with his or her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice.

In connection with the Placing, N+1 Capital Markets and/or N+1 Advisory and any of their respective Affiliates, acting as investors for their own account, may take up a portion of the Placing Shares in the Placing as a principal position and in that capacity may retain, purchase, sell, offer to sell for their own account or otherwise deal for their own account in such Placing Shares and other securities of the Company or related investments in connection with the Placing or otherwise. Accordingly, references to Placing Shares being offered, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or acquisition, placing or dealing by, N+1 Singer and any of their respective Affiliates acting in such capacity. In addition, N+1 Capital Markets and/or N+1 Advisory and any of their respective Affiliates may enter into financing arrangements (including swaps, warrants or contracts for difference) with investors in connection with which N+1 Capital Markets and/or N+1 Advisory and any of their respective Affiliates may from time to time acquire, hold or dispose of shares. N+1 Singer do not intend to disclose the extent of any such investment or transaction otherwise than in accordance with any legal or regulatory obligations to do so.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the Main Market of the London Stock Exchange in accordance with the Listing Rules.

The Appendix to this Announcement sets out the terms and conditions of the Placing. Persons participating in the Placing, by making an oral or written offer to subscribe for Placing Shares, will be deemed to have read and understood this Announcement in its entirety and to be making such offer to acquire Placing Shares on the terms and subject to the conditions set out in this Announcement and to be providing the representations, warranties, undertakings and acknowledgements contained in the Appendix.

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

UK Product Governance Requirements

Solely for the purposes of the product governance requirements contained within the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK Product Governance Rules"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any 'manufacturer' (for the purposes of the UK Product Governance Rules) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of (a) retail clients, as defined in point (8) of Article 2 of Regulation (EU) No 2017/565 as it forms part of domestic law by virtue of the EUWA, (b) investors who meet the criteria of professional clients as defined in Regulation (EU) No 600/2014 as it forms part of domestic law by virtue of the EUWA and (c) eligible counterparties, each as defined in chapter 3 of the FCA Handbook Conduct of Business Sourcebook ("COBS"); and (ii) eligible for distribution through all distribution channels as are permitted by Directive 2014/65/EU (the "UK Target Market Assessment"). Notwithstanding the UK Target Market Assessment, distributors 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 the 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 UK 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 UK Target Market Assessment, the Bookrunner will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the UK Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of COBS; 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.

EU Product Governance Requirements

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (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 the Placing Shares are: (i) compatible with an end target market of retail clients 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 "EU Target Market Assessment"). Notwithstanding the EU Target Market Assessment, distributors 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 the 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 EU 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 EU Target Market Assessment, the Bookrunner will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the EU Target Market Assessment does not constitute: (a) an assessment of suitability or 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.

 

1.  Background to and reasons for the Acquisition

1.1 Information on Gresham

Gresham is a leading software and services company that specialises in providing real-time solutions for reconciliation, data integrity and control, regulatory reporting and cash management and payments. Listed on the Main Market of the London Stock Exchange (GHT.L) and headquartered in the City of London, its customers include some of the world's largest financial institutions and corporates, all of whom are served locally from offices located in the UK, Europe, North America and Asia Pacific.

Gresham has over 120 customers and over 150 employees worldwide. In the last five years, Gresham has completed three acquisitions comprising C24 Technologies in 2016, B2 Group in 2018 and Inforalgo Information Technology ( " Inforalgo " ) in 2020, all of which have been successfully integrated and absorbed into Gresham's global technology and operating model.

The Group is organised for internal management purposes into the three following reporting segments:

· Clareti Solutions - this addresses the supply of solutions predominantly to the finance and banking markets across Asia Pacific, Europe, the Middle East and Africa and North America and includes both software and services that can be accessed in the cloud, on-premise or deployed into hybrid environments. The primary offerings within this segment comprise:

 

· Clareti Control products

 

A leading enterprise-grade business self-service platform for the reconciliation and control of "any and all" transaction data in financial markets.

With these products, Gresham seeks to disrupt markets typically dominated by legacy vendors whose inflexible technology often fails to achieve more granular and real-time data control and to replace in-house systems and manual processes.

These products are sold to customers as applications for specific use cases and include Clareti Transaction Control, Clareti Cash Control, Clareti Securities Control and Clareti Regulatory Control.

 

· Clareti Connect products

 

This is an innovative service that enables customers to participate in the complex inter-connected global financial system without needing to be concerned with integration risk, cost and time to market.

These products enable institutions to seamlessly connect their banking, payments, trading, accounting and regulatory systems and their external partners with intelligent straight-through-processing in a way that is reliable and cost effective.

Products are sold primarily as a cloud service bringing together tools and software libraries built or acquired by Gresham into a rich menu of industry connectivity and data transformation services.

 

· Other Solutions - this segment comprises the supply and/or support and maintenance of a range of well-established solutions to large or enterprise-level customers in a variety of end markets.

 

· Contracting Services - this segment involves the supply of IT contracting services to just one banking customer, ANZ.

1.2 Strategy

Gresham's strategy is to develop and sell innovative software solutions to address data problems endemic in the financial services industry in order to drive profitable growth and create long-term Shareholder value. To achieve this, Gresham has adopted the following specific strategies:

· Build a high-margin, recurring revenue stream based on Clareti software and cloud services:

In 2020, Gresham increased Clareti annualised recurring revenues by 29 per cent. despite the challenging prevailing conditions, and completed its transition of all new Clareti customers to subscription-based licensing.

· Create a valuable financial technology business through Clareti-led growth and complementary acquisitions:

Gresham also added several key accounts, delivered important customer implementations that increased its addressable market and completed the acquisition of Inforalgo which added valuable cloud connectivity technology to the Clareti portfolio.

· Establish Clareti as the enterprise data integrity platform "category leader":

Gresham won the Waters Technology award for Best Buy-Side Reconciliation Platform in 2020 and ran several successful marketing campaigns to promote Gresham's brand and offerings to its target market.

· Focus product investment on innovative Clareti solutions for chosen markets:

Gresham delivered new, market-differentiating features and capabilities in 2020 to solve well-defined market problems. It also adopted new technologies to increase the re-usability of IP assets across solutions.

· Retain strategic non-Clareti revenues to support Clareti-led growth:

Non-Clareti revenues are operated at high-margin and support the Group's profitability despite high levels of investment in Clareti. In 2020, non-Clareti revenues were ahead of the Board's original expectations.

Further details on Gresham's strategy and business model can be found in its 2020 Annual Financial Report.

1.3 Rationale for the Acquisition

Compelling and immediate financial impact

The Acquisition is expected to be immediately significantly accretive to earnings, on an adjusted(1) basis, in the first part financial year of ownership (year ending 31 December 2021), and further accretive to earnings, on an adjusted(1) basis, in the first full year of ownership (year ending 31 December 2022). The Board estimates that, following Completion, the Enlarged Group will be able to achieve synergies through reductions in senior leadership costs. However, the Board notes that in the short term, these cost savings will be predominantly offset by a higher annual operating cost base of the Enlarged Group resulting from investments to be made into central functions in order to align Electra with Gresham's global operating platform, corporate governance procedures and reporting requirements.

In the medium to longer term, it is anticipated that further benefits will be achieved, through efficiencies in product development (including access for the Enlarged Group to a greater range of re-usable IP assets) and customer support as future investments are made on a combined basis, utilising an enlarged and more global resource pool, and by centralising core functions. These longer-term benefits have not been modelled in Gresham's baseline investment case.

(1)   Adjusted for one-off exceptional charges, acquired amortisation, IFRS 16 lease charges and share-based payments.

Acceleration of earnings growth and earnings quality

Electra is a profitable and growing business. Since inception, Electra has had the strategic advantage of being able to secure growth primarily in its large, homogeneous local U.S. market. As a result, it has achieved deep penetration and now benefits from a higher level of cash profitability compared to the Gresham Group's more internationally distributed Clareti business.

In each of the financial years ended 31 December 2019 and 31 December 2020, Electra delivered approximately 4 per cent. of revenue growth and 13 per cent. and 9 per cent. of recurring revenue growth respectively. As with many other comparable businesses, Electra experienced a slowdown in recurring revenue growth in FY2020 as a result of COVID-19, but growth rates are expected to increase in FY2021. Whilst Electra experienced a slight drop in margins in FY2019 as its migration from a perpetual to a subscription-based licensing business was completed, FY2020 saw a strong improvement and was well-ahead of FY2018, with a 15 per cent. and 24 per cent. adjusted EBITDA margin and a 3 per cent. and 9 per cent. adjusted cash EBITDA margin being achieved in FY2019 and FY2020 respectively. On a standalone basis, as previously reported, Gresham's Clareti business is tracking towards cash EBITDA profitability being achieved on a full-year basis during FY2022. The acquisition of Electra will accelerate the combined cash EBITDA break-even point which is now expected to be achieved in the first 12 months post-Acquisition.

Based purely on an aggregation of Gresham's and Electra's respective businesses, forward looking annual recurring revenues ("ARR") totalled £24.6 million as at 31 December 2020. For FY2020, on a standalone basis, Gresham's high growth, strategically important Clareti business represented 63 per cent. of Group revenues of £24.8 million. On an aggregated basis, revenues from the combined Clareti and Electra businesses represented 73 per cent. of total Gresham Group and Electra revenues of £35.0 million. This transformation will completely remove the Group's long-standing dependency on its legacy businesses which have been in structural decline for the last decade.

In recent years, Electra has successfully made the transition to a subscription-based licensing model and benefits from high levels of customer retention. Electra also targets the attractive capital markets industry segment that has been the primary engine of growth for Gresham. The Acquisition will more than double the Enlarged Group's customer numbers, thereby improving the likely resilience of its revenues and reducing customer concentration risk. Based upon an aggregation of the FY2020 combined Clareti and Electra results, the Acquisition will also increase Clareti recurring revenues by 85 per cent. and further improve the Enlarged Group's quality of earnings.

Strengthening position in the United States

The United States is the largest homogeneous market for capital markets technology in the world, with North America accounting for approximately 50 per cent. of the global asset management industry. Success in the U.S. market is, therefore, believed by the Board to be key to the Company's long-term aspirations.

Since winning its first Clareti sale in the U.S. in 2015, Gresham's customer base in North America has grown steadily through organic direct sales and acquisitions, most recently of Inforalgo and, prior to that in 2016, C24 Technologies. As at 31 December 2020, 29 per cent. of Clareti ARR came from customers in North America; combined with Electra, this becomes 57 per cent. Gresham's current physical presence there is limited to eight staff and further investment is required into sales, delivery, cloud and customer support to take advantage of the market opportunity.

Combining Gresham's and Electra's respective U.S. customer-facing operations is expected to extend sales reach and deliver economies of scale in other functions. Furthermore, there is anticipated to be substantial opportunity for growth within the Enlarged Group's customer base through product cross-sell.

Notwithstanding the competitive nature of the businesses' respective reconciliation solutions, there is pleasingly only a limited overlap in the customer bases of Gresham and Electra. As a result, the combined Clareti and Electra customer base of the Enlarged Group will comprise over 190 organisations in North America upon Completion and a total combined customer count in excess of 270. In terms of market share, Gresham will become a leading independent provider of reconciliation software to the U.S. buy-side community. The Acquisition represents an exciting opportunity to underpin Gresham's beachhead operation in the U.S. and secure a market leadership position which would otherwise be likely to take several years to establish.

Increase share of wallet with buy-side customers

Investment management firms are increasingly seeking to reduce their operating costs and gain greater automation, transparency and control over their operations. Buy-side firms see robust core reconciliations of cash, positions, transactions and NAV calculations as a fundamental business need and are prepared to invest to remove manual dependencies from the process. They are also seeking to achieve integration across front, middle and back offices, driving a need for inter-systems controls. In parallel, they are seeking to simplify and integrate their technology and data estate by consolidating their technology partners and accelerating their move to cloud. Firms are increasingly open to working with partners to provide outsourced services in specialist areas such as data management, reconciliations, compliance and reporting.

Electra's primary product strengths are in core reconciliation software and data aggregation services. By contrast, Gresham's competitive advantage is in more complex inter-systems reconciliations, regulatory reporting and control, payments integration and other connectivity solutions. Both organisations also have relatively new cloud hosting and managed services capabilities. Bringing these products and services together will enable Gresham to provide more complete, higher value, automation solutions thereby competing more effectively against platform providers and providing strong differentiation against point solution providers.

Provides global operating scale

Despite steady rates of year-on-year organic recurring revenue growth, both Gresham and Electra remain relatively small players competing in the global enterprise financial technology market. It is Gresham's aspiration to build a global company of substantial scale and to become a significant next generation player in the market and a known and respected brand.

Whilst the success of the Clareti-led growth strategy over the last few years has enabled the Gresham Group to become cash generative, the Clareti business itself is not yet standalone cash profitable. The business has matured from the pioneering days of the Clareti start-up; by the end of 2020, Clareti annualised recurring revenue had grown to £12.3 million and the Group had over 120 Clareti customers. The Company has invested to build out global distribution, service delivery and customer support platforms, as well as investing into the product innovations, cloud infrastructure and managed services solutions required by the market.

Whilst no longer a start-up, as a small scale-up business, Gresham has yet to achieve the target levels of operational gearing and cash generation expected of a mature enterprise software company. In acquiring Electra, a company with a similar business model, target market and strategic purpose, Gresham will significantly increase its recurring software revenues. The Enlarged Group will have approximately 200 employees servicing over 270 customers in over 15 countries around the world. This revenue and platform scale will take the Enlarged Group into a new stage in its growth journey. Gresham will become a larger small company with its sights firmly set on becoming a smaller large company within the next five years.

In the Board's view, the Acquisition is aligned with Gresham's strategic plan and seeks to maximise value for Shareholders, with the Company being well placed to pursue its strategy of profitable growth.

2.  Financial effects of the Acquisition

Electra is being acquired for a total consideration, to be satisfied entirely in cash, of up to US$38.6 million, comprising US$28.95 million in upfront consideration and up to US$9.65 million in deferred consideration payable in two instalments (of up to US$4.825 million respectively) to be made (subject to the achievement of performance criteria) after the first and second anniversaries of Completion on a debt free, cash free basis.

For the year ended 31 December 2020, Electra delivered audited revenue of £10.1 million, audited adjusted EBITDA of £2.4 million, audited adjusted cash EBITDA of £0.9 million and an audited profit before tax of £0.4 million.

The Board remains confident in the structural growth opportunities of Electra's target markets as well as, in the short term, the ability to maintain the recurring revenue growth demonstrated by Electra over the historical period and to at least maintain its existing margins. As a result, in the mid to long-term following completion of the Acquisition, the Directors expect there to be the potential to further enhance Electra's growth rates and margins.

The Company and Gresham International have entered into a new US$15 million multicurrency revolving credit and US$10 million accordion loan facility with Bank of Ireland. It is not anticipated that the New Loan Facility will be used to fund any of the initial consideration payable in respect of the Acquisition but drawdowns may be made under the facility in respect of any further payments by Gresham Enterprise of the deferred consideration which may become due to the Vendors under the Stock Purchase Agreement.

3.  Information on Electra

Electra is a leading, innovative provider of software solutions and services for post-trade processing including reconciliation, data collection and transformation, trade settlement and client fee billing for the financial services industry, primarily targeted at buy-side firms. Electra was founded in 1998 by John Landry, amongst others, who holds the controlling interest in its issued and outstanding shares of common stock and currently operates as its Chief Executive Officer. Electra is headquartered in New York, USA and has approximately 50 employees. With over 150 customers globally, Electra has a low customer concentration with its largest customer comprising approximately 6 per cent. of its annualised recurring revenue of £8.8 million as at 31 December 2020. Electra's customer base includes institutional investment managers, hedge funds, insurance companies, fund administrators and plan sponsors.

Electra's strategy is to deliver best-in-class solutions that mitigate risk, cost and inefficiencies prevalent across the post-trade process, selling primarily to buy-side firms and service providers who have relatively standardised requirements. Electra's business model seeks to deliver solutions to its customers primarily in a Software-as-a-Service (SaaS) environment, which Electra hosts in third-party cloud platforms with revenue based on number of seats and/or data volumes. Revenues are also derived from licensed software with respect to on-premise deployments that the customer manages themselves, and its offerings are augmented with managed services.

Electra's products are comprised as follows:

· Electra Reconciliation is a solution designed specifically for the asset management industry, helping buy-side firms and service providers mitigate risk, cost and inefficiencies across reconciliation, exception management and the post-trade process, and eliminate labour processes. The product, which contains patented technology, integrates and compares data across departments, in order to expedite exceptions management and allow customers to review exceptions activity, understand the causes and impact of exceptions and enable immediate exception resolutions.

· Electra Data provides customers with a fully outsourced data collection, validation and aggregation service. The product includes a data dashboard to allow for summarised viewing and detailed status information in real time. It consolidates securities, cash position, transaction and research information from third parties and then reformats the data so it can be integrated with a customer's system specifications and its business applications.

· Electra Settlements is an application that allows the post-trade settlement process to be fully automated by consolidating post-trade processing into a single system and dashboard for automating wire instructions. Data is automatically sent to counterparties and can be customised to eliminate manual workflows. It mitigates settlement risk by accelerating trade affirmations.

· Electra Billing allows investment firms to calculate fees and invoice clients based on criteria such as assets under management and performance fees. It allows for complex approval workflows and audit trails for these core processes.

· Electra Managed Services provides an add-on outsourcing service for specific reconciliation and data collection processes which can be tailored to a customer's requirements.

· Electra FailSafe is a risk management system designed to aggregate and display pending trades, highlight trades at risk of failing, expose failed trades and present the information on a secure web interface. The system enables the creation of alerts and provides an audit trail for specific trades.

Electra Reconciliation and Electra Data are considered to be the lead offerings and together accounted for approximately 96 per cent. of Electra's recurring revenues as at 31 December 2020.

Summary financial information on Electra Information Systems, Inc.


Year ended

31December

Year ended

31December

Year ended

31December

2018

2019

2020

£'000

£'000

£'000

Revenue

9,257

9,732

10,121

Gross profit

6,879

7,226

7,505

Operating profit

873

336

503

Profit before tax

810

280

443

Gross Assets

5,135

5,493

6,407

Net Assets

2,728

3,075

3,353

 

Over the historical reporting period, Electra's sales increased from approximately £9.3 million in FY2018 to approximately £10.1 million (2) in FY2020, a CAGR of 4 per cent. This increase was predominantly driven by a growth in recurring revenues which experienced a CAGR of 10 per cent. over the reporting period. In FY2020, 97 per cent. of revenue was recurring and the gross revenue retention rate was in excess of 92 per cent. Gross margin was stable at approximately 74 per cent. throughout the reporting period. Adjusted EBITDA and adjusted cash EBITDA respectively increased from approximately £1.7 million and £0.4 million in FY2018 to approximately £2.4 million and £0.9 million in FY2020. This resulted in an adjusted EBITDA CAGR of 19 per cent. and a cash EBITDA CAGR of 50 per cent. over the historical reporting period to FY2020. As at 31 December 2020, the gross assets of Electra totalled £6.4 million and forward looking ARR totalled £8.8 million (3) . Of this sum, Electra Reconciliation and Electra Data represented annualised recurring revenues of approximately £5.0 million and £3.6 million respectively.

(2) In alignment with IFRS, all of Electra's income statement transactions have been translated from US$, the significant base currency, to £ using average rates across the relevant reporting periods and all of its balance sheet transactions have been translated as at the closing rates prevailing in respect of each such period. 

 

(3) Forward looking ARR is not an IFRS measure, but has been translated as at the closing rates prevailing in respect of that period.

 

4.  Summary of the terms of the Acquisition

The Acquisition is being made pursuant to the terms of the Stock Purchase Agreement. Under the Stock Purchase Agreement, Gresham Enterprise has agreed, subject to certain conditions, to purchase all of the issued and outstanding shares of common stock of Electra for a consideration of up to US$38.6 million on a debt free, cash free basis, of which US$28.95 million will be payable in cash on Completion, subject to customary adjustments based on the working capital levels of Electra as at that date. Further cash consideration of up to US$9.65 million will then be payable to the Vendors by reference to the levels of recurring revenue achieved by Electra in the first two years of its ownership by Gresham, such sum being paid in two separate instalments (of up to US$4.825 million respectively, subject to downwards adjustment in proportion to the extent to which target recurring revenues are not achieved) to be made after the first and second anniversaries of Completion.

Pursuant to the Stock Purchase Agreement, the Vendors have each given customary representations, warranties, covenants and indemnities to Gresham Enterprise with regard to Electra as well as regarding the conduct of Electra's business during the period up to Completion.

Completion of the Acquisition is conditional upon the satisfaction (or waiver, where applicable) of the following conditions (among others):

· approval by Shareholders at the General Meeting of the Acquisition (as a Class 1 transaction under the Listing Rules) and of a further Resolution required under the Companies Act to allow the Directors to allot and issue the Placing Shares without first offering them to existing Shareholders;

· the representations and warranties of Electra and the Vendors contained in the Stock Purchase Agreement continuing, subject to certain exceptions, to be true and correct as of the Completion Date;

· consummation of the transactions contemplated by the Stock Purchase Agreement being permitted by applicable law and there being no order issued by any court of competent jurisdiction or other legal or regulatory restraint or prohibition limiting or restricting the consummation of the transactions contemplated by the agreement or Gresham Enterprise's ownership, conduct or operation of Electra's business following Completion;

· no defined material adverse effect having occurred; and

· immediately after the passing of the applicable Resolutions, the Placing Shares having been unconditionally allotted and issued by the Company, the Placing Agreement not having been terminated and having become and remaining unconditional in all respects and, immediately following Completion having taken place, Admission of the Placing Shares then occurring.

The Stock Purchase Agreement contains various termination rights, including in the event that the applicable Resolutions are not approved by Shareholders at the General Meeting or if there is a material breach of any of the representations, warranties, covenants or agreements given by the parties in the Stock Purchase Agreement which would give rise to the failure of any of the conditions to Completion.

The Board expects that, subject to the satisfaction and/or waiver (where applicable) of these Conditions, Completion will occur on or around 22 June 2021.

5.  Financing of the Acquisition

The cash consideration payable for the Acquisition on Completion is US$28.95 million. The Group proposes to finance this amount using the net proceeds of the Placing and Retail Offer (after taking into account expenses related thereto and in respect of the Acquisition) with the remainder being funded from the Group's existing cash resources.

Details of the Placing and the Retail Offer

The Company is proposing to raise £20 million pursuant to the Placing and up to £1 million pursuant to the Retail Offer (in each case, before expenses) to fund part of the upfront consideration due in respect of the Acquisition, together with associated transaction costs.

The Issue Price of 160 pence per New Ordinary Share which does not represent any discount to the closing mid-market price of an Existing Ordinary Share of 160 pence on 27 May 2021 (being the latest practicable date prior to this Announcement).

Prior to launch of the Placing and Retail Offer, the Company consulted with a number of its institutional Shareholders to gauge their feedback as to the terms of the Transaction. Feedback from this consultation was supportive and, as a result, the Board has chosen to proceed with the Placing and Retail Offer to finance the initial consideration payable in respect of the Acquisition through an equity raise and using its existing cash resources without first offering the New Ordinary Shares to existing Shareholders. The Directors believe that the additional costs that would have been incurred, both financially and in terms of management time, if the Company were to have offered all Shareholders the opportunity to acquire Ordinary Shares (for example, via an open offer or a rights issue), are such that a non-pre-emptive share issue to a limited number of institutional and other investors via the Placing and Retail Offer is a more appropriate method of raising finance for the purposes of the Acquisition. The Placing has therefore been structured as an accelerated bookbuild to minimise execution and market risk and neither that nor the Retail Offer have been underwritten.

The Placing is to be effected pursuant to the Placing Agreement. The Placing will result in the issue of up to 13,125,000 New Ordinary Shares, representing approximately 18.7 per cent. of the Existing Ordinary Shares.

Retail Offer

The Retail Offer will be open to private and other investors subscribing via PrimaryBid.com and will conditionally raise up to £1 million (before fees and expenses) through the issue of the Retail Offer Shares.

General

The New Ordinary Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends or other distributions declared, made or paid after their date of issue and will carry the same voting rights as the Existing Ordinary Shares. The New Ordinary Shares will be in registered form and will be capable of being held either in certificated form or in uncertificated form in CREST. The New Ordinary Shares will be admitted to the Official List with a premium listing and admitted to trading on the London Stock Exchange's Main Market for listed securities. It is expected that Admission will become effective and that dealings in the New Ordinary Shares will commence at 8:00 a.m. on 22 June 2021.

Dilution

It is proposed that up to 13,125,000 New Ordinary Shares will be issued in connection with the Placing and Retail Offer. This will result in the Company's issued share capital increasing by up to approximately 18.7 per cent. in aggregate. For illustrative purposes, immediately following Completion, those existing Shareholders as at the latest practicable date prior to this Announcement will, together, own approximately 84.2 per cent. of the issued share capital of the Company as enlarged by the Placing and Retail Offer.

 

Details of the New Loan Facility

The New Loan Facility comprises a US$15 million multicurrency revolving credit facility ("Facility A") and (at the lender's discretion) a separate option for a US$10 million accordion loan facility. Amounts borrowed under Facility A may be used, among others, to fund the consideration payable under the Acquisition, for any associated fees, costs, taxes and expenses, for the refinancing of certain financial indebtedness incurred in relation to acquisitions permitted under the terms of the facility and for the general corporate and working capital purposes of the Enlarged Group.

The rate of interest payable on each loan made under Facility A is the margin (defined therein) plus (as applicable, depending on the currency denomination of each loan) the sterling overnight index average reference rate or secured overnight financing rate. The margin payable on any Facility A loans is also subject to a margin ratchet, pinned to an adjusted leverage covenant contained in the New Loan Facility, where the highest margin payable is 2.75 per cent. per annum and the lowest is 2 per cent. per annum. The maturity date of the New Loan Facility is its third anniversary but the facility agreement also contains two extension options whereby the Company may (subject to obtaining the lender's consent) give notice to Bank of Ireland that it wishes to extend the maturity date of the New Loan Facility by additional periods, each of one year.

6.  Information on Gresham and future strategy

Following Completion, Gresham intends to continue pursuing its successful stated strategy of developing and selling innovative software solutions and cloud services to address data problems endemic in the financial services industry in order to drive profitable growth and create long-term Shareholder value.

Over the last ten years or so, the global shift to digital has driven dramatic change in society and business, with entire industries being reimagined and transformed by data and inter-connected real-time processes. In financial services, these technology advances and competitive pressures are compounded by increasing regulatory, risk and compliance demands. Firms are striving to achieve full front-to-back and end-to-end control and digitisation of their businesses. They are replacing archaic, inflexible systems and manual processes and investing in automation to improve the speed, accuracy and efficiency of their data processing. Executives need to have complete confidence in their data and processes to make good decisions, ensure optimal outcomes and protect their reputations.

The acquisition of Electra is aligned with Gresham's mission to bring digital integrity, agility and confidence to financial markets. Gresham expects to fully integrate the Electra business into its global, functional, operating model over the course of the first year of ownership. Integration will commence immediately with HQ functions, systems and processes, followed by sales, product, delivery and customer support. Priority will be given to the successful execution of the FY2021 sales plans of Electra and Gresham, and the rapid implementation of the go-to-market strategy for the Enlarged Group, including the cross-sell of products and services. The Electra name will be retained as a product level brand for the U.S. buy-side for a transitional period. The Enlarged Group will continue to invest in its sales and marketing resource to drive organic ARR growth through the acquisition of new customers as well as growth in existing accounts in the industry and geographic segments currently targeted by both businesses.

In summary, Gresham will be in a stronger position to build on its existing operations and will seek to win a greater share of its target addressable market. The Board will update Shareholders on the Enlarged Group's strategic progress in its half-year results expected to be announced in July 2021.

7.  Synergies

Following Completion, immediate cost savings are expected to be realised through the removal of duplicate senior leadership costs. However, the Board notes that in the short term these savings will be predominantly offset by a higher annual operating cost base of the Enlarged Group resulting from investments to be made into central functions in order to align Electra with Gresham's global operating platform, corporate governance procedures and reporting requirements. Accordingly, the Board does not expect to achieve any material cost synergies in the short term.

However, based on the due diligence process undertaken in advance of the Acquisition and its experience of integrating the Inforalgo acquisition, the Board has identified certain cost and efficiency synergies that are expected to materialise in the medium to longer term. In particular, the Board anticipates that the Enlarged Group will benefit from having a single corporate overhead structure, centralised functions and investments, and shared infrastructure and systems. The Enlarged Group will be able to share existing resources across geographic regions. Gresham's strong presence in Europe and Australia combined with Electra's significant U.S. footprint will create a better balanced global operation. The expected synergies identified above reflect both the beneficial elements and the relevant costs, are contingent upon completion of the Acquisition and would not be achieved independently.

Similarly, in respect of potential revenue synergies, whilst the Board does not anticipate significant enhancements to independent Electra and Clareti growth rates in the short term, enhancements are expected in the mid to long term. Over the mid to long-term, the Board anticipates being able to increase Electra's recurring revenue growth rates to at least the levels achieved in respect of the Group's Clareti products as cross-sell and upsell opportunities are realised and both the increased size and significantly increased North American sales and marketing presence of the Enlarged Group begins to deliver.

8.  Current trading, trends and future prospects

Gresham Technologies plc

On 9 March 2021, the Company published its full year results for the year ended 31 December 2020. Gresham Group's overall performance was described in the Chief Executive Officer's statement. The Company reported that in challenging circumstances, the team grew Clareti ARR by almost 30 per cent. High levels of investment into product innovation and customer services were sustained, whilst also increasing earnings. The Inforalgo acquisition, completed in the second half of 2020, was swiftly integrated and is already delivering returns. Investment into sales and marketing has been stepped up for the first half of FY2021 with a strong field team in place.

Gresham entered 2021 with an installed base of over 120 Clareti customers generating annualised recurring revenue of £12.3 million, which was £2.8 million and 29 per cent. higher than at the beginning of 2020. The Group already has good visibility on its legacy non-Clareti businesses. As a result, the Company is now much more resilient than it has been for many years. Gresham's pipeline has strengthened considerably in the last nine months and our financial services clients are investing into intelligent automation solutions to remove manual processes and save costs. We also expect to see ongoing spend on regulatory reporting infrastructure. Gresham will focus its sales efforts on these growth areas where the Board believes its technology has significant benefits over legacy vendors and newer competitors. The Company will also seek to identify further earnings-enhancing acquisitions in these same core markets.

FY2021 has started positively with several new customer wins in Europe and the United States and multiple upgrades have been signed with existing customers. Customer retention rates remain high. Subject to sustaining the Group's new business win rate, incremental investment in sales and distribution is planned for the second half of the year in order to further strengthen the pipeline into 2022.

Electra Information Systems, Inc.

Electra's performance for the first quarter of FY2021 was aligned with the Board's expectations. Recurring revenues increased by 5 per cent. against those achieved in the first-quarter of FY2020. Customer retention remains high and Gresham anticipates full year FY2021 growth similar to that achieved by Electra during the period reported in the historical financial information to be contained in the Shareholder Circular.

9.  RISK FACTORS

9.1  Risks related to the Acquisition

The following risks and uncertainties relate to the Acquisition:

Conditions in Stock Purchase Agreement

Completion of the Stock Purchase Agreement is conditional upon, among others, the satisfaction (or waiver, if applicable) of the following conditions:

· the approval of the applicable Resolutions by Shareholders at the General Meeting;

· the representations and warranties of Electra and the Vendors contained in the Stock Purchase Agreement continuing, subject to certain exceptions, to be true and correct as of the Completion Date;

· consummation of the transactions contemplated by the Stock Purchase Agreement being permitted by applicable law and there being no order issued by any court of competent jurisdiction or other restraint or prohibition limiting or restricting the consummation of the transactions contemplated by the agreement or Gresham Enterprise's ownership, conduct or operation of Electra's business following Completion;

· no defined material adverse effect having occurred; and

· immediately after the passing of the applicable Resolutions, the Placing Shares having been unconditionally allotted and issued by the Company, the Placing Agreement not having been terminated and having become and remaining unconditional in all respects and, immediately following Completion having taken place, Admission of the Placing Shares then occurring.

There can be no assurance that the outstanding conditions will be satisfied (or waived, if applicable) in the necessary timeframe and, accordingly, that Completion will take place.

Satisfying the conditions may also take longer than Gresham and the Vendors expect and could impact expected costs. Any delay in completing the Acquisition may also adversely affect any synergies and other benefits that the Company may achieve if the Acquisition is not completed within the expected timeframe. In addition, Gresham's and Electra's management would have spent significant time in connection with the Acquisition, which could otherwise have been spent in connection with the other activities of the Gresham Group and Electra, as applicable.

Therefore, the aggregate consequences of a material delay in completing or failing to complete the Acquisition may have a material adverse effect on the business, prospects, financial condition and/or results of operations of the Gresham Group and Electra and, in the case of a delay only, the Enlarged Group.

If the Acquisition does not proceed to Completion, there may also be an adverse impact on the reputation and brand of the Group and, given market perceptions, a negative impact on the price of the Ordinary Shares, for example, as a result of negative media scrutiny arising in connection with the failure to complete.

Warranties, indemnities and undertakings in the Stock Purchase Agreement

The Stock Purchase Agreement contains customary warranties, indemnities and other representations (including in relation to tax) given by the Vendors and Electra in favour of Gresham Enterprise. The Company has, through the due diligence procedures it deemed reasonable and appropriate, and in negotiating the terms of the Stock Purchase Agreement, taken steps to minimise the risk of a liability arising under these provisions. However, there can be no assurance that this due diligence exercise revealed or highlighted all relevant facts that may be necessary or helpful in evaluating the Acquisition and the Stock Purchase Agreement may not provide for Gresham to recover all types of losses which it could suffer following Completion, whether because those losses are not covered by appropriate provisions of the Stock Purchase Agreement or are otherwise excluded by its provisions, in particular by the application of any time limitations on claims or financial limitations on the Vendors' liability. Any failure to bring a successful claim arising from a breach of any such warranties, indemnities or representations could have a material adverse effect on the Enlarged Group's financial condition and on its reputation and brand.

The due diligence conducted by the Group in connection with the Acquisition may not have revealed all relevant considerations, liabilities or regulatory and conduct issues

The due diligence conducted by the Gresham Group on Electra in connection with the Acquisition may not have revealed all relevant considerations, liabilities or regulatory and conduct issues in relation to the Acquisition, including the existence of facts that may otherwise have impacted on the decision to proceed with the Acquisition, the determination of the consideration payable to the Vendors or the formulation of a business strategy for the Gresham Group, Electra or, following Completion, the Enlarged Group.

In addition, information provided during the due diligence process may have been incomplete, inadequate or inaccurate. The Gresham Group and, following Completion, the Enlarged Group may also be subject to legacy conduct and other exposures with respect to Electra which were not identified through due diligence. If any of the aforementioned occurs, the Gresham Group could suffer reputational damage and may also be liable for losses suffered by an affected party, each of which could have a material adverse effect on the business, reputation and brand, prospects, financial condition and/or results of operations of the Gresham Group and, following Completion, the Enlarged Group.

Change of control

A number of Electra's customer contracts (including its largest by annual revenues) include provisions that give the customer a right (but not the obligation) to terminate the contract upon a change of control of Electra unless prior consent is obtained from the customer. While neither Electra nor Gresham has any reason to believe these arrangements will not continue following Completion, none of Electra's customers was aware of the Acquisition prior to the date hereof and their views have not, given confidentiality concerns, been sought. The Acquisition is an event giving rise to a change of control of Electra and, accordingly, there is a risk that customers who enjoy such a right may seek to terminate their contract with Electra either immediately or upon shorter notice than would otherwise be required had the change of control event not occurred. Whilst any termination of customer agreements arising from the fact of Completion would reduce the amount of the deferred consideration payable by Gresham Enterprise to the Vendors, if any such contract is terminated, Electra would cease to derive revenues from the customer contract, which would reduce the net benefits of the Acquisition and impact the Enlarged Group's business and financial position. To mitigate this risk, Electra will be expected to seek consents to the change of control from affected customers prior to Completion, but there can be no assurance it will be successful in securing these consents.

Further, Electra's lease agreement relating to its premises in New York City also includes a change of control provision that, upon Acquisition, would entitle the landlord to terminate the lease with immediate effect or with shorter notice than would otherwise be required had the change of control event not occurred, unless the landlord's prior consent is obtained. If the lease were to be terminated, Electra would no longer have access to its premises in New York City, which could negatively impact its ability to conduct its business operations and which, in turn, may impact the Enlarged Group's business, prospects, financial condition and/or results of operations. To mitigate this further risk, Electra will also be expected to seek consent to the change of control from its landlord prior to Completion, but there can be no assurance that it will be successful in securing this consent either.

The Acquisition may have a disruptive effect on the Gresham business, impact relationships with strategic partners of the Gresham Group and Electra and could have a material adverse effect on the Group, Electra and, following Completion, the Enlarged Group

Notwithstanding the Gresham Group's and Electra's longstanding relationships with many of their respective strategic partners, uncertainty about the effects of the Acquisition on the future business relationships with those strategic partners (including customers, distributors, resellers and suppliers), may have a material adverse effect on the business, prospects, financial condition and/or results of operations of the Gresham Group, Electra and, following Completion, the Enlarged Group.

These uncertainties could cause parties that have business or other relationships with the Gresham Group, Electra and, following Completion, the Enlarged Group, either to cease or seek to cease doing business or to change their terms of business or take other decisions concerning the business of the Gresham Group, Electra and, following Completion, the Enlarged Group. This could result in the loss of strategic partners who may no longer choose to do business with the Gresham Group, Electra and, following Completion, the Enlarged Group which may have a material adverse effect on the Enlarged Group's operations, revenues and results.

The Enlarged Group may not realise, or it may take longer to realise, the expected synergies or other benefits of the Acquisition

Acquisitions are, by their nature, inherently risky undertakings and, while strategic investments such as acquisitions present opportunities for accelerated growth and the Gresham Group has successfully undertaken and implemented a number of acquisitions previously, this is its first acquisition made outside the UK and Europe, is significantly larger in scale than previous deals and, as such, no assurance can be given that the Acquisition will be successful.

The Enlarged Group may fail to achieve certain, or all of, the anticipated synergies or other benefits that Gresham expects to realise as a result of the Acquisition, they may be materially lower than have been estimated or it may take longer or cost more than expected to realise those synergies or other benefits. If the anticipated synergies or other benefits are not achieved, or take longer than expected to be realised, this could hinder Gresham's strategic growth plan, potentially jeopardise its position in the market and have a material adverse effect on the business, prospects, financial condition and/or results of operations of the Enlarged Group.

Technology modernisation

Gresham's due diligence has identified certain technology modernisation requirements with respect to Electra's products. Whilst Electra has initiated these modernisations, which are expected to deliver certain benefits, the extent and duration of the modernisation activities required are not currently quantified or quantifiable. There is a risk either that investments exceeding those currently provided for may be required to complete these modernisations, or that the modernisations may not be successful or deliver the benefits expected, which could negatively affect the Enlarged Group's business, prospects, financial condition and/or results of operations.

To mitigate such risks, Gresham intends to carry out a full review of Electra's modernisation plans as part of a comprehensive post-Completion integration process, as referred to below. In particular, Gresham will examine how the Enlarged Group's other IP assets may be used to accelerate the modernisation requirements and gradually work towards a combined technology stack and/or services capable of satisfying multiple product requirements. However, there can be no assurance that this will be feasible.

Pre-Completion changes in Electra's business

During the period from the signing of the Stock Purchase Agreement to Completion, events or developments may occur, including changes in the trading, operations or outlook of Gresham or Electra, or external market factors, which could make the terms of the Acquisition less attractive for the Company. Gresham Enterprise would be obliged to complete the Acquisition notwithstanding such events or developments. This may have an adverse effect on Gresham's business, prospects, financial condition and/or results of operations.

Potential future tax liabilities

Electra is subject to the corporate and other tax rules of the United States where it principally operates. The correct interpretation and application of any changes in applicable tax rates, reliefs and tax laws can be challenging in practice. Any failure to identify and manage this risk could lead to additional taxes, penalties and interest being imposed on the Enlarged Group.

There are also certain tax liabilities to which Electra may be subject in the future in relation to the historic financial period. Whilst these liabilities are largely indemnified against under the Stock Purchase Agreement, there is one specifically identified and quantified contingent tax claim which Gresham has agreed, in part, to share liability for with the Vendors, up to a maximum US$300,000 of which would be payable by Gresham. The eventual final sum payable in respect of this claim may be higher or lower and/or other additional but presently unidentified tax liabilities may also fall due. This may have an adverse effect on the Enlarged Group's financial condition and/or results of operations.

Integration risks

The success of the Acquisition will depend, in part, on the ability of the Directors and the Enlarged Group's management to successfully integrate Electra's operations, technologies and personnel into those of the Gresham Group's existing business. The Group's management team have reasonable experience of implementing an integration plan of the scale proposed but, if the Enlarged Group fails to successfully integrate the two businesses, or such integration is delayed or costs more than expected, this could negatively impact on the business, prospects, financial condition and/or results of operations of the Enlarged Group. The integration of these operations may also result in unanticipated operational problems, expenses and other liabilities, and the diversion of management's attention.

The challenges involved in this integration are anticipated to include the following:

· co-ordinating communications with, and/or the provision of products, services and solutions by the Enlarged Group to, customers of both the Gresham Group and Electra;

· consolidating the technologies used in the Enlarged Group's products and services, taking into account the modernisation requirements of certain Electra products noted above;

· the consolidation of certain systems, procedures, accounting functions, other facilities and technologies;

· additional capital or other expenditure requirements;

· ensuring that management systems and administrative and financial controls are adequate for the effective management of the Enlarged Group;

· the alignment of financial accounting and reporting policies and practices;

· achieving continuity of service and a compelling product roadmap to ensure the retention of acquired customers;

· resolving any outstanding or unforeseen legal, regulatory, contractual, employee or other issues arising from the Acquisition; and

· assimilating the personnel and business cultures of the Gresham Group's existing businesses with those of Electra and continuing to incentivise key employees.

Integration of the cultures and philosophies of the Gresham Group and Electra is also likely to be made more challenging to the extent that the current operational disruption resulting from the COVID-19 pandemic and the restrictions put in place by governments in the U.S., the UK and elsewhere are continuing at the time of Completion, particularly if employees are still required to work from home.

There can be no assurances that the Enlarged Group will be successful in meeting all of these challenges.

The value of Electra may be less than the consideration payable under the Stock Purchase Agreement

Notwithstanding a fairly assessed price, and the fact that a significant amount of the consideration payable to the Vendors under the Stock Purchase Agreement is contingent on Electra's performance during the two years following Completion, the amount payable under the Stock Purchase Agreement may turn out to exceed the value to the Enlarged Group of acquiring Electra.

Notably in this regard, Electra's top ten customers by number account for approximately 24 per cent. of its total recurring billings. In addition, certain of Electra's recurring revenues are based on the level of usage made by certain of its customers of the software which is licensed to them. These arrangements do not provide for a minimum term or amount to be paid by those customers and a decline in their usage of Electra's products could result in a decline in its revenues and may have a material adverse effect on its business, prospects, financial condition and/or results of operations and, following Completion, on those of the Enlarged Group.

Acquisition related costs may exceed expectations

The Enlarged Group may incur higher than expected integration, transaction and Acquisition-related costs. In addition, the Gresham Group has incurred legal, accounting and transaction fees and other costs related to the Acquisition. Some of these costs are payable regardless of whether the Acquisition is completed (in which case, they may not be recovered from the Vendors or Electra), and such costs may also be higher than anticipated, which may reduce the net benefits of the Acquisition and impact the Gresham Group's or, following Completion, the Enlarged Group's business, prospects, financial condition and/or results of operations.

9.2 Risks related to the Enlarged Group

Electra may not perform in line with expectations

The historical operating results of Electra may not necessarily be indicative of future performance. Furthermore, Electra's future ability to contribute fully to the Enlarged Group's cash flows and operating profitability will be dependent upon a number of factors, including certain risks described in this section of the document.

The Enlarged Group's success will depend on retaining and attracting key personnel

Following Completion, the Enlarged Group may not be able to retain key personnel as there can be no assurance that individuals employed by Electra or the Gresham Group will remain employed by the Enlarged Group.

Electra's senior management team is led by Founder and Chief Executive Officer, John Landry who is responsible for managing the operations of Electra. Mr Landry has agreed to provide on an ad hoc basis certain transitional support to Gresham with regard to Electra for a period of up to 12 months following Completion.

The Directors believe that Electra's senior management team are responsible for creating a strong culture which has helped Electra attract high-quality personnel, maintain a high retention rate of key staff and create a workforce that is dedicated to delivering high-quality products, services and solutions. Although Electra has a track record of long-service amongst most of its senior management, there is no guarantee that these individuals, including its COO, CFO, CTO, Chief Revenue Officer and key Product Managers, will remain with the Enlarged Group. The failure to retain key management and staff could have a material adverse effect on Electra and, following Completion, the Enlarged Group's business, prospects, financial condition and/or results of operations.

The success of the Enlarged Group will also depend on its future ability to recruit further key personnel. The inability to attract employees, or any delay in replacing a departed employee, may result in business disruption, intellectual property leakage, the loss of local market knowledge and longstanding relationships with customers and other strategic partners which may have a material adverse effect on the Enlarged Group's business, prospects, financial condition and/or results of operations.

Future strategy and external market competition

The future success of the Acquisition and of the Enlarged Group will depend on the successful implementation of its business strategy. The implementation of this business strategy will be subject to certain risks and factors outside the Board or the Company's control, including changes in the markets in which Gresham currently operates.

In addition, the markets in which the Gresham Group and Electra currently operate and, following Completion, the Enlarged Group will operate are competitive and are characterised to varying degrees by rapid technological change, evolving industry standards, evolving business models and consolidation within the software industry. The Enlarged Group will continue to face competition from a number of sources in the market for its software solutions, including significantly larger organisations, and could be adversely affected through declining product sales if market dynamics change rapidly and the Company fails or is unable to identify and address competitor threats as they emerge.

The Enlarged Group's competitors may also establish strategic or commercial relationships among themselves or with existing or potential customers or other third parties, which may have the effect of reducing the Enlarged Group's ability to promote and sell its products successfully.

In addition, the software industry is currently undergoing consolidation as software companies seek to offer more extensive suites and broader arrays of products, services and solutions. The COVID-19 pandemic has created further uncertainty in the technology market due to its global impact, which could lead to increased consolidation from potential opportunistic acquisitions by competitors or competitors reassessing or realigning their strategies. In doing so, these competitors may be able to reduce prices on software that competes with the Gresham Group's, Electra's and, following Completion, the Enlarged Group's products, services and solutions, in part by leveraging their larger economies of scale.

Consolidation may also permit competitors to offer a broader suite of products and more comprehensive bundled solutions, including software and services. This industry consolidation may result in increased pricing pressure and/or loss of business to these larger competitors. Competitor threats may also emerge from smaller organisations who, due to their size, may be in a better position to adopt newer technologies and/or rapidly develop and release new, competitive products to the Enlarged Group's current or target markets, particularly if they are funded by venture capital or private equity, resulting in additional competitive pressure on the Enlarged Group.

Any of these factors may have a material adverse effect on the business, prospects, financial condition and/or results of operations of the Gresham Group, Electra and, following Completion, the Enlarged Group.

The Enlarged Group's financial performance and prospects may be adversely affected by COVID-19, the long-term impact of which is still unknown

On 11 March 2020, the World Health Organisation announced that the outbreak of COVID-19 (commonly referred to as the Coronavirus) had been declared a global pandemic. This widespread health crisis has adversely affected the global economy, periodically resulting in volatility in financial markets. The full, long-term impacts of the pandemic are still evolving and, as yet, still remain to some extent unknown.

Whilst COVID-19 has not had a material impact on the Gresham Group and Electra to date other than a period of reduced sales during 2020 as customers attended to their own COVID-19-related internal operational priorities, the future development of the pandemic still remains relatively uncertain and there is no assurance this will not have a material adverse effect on the business, prospects, financial condition and/or results of operations of the Gresham Group, Electra and, following Completion, the Enlarged Group. Such effects could include disruptions or restrictions on the ability of employees to work effectively, as well as further temporary closures of facilities or the facilities of customers or suppliers, which could affect the Gresham Group, Electra and, following Completion, the Enlarged Group's ability to perform its contracts or purchase orders. Resulting cost increases may not be fully recoverable under those contracts or purchase orders or adequately covered by insurance which, in turn, could impact the Gresham Group, Electra and, following Completion, the Enlarged Group's profitability.

The full extent of this impact will depend on the continued geographical range of the virus, infection rates, the severity and related mortality rates of the virus, the timing and efficacy of vaccine roll-outs, the evolution and administration of further vaccines and the further, ongoing steps taken nationally and globally to limit the further spread, variance and proliferation of the virus.

Gresham Group and Electra are, in some cases, deemed to be critical suppliers to the financial markets and customers that they serve (for example, banks and other financial institutions) and, as such, have been required to continue to provide critical services to their respective customers during the COVID-19 pandemic. Additionally, demand for their products has remained robust to date, other than a period of reduced sales during 2020. Accordingly, neither the Gresham Group nor Electra has experienced a material detrimental impact to its respective business from 31 December 2020 to 27 May 2021 (being the latest practicable date prior to this Announcement ).

In light of COVID-19, many organisations have made changes to their standard operating procedures and have reviewed their own cost bases. Whilst Gresham's and Electra's customer retention rates have remained high since the pandemic began, there can be no assurance that customers will not seek to reduce their costs either by re-negotiating contract terms or migrating to lower-cost competitors. Furthermore, ongoing remote working and a lack of (or further limitations on) physical meetings restricts collaboration opportunities with colleagues and customers alike. This may impact productivity and sales and marketing activities, which in turn could impact the business and prospects of the Gresham Group, Electra and, following Completion, the Enlarged Group.

As COVID-19 has not had a material impact on the Gresham Group and Electra to date, the Company is unable to provide any additional information (other than that set out above) on its potential impact on the Gresham Group, Electra and, following Completion, the Enlarged Group.

Customer privacy, data protection and online security

Although the Gresham Group and Electra each seek to implement adequate cybersecurity programmes, the continually increasing sophistication of hackers and the prevalence of other cybersecurity threats means there is an ongoing risk of breaches of the Gresham Group's, Electra's and, following Completion, the Enlarged Group's IT and security systems resulting in unauthorised access to data centres (which may lead to business disruption or a loss of source code or other confidential information) or other parts of its IT environments containing confidential information. The Enlarged Group may be subject to other security breaches of its information technology systems, including sophisticated schemes, collusion to defraud or other illegal activities. A party that is able to circumvent the Enlarged Group's security systems, either by physical means or electronically, could access or steal personal data, financial data, customer data and other sensitive information held by it.

The attractiveness of the Enlarged Group's products and services to its customers depends, materially, on those customers trusting that their (or their own customers' and clients') identities, confidential data and the details of the transactions made by them (or on their behalf) on the Enlarged Group's products and systems will not be disclosed by the Enlarged Group to unauthorised third parties, other than in permitted circumstances.

Security breaches could also expose the Enlarged Group to litigation, possible liability and considerable reputational risk. If the Enlarged Group or any of the third party services on which it relies fails to process and manage customer data online in a secure manner, or if they otherwise fail to protect customer privacy and confidentiality in online transactions, there is a risk that the Enlarged Group's customers and potential customers would be deterred from using its services. While the Enlarged Group will continue to make significant efforts to protect itself and its customers from the occurrence of such activities, there can be no assurance that such measures will be successful.

Protection of intellectual property rights

The Gresham Group and Electra each currently rely and, following Completion, the Enlarged Group will rely, on patents, registered and unregistered trademarks, copyright, trade secrets and proprietary know-how and concepts. The Enlarged Group will continue to seek to protect the ownership and intellectual property rights in its current and future software products, in the UK, the United States and elsewhere, through a combination of patents, trademarks, copyrights and trade secret laws, as well as appropriate confidentiality agreements.

Although the Gresham Group is not currently aware of any potential or ongoing material breach of its intellectual property by any third party, including its competitors, nor any breach by Gresham of its competitors' intellectual property, any failure to obtain or maintain adequate protection of intellectual property rights for any reason could have a material adverse effect on the business, prospects, financial condition and/or results of operations of the Gresham Group, Electra and, following Completion, the Enlarged Group.

While the protection afforded by patent, trademark, copyright and trade secret laws may provide some advantages, the competitive position of participants in their industry is often principally determined by other factors, such as the technical and creative skills of its personnel, the frequency of new product developments and the ability to anticipate and rapidly respond to evolving market requirements. To the extent that a competitor effectively uses its intellectual property portfolio, including patents, to prevent the Gresham Group, Electra and, following Completion, the Enlarged Group from selling products that allegedly infringe such competitor's products, their results of operations could be materially adversely affected.

The Gresham Group and Electra also rely and, following Completion, the Enlarged Group will continue to place material reliance on unpatented and unregistered proprietary software, technology and products. It is possible that others will independently develop the same or similar software, technology or products, obtain access to such unpatented unregistered technology or otherwise, reverse engineer or decompile the Gresham Group's and, following Completion, the Enlarged Group's software products.

In common with other companies in the software industry, the Gresham Group, Electra and, following Completion, the Enlarged Group may continue to use or decide from time to time to extend its use of open source software in certain of its products. Despite rigorous processes to select only open source software that should not compromise the Group's, Electra's and, following Completion, the Enlarged Group's intellectual property, there may be uncertainty about the legal effect of some open source software licences. By using open source software, the Gresham Group, Electra and, following Completion, the Enlarged Group may become obliged to disclose parts of its own source code or may unknowingly be infringing the intellectual property rights of a third party.

To protect trade secrets and other proprietary information, employees, consultants, advisers and collaborators are typically required to enter into confidentiality agreements with the Gresham Group and Electra. However, it can never be assured that agreements of this sort will provide meaningful protection for trade secrets, know-how or other proprietary information in the event of any unauthorised use, misappropriation or disclosure. If the Gresham Group, Electra and, following Completion, the Enlarged Group are unable to maintain the proprietary nature of their technologies or to detect and take appropriate steps to enforce their rights against any third party infringing on those rights, sales could decrease and this could have a material adverse effect on the business, prospects, financial condition and/or results of operations of the Enlarged Group.

Following Completion the indebtedness of the Enlarged Group may materially increase, which could affect the Enlarged Group's business flexibility in the longer term

Gresham may finance any future deferred consideration payable to the Vendors in respect of the Acquisition through the New Loan Facility. As such, completion of the Acquisition may result in the Enlarged Group substantially increasing its levels of debt in the future compared to its historical position given that, while all existing indebtedness of Electra will be discharged on Completion, Gresham currently has no borrowings.

An increased level of debt could have the effect, among other things, of reducing the Enlarged Group's flexibility to respond to changing business and economic conditions. The amount of cash required to service any increased debt levels, and thus the demands on the Enlarged Group's cash resources, will be greater than the amount of the cash flows which were required to service the Group's debt and to pay dividends prior to the Acquisition.

Increased levels of debt could, in the longer term, also reduce funds available for the Enlarged Group's investments in capital expenditures, other acquisitions, share repurchases and/or other activities and may potentially create competitive disadvantages for the Enlarged Group relative to other companies with lower debt levels.

Exchange rate fluctuations

Gresham's reporting currency is, and will following Completion remain, pounds sterling. To that extent, one of its principal foreign currency exposures will, due to its enlarged U.S. operations, relate to movements in the U.S. dollar and pounds sterling exchange rate and U.S. dollar denominated costs in the U.S. This exposure may adversely affect its reported pounds sterling profits, cash flows and balance sheet positions, such as net debt. While Gresham already earns significant U.S. dollar and other non-sterling denominated revenues and implements policies appropriate to manage these exposures on an ongoing basis, the Acquisition will significantly increase the amount of its U.S. dollar earnings, cash flows and balance sheet values.

While policies will be adjusted appropriately to take account of these increased exposures in the Enlarged Group, there can be no assurance that the financial performance and condition of the Enlarged Group as reported in pounds sterling will not be adversely affected by future movements in the U.S. dollar/pounds sterling exchange rate.

9.3 Risks related to the Placing and Retail Offer and Ordinary Shares

The risk of executing the Acquisition could cause Gresham's share price to decline

The market price of the Ordinary Shares may decline as a result of the Acquisition if, among other reasons, the integration of Electra's business with that of Gresham is delayed or is unsuccessful, Gresham does not achieve the expected benefits of the Acquisition as rapidly or to the extent anticipated or at all, the effect of the Acquisition on Gresham's financial results is not consistent with the expectations of investors, or Shareholders sell a significant number of their Ordinary Shares after Completion.

The Company's share price may be subject to volatility and may not reflect the underlying value of the Group and, following Completion, the Enlarged Group

The market price of the Ordinary Shares could be subject to significant fluctuations due to a change in sentiment in the market regarding the Ordinary Shares (or securities similar to them). Such risks depend on the market's perception of the likelihood of completion of the Placing and Retail Offer, and/or in response to various facts and events, including any regulatory changes affecting the Gresham Group's and, following Completion, the Enlarged Group's operations, variations in its operating results and any future business developments of the Gresham Group and, following Completion, the Enlarged Group and/or its competitors. Stock markets have from time to time experienced (and may in the future also experience) significant price and volume fluctuations that have affected (and may in the future affect) the market prices for securities which may be unrelated to the operating performance or prospects of the Gresham Group and, following Completion, the Enlarged Group. Furthermore, the operating results and prospects of the Gresham Group and, following Completion, the Enlarged Group may from time to time fall below the expectations of market analysts and investors. Any of these events could result in a decline in the market price of the Ordinary Shares.

Shareholders will experience a dilution of their existing percentage ownership of Ordinary Shares and will have a reduced voting interest in Gresham

In light of the decision taken by the Directors to undertake the Placing and Retail Offer on a non-pre-emptive basis, rather than pro rata to existing Shareholders, the percentage ownership of the Ordinary Shares by the Company's existing Shareholders will be reduced. Gresham intends to issue up to 13,125,000 New Ordinary Shares in connection with the Acquisition which will represent, in aggregate, approximately 18.7 per cent. of the Existing Ordinary Shares. This will result in Gresham's issued share capital increasing by up to approximately 18.7 per cent. As a consequence, the number of voting rights which can be exercised and the influence which may be exerted by existing Shareholders in respect of the Enlarged Group will be reduced.

The market price of Ordinary Shares may go down as well as up

Shareholders should be aware that shares are risk investments and the value of an investment in Ordinary Shares, and any income received from them, may go down as well as up and can be highly volatile and subject to wide fluctuations in response to a variety of factors, potentially leading to losses for Shareholders. The price at which the Ordinary Shares may be quoted may not always reflect the underlying value or prospects of the Group or, following Completion, the Enlarged Group and the price which Shareholders may realise for their Ordinary Shares will be influenced by a large number of factors, some specific to Gresham and its operations (including, but not limited to, variations in the operating results of the Group or the Enlarged Group, divergence in financial results from analysts' expectations, changes in earnings estimates by stock market analysts, market appraisals of the Group's or the Enlarged Group's strategy, any additions or departures of key personnel, litigation, and press, newspaper and/or other media reports) and some which may, as a result of general economic conditions, legislative changes or in the Group's or the Enlarged Group's sector, affect the industry as a whole, other comparable companies or publicly traded companies generally.

Dividends

The ongoing ability of the Company to make further dividend payments to Shareholders will depend on a number of factors, including its financial condition and results of operations, any contractual restrictions (in particular those which have been imposed by Bank of Ireland pursuant to the New Loan Facility) and other factors considered relevant by the Directors. Under English law, any payment of dividends is subject to the Companies Act. All final dividends to be distributed by the Company must also be recommended by the Directors and approved by Shareholders.

Moreover, under English law, the Company may pay dividends on the Ordinary Shares only out of profits available for distribution in accordance with the Companies Act. Although the Directors intend, where permitted, to continue to pay dividends to Shareholders in the future, there can be no assurance either that the Company will declare and pay, or have the ability to declare and pay, any further dividends on the Ordinary Shares, or as to the amount of such dividends, if any.

An investment in the Ordinary Shares may not be suitable for all recipients of this Announcement

The Ordinary Shares may not be a suitable investment for all recipients of this Announcement. Before making any investment decision, prospective investors are advised to consult an appropriate independent financial adviser authorised under FSMA (if in the UK) or from another appropriately authorised independent financial adviser who specialises in advising on the acquisition of securities.

10.  Recommendation

The Board considers the Transaction to be in the best interests of the Company and Shareholders as a whole, and most likely to promote the success of the Company for the benefit of those Shareholders. Accordingly, the Board unanimously recommends that Shareholders vote (by proxy) in favour of the Resolutions to be proposed at the General Meeting, as those Directors who are Shareholders intend to do in respect of their own beneficial holdings of Ordinary Shares representing, in aggregate, approximately 0.27 per cent. of the Company's existing issued share capital.

 

 

APPENDIX

TERMS AND CONDITIONS OF THE PLACING

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY

THIS ANNOUNCEMENT, AND THE INFORMATION CONTAINED IN IT, IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL ("RESTRICTED JURISDICTIONS").

MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), PERSONS WHO ARE, UNLESS OTHERWISE AGREED BY NPLUS1 SINGER CAPITAL MARKETS LIMITED ("BOOKRUNNER") OR ITS ASSOCIATES, "QUALIFIED INVESTORS" (FOR THE PURPOSES OF THIS ANNOUNCEMENT, REFERRED TO AS "EEA QUALIFIED INVESTORS") WITHIN THE MEANING OF ARTICLE 2(E) OF THE EU PROSPECTUS REGULATION (WHICH MEANS REGULATION (EU) 2017/1129 AS AMENDED AND/OR SUPPLEMENTED FROM TIME TO TIME AND INCLUDES ANY RELEVANT IMPLEMENTING MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS REGULATION"); AND (B) IN THE UNITED KINGDOM, PERSONS WHO ARE, UNLESS OTHERWISE AGREED BY THE BOOKRUNNER, "QUALIFIED INVESTORS" (FOR THE PURPOSES OF THIS ANNOUNCEMENT REFERRED TO AS "UK QUALIFIED INVESTORS") WITHIN THE MEANING OF ARTICLE 2(E) OF THE PROSPECTUS REGULATION, WHICH FORMS PART OF RETAINED EU LAW IN THE UNITED KINGDOM BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 (THE "UK PROSPECTUS REGULATION") WHO ARE ALSO: (I) "INVESTMENT PROFESSIONALS" WITHIN THE MEANING OF ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); OR (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; OR (C) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFUL TO COMMUNICATE THEM (ALL SUCH PERSONS IN (A), (B) AND (C), TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN MUST NOT BE ACTED UPON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. EACH RECIPIENT IS DEEMED TO CONFIRM, REPRESENT AND WARRANT TO THE COMPANY THAT THEY ARE A RELEVANT PERSON. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT HEREIN RELATE IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT COMES ARE REQUIRED BY THE COMPANY AND THE BOOKRUNNER TO INFORM THEMSELVES ABOUT AND TO OBSERVE ANY SUCH RESTRICTIONS.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE OR FORM PART OF AN OFFER TO SELL OR ISSUE OR A SOLICITATION OF AN OFFER OR INVITATION TO BUY OR SUBSCRIBE FOR OR OTHERWISE ACQUIRE ANY SECURITIES IN ANY JURISDICTION INCLUDING, WITHOUT LIMITATION, THE RESTRICTED JURISDICTIONS OR ANY OTHER JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS OR MAY BE UNLAWFUL.  NO COPY OR PART OF THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT MAY BE PUBLISHED OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, TO PERSONS IN A RESTRICTED JURISDICTION UNLESS PERMITTED PURSUANT TO AN EXEMPTION UNDER THE RELEVANT LOCAL LAW OR REGULATION IN ANY SUCH JURISDICTION.

PERSONS DISTRIBUTING ANY PART OF THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO.  PERSONS (INCLUDING, WITHOUT LIMITATION, NOMINEES AND TRUSTEES) WHO HAVE A CONTRACTUAL OR OTHER LEGAL OBLIGATION TO FORWARD A COPY OF THIS ANNOUNCEMENT SHOULD SEEK APPROPRIATE ADVICE BEFORE TAKING ANY ACTION. PERSONS INTO WHOSE POSSESSION THIS ANNOUNCEMENT COMES ARE REQUIRED BY THE COMPANY AND THE BOOKRUNNER TO INFORM THEMSELVES ABOUT, AND OBSERVE, ANY SUCH RESTRICTIONS.

THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER 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, IN OR INTO THE UNITED STATES EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES.  NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES, THE UNITED KINGDOM OR ELSEWHERE. THE PLACING SHARES ARE BEING OFFERED AND SOLD OUTSIDE THE UNITED STATES IN "OFFSHORE TRANSACTIONS", AS DEFINED IN, AND IN COMPLIANCE WITH, REGULATION S UNDER THE SECURITIES ACT. PERSONS RECEIVING THIS ANNOUNCEMENT (INCLUDING CUSTODIANS, NOMINEES AND TRUSTEES) MUST NOT FORWARD, DISTRIBUTE, MAIL OR OTHERWISE TRANSMIT IT OR ANY PART OF IT IN OR INTO THE UNITED STATES.

THE RELEVANT CLEARANCES HAVE NOT BEEN, NOR WILL THEY BE, OBTAINED FROM THE SECURITIES COMMISSION OF ANY PROVINCE OR TERRITORY OF CANADA; NO PROSPECTUS HAS BEEN LODGED WITH, OR REGISTERED BY, THE AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION OR THE JAPANESE MINISTRY OF FINANCE; AND THE PLACING SHARES HAVE NOT BEEN, NOR WILL THEY BE, REGISTERED UNDER OR OFFERED IN COMPLIANCE WITH THE SECURITIES LAWS OF ANY STATE, PROVINCE OR TERRITORY OF AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR THE REPUBLIC OF SOUTH AFRICA. ACCORDINGLY, THE PLACING SHARES MAY NOT (UNLESS AN EXEMPTION UNDER THE RELEVANT SECURITIES LAWS IS APPLICABLE) BE OFFERED, SOLD, RESOLD OR DELIVERED, DIRECTLY OR INDIRECTLY, IN OR INTO AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION OUTSIDE THE UNITED KINGDOM.

NO ACTION HAS BEEN TAKEN BY ANY AFFILIATE THAT WOULD PERMIT AN OFFER OF THE PLACING SHARES OR POSSESSION OR DISTRIBUTION OF THIS ANNOUNCEMENT OR ANY OTHER PUBLICITY MATERIAL RELATING TO SUCH PLACING SHARES IN ANY JURISDICTION WHERE ANY ACTION FOR THAT PURPOSE IS REQUIRED.

ANY INDICATION IN THIS ANNOUNCEMENT OF THE PRICE AT WHICH THE COMPANY'S SHARES HAVE BEEN BOUGHT OR SOLD IN THE PAST CANNOT BE RELIED UPON AS A GUIDE TO FUTURE PERFORMANCE. THE PRICE AND VALUE OF SECURITIES CAN GO DOWN AS WELL AS UP. PERSONS REQUIRING ADVICE SHOULD CONSULT AN INDEPENDENT FINANCIAL ADVISER.

NO STATEMENT IN THIS ANNOUNCEMENT IS INTENDED TO BE A PROFIT FORECAST AND NO STATEMENT IN THIS ANNOUNCEMENT SHOULD BE INTERPRETED TO MEAN THAT EARNINGS PER SHARE OF THE COMPANY FOR THE CURRENT OR FUTURE FINANCIAL YEARS WOULD NECESSARILY MATCH OR EXCEED THE HISTORICAL PUBLISHED EARNINGS PER SHARE OF THE COMPANY.

THE CONTENTS OF THIS ANNOUNCEMENT ARE NOT TO BE CONSTRUED AS LEGAL, BUSINESS, FINANCIAL OR TAX ADVICE. EACH SHAREHOLDER OR PROSPECTIVE INVESTOR SHOULD CONSULT WITH HIS OR HER OR ITS OWN LEGAL ADVISER, BUSINESS ADVISER, FINANCIAL ADVISER OR TAX ADVISER FOR LEGAL, FINANCIAL, BUSINESS OR TAX ADVICE.

N+1 SINGER, WHICH IS AUTHORISED AND REGULATED IN THE UNITED KINGDOM BY THE FCA, IS ACTING SOLELY FOR THE COMPANY AND NO-ONE ELSE IN CONNECTION WITH THE PLACING, THE ACQUISITION AND THE TRANSACTIONS AND ARRANGEMENTS DESCRIBED IN THIS ANNOUNCEMENT AND WILL NOT REGARD ANY OTHER PERSON (WHETHER OR NOT A RECIPIENT OF THIS ANNOUNCEMENT) AS A CLIENT IN RELATION TO THE PLACING OR THE TRANSACTIONS AND ARRANGEMENTS DESCRIBED IN THIS ANNOUNCEMENT. N+1 SINGER IS NOT RESPONSIBLE TO ANYONE OTHER THAN THE COMPANY FOR PROVIDING THE PROTECTIONS AFFORDED TO CLIENTS OF N+1 SINGER OR FOR PROVIDING ADVICE IN CONNECTION WITH THE CONTENTS OF THIS ANNOUNCEMENT, THE PLACING, THE ACQUISITION OR THE TRANSACTIONS AND ARRANGEMENTS DESCRIBED HEREIN.

THE CONTENTS OF THIS ANNOUNCEMENT HAVE NOT BEEN REVIEWED BY ANY REGULATORY AUTHORITY IN THE UNITED KINGDOM OR ELSEWHERE. RECIPIENTS OF THIS ANNOUNCEMENT SHOULD EXERCISE CAUTION IN RELATION TO THE PLACING IF THEY ARE IN ANY DOUBT AS TO THE CONTENTS OF THIS ANNOUNCEMENT AND SEEK INDEPENDENT PROFESSIONAL ADVICE.

BY PARTICIPATING IN THE PLACING, EACH PLACEE IS DEEMED TO HAVE READ AND UNDERSTOOD THIS ANNOUNCEMENT IN ITS ENTIRETY AND TO BE MAKING SUCH OFFER TO ACQUIRE PLACING SHARES ON THE TERMS AND SUBJECT TO THE CONDITIONS SET OUT IN THIS ANNOUNCEMENT AND TO BE PROVIDING THE REPRESENTATIONS, WARRANTIES, UNDERTAKINGS, AGREEMENTS AND ACKNOWLEDGEMENTS CONTAINED IN THIS APPENDIX.

EACH PLACEE SHOULD CONSULT WITH ITS ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES.  THE DISTRIBUTION OF THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT MAY BE RESTRICTED BY LAW IN CERTAIN JURISDICTIONS, AND ANY PERSON INTO WHOSE POSSESSION THIS ANNOUNCEMENT, ANY PART OF IT OR ANY INFORMATION CONTAINED IN IT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, SUCH RESTRICTIONS.

No prospectus

No offering document or prospectus has been or will be prepared, submitted or approved by the FCA, the London Stock Exchange or any other authority in relation to the Placing and no such prospectus is required to be published. Placees' commitments will be made solely on the basis of the information contained in this Announcement and the business and financial informa ti on that the Company is required to publish in accordance with UK MAR and the rules and prac ti ces of the London Stock Exchange and of the FCA (collec ti vely the "Exchange Informa ti on ") or has (or will have prior to Admission) published via a regulatory information service ("Publicly Available Informa ti on ") (save that in the case of Exchange Informa ti on and Publicly Available Informa ti on, a Placee's right to rely on that informa ti on is limited to the rights that such Placee would have as a ma tt er of law in the absence of this paragraph) . Placees' commitments will also be subject to the further terms set forth in the form of confirmation to be provided to individual prospective Placees. 

Each Placee, by accepting a participation in the Placing, acknowledges and agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than (a) the Exchange Information and/or Publicly Available Information, (b) the amount of the relevant Placing participation in the oral and/or written confirmation given to Placees and (c) the trade confirmation referred to above ), representation, warranty or statement made by or on behalf of the Company, the Bookrunner, their respective Affiliates or any other person. Neither the Bookrunner, nor the Company, nor their respective Affiliates nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which Placees may have obtained or received and, if given or made, such information, representation, warranty or statement must not be relied upon as having been authorised by the Bookrunner, the Company or any of their respective Affiliates.

Each Placee, by accepting a participation in the Placing, also acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company. Neither the Company nor the Bookrunner is making any undertaking, representation or warranty to any Placee regarding the legality of an investment in the Placing Shares by such Placee under any legal, investment or similar laws or regulations. Each Placee should not consider any information in this Announcement to be legal, tax or business advice. Each Placee should consult its own solicitor, tax adviser and financial adviser for independent legal, tax and financial advice regarding an investment in the Placing Shares. Nothing in this paragraph shall exclude or limit the liability of any person for fraud or fraudulent misrepresentation by that person.

Details of the Placing Agreement and the Placing Shares

The Company has today entered into the Placing Agreement with the Bookrunner and N+1 Advisory and N+1 Advisory has agreed to act as Sponsor to the Company in relation to submission of the Shareholder Circular (including any Supplementary Circular) to the FCA for approval and other ancillary matters in relation to the Acquisition. Pursuant to the Placing Agreement, the Bookrunner has, subject to the terms set out in such agreement, agreed to use its reasonable endeavours, as agent for the Company, to procure Placees for the Placing Shares. The Bookrunner will today commence the Bookbuild for the purpose of determining the demand for participation in the Placing by Placees. The exact number of Placing Shares to be allocated and issued to each Placee shall be determined by the Bookrunner (in consultation with the Company) following completion of the Bookbuild.   This Appendix gives details of the terms and conditions of, and the mechanics for participation in, the Placing. The Placing is not being underwritten (in whole or in part) by the Bookrunner or any other person.

The Placing Shares will, when issued, be subject to the Articles, be credited as fully paid and rank pari passu in all respects with each other and with the Existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid in respect of such Existing Ordinary Shares after the date of issue of the Placing Shares. The Placing Shares will be issued free of any encumbrance, lien or other security interest.

Application for admission to trading

Application will be made to the London Stock Exchange for admission of the Placing Shares to trading on the Main Market.

It is expected that Admission will take place no later than 8.00 a.m. on 22 June 2021 and that dealings in the Placing Shares on the Main Market will commence at the same time.

Principal terms of the Bookbuild and Placing

N+1 Capital Markets is acting as broker to the Placing, as agent for and on behalf of the Company. N+1 Capital Markets is authorised and regulated in the United Kingdom by the FCA and 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 N+1 Capital Markets or for providing advice in relation to the matters described in this Announcement.

N+1 Advisory is acting as the Company's Sponsor in connection with publication of the Shareholder Circular and any Supplementary Circular and general communication with the FCA in respect of all ancillary matters, including the Acquisition and the Shareholder Circular and any Supplementary Circular. The appointment confers on N+1 Advisory all powers, authorities and discretions as are necessary or incidental to the appointment and the performance by N+1 Advisory as Sponsor.

N+1 Advisory as a Sponsor owes obligations and has responsibilities pursuant to the Listing Rules to the FCA. As a result instances may arise where N+1 Advisory's obligations and duties to the FCA may conflict with those owed to the Company; in such instances N+1 Advisory's obligations and duties to the FCA will take priority. N+1 Advisory is required to promptly notify the FCA if it becomes aware that the Company has failed to comply with legislation, including the Listing Rules, Disclosure and Transparency Rules, FSMA, the FS Act, MAR (as appropriate) and UK MAR.

N+1 Singer is receiving corporate finance fees and certain commissions on the Placing.

Participation in the Placing will only be available to persons who may lawfully be, and are, invited by N+1 Capital Markets to participate. N+1 Capital Markets and any of its Affiliates are entitled to participate in the Placing as principal.

The price per Placing Share (the "Issue Price") is fixed at 160 pence and is payable to N+1 Capital Markets by all Placees.

The book for the Placing will open with immediate effect. The accelerated bookbuilding process (the "Bookbuilding Process") is expected to close not later than 5.30 p.m. (London time) today, but may be closed at such earlier or later time as N+1 Capital Markets, in its absolute discretion, determines and the Bookrunner may, in agreement with the Company, also accept bids that are received after the Bookbuild has closed. Further announcements will be made following the closure of the Bookbuilding Process detailing the results of the Bookbuilding Process

Each Placee's allocation is determined by N+1 Capital Markets in its discretion following consultation with the Company and has been or will be confirmed orally by N+1 Capital Markets. That oral confirmation will give rise to an irrevocable, legally binding commitment by that person (who at that point becomes a Placee), in favour of N+1 Capital Markets and the Company, under which it agrees to acquire the number of Placing Shares allocated to the Placee at the Issue Price and otherwise on the terms and subject to the conditions set out in this Appendix and in accordance with the Articles. Except with N+1 Capital Markets' written consent, such commitment will not be capable of variation or revocation at the time at which it is confirmed.

Each Placee's allocation and commitment will be evidenced by a form of confirmation issued to such Placee by N+1 Capital Markets as soon as possible after oral confirmation of its allocation. The terms and conditions of this Announcement (including the Appendix) will be deemed to be incorporated in that form of confirmation.

10  Each Placee will have an immediate, separate, irrevocable and binding obligation, owed to N+1 Capital Markets (as agent for the Company), to pay to N+1 Capital Markets (or as it may direct) in cleared funds an amount equal to the product of the Issue 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.

11  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 at the same time, on the basis explained below under "Registration and Settlement".

12  All obligations of N+1 Capital Markets and N+1 Advisory respectively under the Placing and the Placing Agreement 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".

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

14  To the fullest extent permissible by law and applicable FCA rules, none of (a) the Affiliates or (b) any person acting on N+1 Capital Markets' and/or N+1 Advisory's behalf, shall have any liability (including, to the extent permissible by law, any fiduciary duties) to the Placees or to any other person whether acting on behalf of a Placee or otherwise. In particular, neither N+1 Capital Markets, N+1 Advisory nor any of their 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 N+1 Capital Markets and the Company may agree.

Registration and settlement

Settlement of transactions in the Placing Shares (ISIN: GB0008808825 ) will take place within the CREST system, subject to certain exceptions. Settlement through CREST will be on a T+2 basis unless otherwise notified by the Bookrunner, and is expected to occur on the date of Admission (expected to be 22 June 2021). The Bookrunner reserves the right to require settlement for, and delivery of, the Placing Shares to Placees by such other means as it deems necessary, if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in the Placee's jurisdiction. The Bookrunner will use the CASS Delivery Versus Payment exemption (under CASS 7.11.14R within the FCA Handbook Client Assets Sourcebook) with regard to settlement of funds, in connection with the Placing, should it see fit.

Each Placee allocated Placing Shares in the Placing will be sent a form of confirmation in accordance with the standing arrangements in place with the Bookrunner stating the number of Placing Shares allocated to it, the Issue Price, the aggregate amount owed by such Placee to the Bookrunner and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions that it has in place with the Bookrunner.

A Placee's entitlement to receive any Placing Shares under the Placing will be conditional on the Bookrunner's receipt of payment in full for such Placing Shares by the relevant time to be stated in the form of confirmation referred to above, or by such later time and/or date as the Bookrunner and the Company may in their absolute discretion determine, or otherwise in accordance with that confirmation's terms.  

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above the base rate of Barclays Bank Plc.

Each Placee is deemed to agree that if it does not comply with these obligations: (a) the Company may elect at its discretion to be released from all obligations with respect to the issue of all or any such Placing Shares to such Placee; and/or (b) the Bookrunner may sell (and is irrevocably authorised by such Placee to do so) all or any Placing Shares on such Placee's behalf and then retain from the proceeds, for the account and benefit of the Bookrunner (i) any amount up to the total amount due to it as, or in respect of, subscription monies, or as interest on such monies, for any Placing Shares, (ii) any amount required to cover any stamp duty or stamp duty reserve tax (together with any interest or penalties) arising on the sale of such Placing Shares on such Placee's behalf, and (iii) any amount required to cover dealing costs and/or commissions necessarily or reasonably incurred by it in respect of such sale; and (c) such Placee shall remain liable to the Bookrunner for the full amount of any losses or shortfall and of any costs which it may suffer or incur as a result of it (i) not receiving payment in full for such Placing Shares by the required time, and/or (ii) the sale of any such Placing Shares to any other person at whatever price and on whatever terms actually obtained for such sale by or for it. By communicating a bid for Placing Shares, each Placee confers on the Bookrunner all such authorities and powers necessary to carry out any such sale under this paragraph and agrees to ratify and confirm all actions which the Bookrunner lawfully takes in pursuance of such sale.

If Placing Shares are to be delivered to a custodian or settlement agent, the Placee should ensure that the form of confirmation is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares are registered in the Placee's name or that of its nominee or in the name of any person for whom the Placee is contracting as agent or nominee, such Placing Shares will, subject as provided below, be so registered free from any liability to stamp duty or stamp duty reserve tax. If there are any circumstances in which any other stamp duty or stamp duty reserve tax is payable in respect of the issue of the Placing Shares, neither the Bookrunner nor the Company shall be responsible for the payment thereof.  Placees will not be entitled to receive any fee or commission in connection with the Placing.

Conditions of the Placing

The Placing is conditional upon the Placing Agreement becoming unconditional in all respects (other than in respect of Admission) and not having been terminated in accordance with its terms.

The obligations of the Bookrunner and N+1 Advisory under the Placing Agreement are, and the Placing is, conditional upon, inter alia:

the Shareholder Circular having been forwarded to the FCA in accordance with Listing Rule 9.6.1 and approval of the same by the FCA in accordance with Listing Rule 13.2;

the posting of the Shareholder Circular and Form of Proxy to Shareholders entitled to receive the same by no later than 5.00 p.m. on 2 June 2021;

a Supplementary Circular having been produced by the Company should any of the matters set out in Listing Rule 10.5.4(2) have arisen prior to the General Meeting and (i) such Supplementary Circular having been sent to all Shareholders entitled to receive the same in accordance with Listing Rule 10.5.4(1)(b); and (ii) Listing Rules 10.5.4(1), 13.1.9 and 13.2 having been complied with;

the applicable Resolutions having been duly passed without amendment (other than those amendments approved by N+1 Singer in advance (acting reasonably)) at the General Meeting on the date specified in the notice of General Meeting to be set out in the Shareholder Circular or any adjournment thereof;

the Stock Purchase Agreement not lapsing, being withdrawn or otherwise terminating prior to Admission and the Acquisition having become unconditional save for Admission;

the Company having complied with all its obligations under the Placing Agreement and having satisfied all other conditions to be performed or satisfied by it under the Placing Agreement which fall to be performed or satisfied on or prior to Admission which, in each case in the good faith opinion of N+1 Singer, are Material (as defined in the Placing Agreement);

the Main Market Application (and all other documents required to be submitted with the Main Market Application, including the minutes of a meeting of the Board approving: (i) the issue and allotment of the Placing Shares, (ii) release of this Announcement through a RIS and (iii) application for Admission) each being signed by an appropriate Director and provided to the Bookrunner;

the Company having given instructions to N+1 Capital Markets to apply for Admission and to enable the release of this Announcement through a RIS;

the completed Main Market Application (and all other documents required to be submitted with the Main Market Application) being delivered to the London Stock Exchange in accordance with the Listing Rules by or on behalf of the Company not later than 8.00 p.m. on 17 June 2021;

10  each of the warranties given by the Company and contained in the Placing Agreement being true and accurate and not misleading on and as of (i) the date of the Placing Agreement; and on (ii) the date of the General Meeting (and any adjournment thereof); (iii) the date of any Supplementary Circular; and (iv) the date of Admission, as though they had been given and made on such dates by reference to the facts and circumstances at the relevant time;

11  the Placing Shares having been allotted, conditional only on Admission, by 5.00 p.m. on the Business Day before Admission (or such later time and/or date as N+1 Singer (acting reasonably) and the Company may agree in writing);

12  the obligations of N+1 Singer in respect of the Placing not having been terminated in accordance with clause 15 of the Placing Agreement prior to Admission;

13  no matter having arisen prior to Admission which would give rise to a claim under clause 14 (Indemnities) of the Placing Agreement; and

14  the documents referred to in clauses 6 and 7.1 of the Placing Agreement having been delivered in accordance with those respective clauses,

(all conditions to the obligations of N+1 Singer included in the Placing Agreement being together, the "conditions").

If any of the conditions are not fulfilled in all respects, or are not waived in writing in whole or in part by N+1 Singer (such waiver to be in N+1 Singer's absolute discretion and on such terms as it thinks appropriate and only to the extent permitted by law and regulation), or become incapable of being fulfilled (and are not so waived) on or before the required time and/or date specified for fulfilment or, if no time and/or date is specified for the fulfilment thereof, by 8.00 a.m. on 22 June 2021 (or such later time(s) and/or date(s) as N+1 Singer may agree (being not later than 22 July 2021)) and the Placing Agreement is then terminated in accordance with its terms, the Placing will lapse and the Placee's rights and obligations shall cease and terminate at such time 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 against N+1 Singer and/or the Company or any of their respective affiliates .

By participating in the Placing, each Placee agrees that its rights and obligations cease and terminate only in the circumstances described above and under "Termination of the Placing" below and will not be capable of rescission or termination by it.

Certain conditions may be waived in whole or in part by N+1 Singer, in its absolute discretion by notice in writing to the Company, and N+1 Singer 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 Announcement.

N+1 Singer may terminate the Placing Agreement in certain circumstances, details of which are set out below.

Neither N+1 Singer, the Company nor any of their respective affiliates, agents, directors, officers or employees 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 of 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 N+1 Singer.

Termination of the Placing

N+1 Singer may terminate the Placing Agreement, in accordance with its terms, at any time prior to Admission if, inter alia:

the Stock Purchase Agreement lapses, is withdrawn, terminated or otherwise terminates; or

the Company fails to comply with any of its obligations under the Placing Agreement, the terms of the Placing or the Stock Purchase Agreement, the Companies Act, FSMA, the FS Act, MAR (as applicable), UK MAR, the Listing Rules or any other law or regulation applicable to the Placing and/or the Stock Purchase Agreement which, in any such case, N+1 Singer considers in its absolute discretion (acting in good faith) to be Material; or

any of the warranties of the Company given in the Placing Agreement is untrue or inaccurate in any respect by reference to the facts or circumstances subsisting at that time or if a matter has arisen that might reasonably be expected to give rise to a claim under clause 14 of the Placing Agreement; or

any statement contained in the Shareholder Circular or the Form of Proxy, this Announcement, the investor presentation, the form of confirmation, any other announcement published by the Company or on its behalf in relation to the Placing and/or the Acquisition or any Supplementary Circular (the " Issue Documents ") is or has become untrue, incorrect or misleading in any respect which is Material, or any matter has arisen which would, if the Placing were made at that time, constitute a Material omission from the Issue Documents or any of them; or

in the opinion of N+1 Singer (acting in good faith), there shall have been any Material adverse change (whether or not foreseeable at the date of the Placing Agreement) in, or any development reasonably likely to involve a prospective Material adverse change in, the condition (financial, operational, legal or otherwise) or the earnings, business affairs or business prospects of the Group or the Enlarged Group taken as a whole, whether or not arising in the ordinary course of business; or

there has occurred any material adverse change in the financial markets in the United Kingdom or the international financial markets, any outbreak of hostilities or escalation of hostilities or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, or currency exchange rates, in each case the effect of which is such as to make it, in the judgment of N+1 Singer (acting reasonably and in good faith), impracticable or inadvisable to market the Placing Shares and/or to proceed with the Placing in the manner contemplated in the Issue Documents or which may materially and adversely affect the success of the Placing; or

if trading generally on the London Stock Exchange has been suspended or limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by such exchange or by such system or by order of any governmental authority, or a material disruption has occurred in commercial, banking or securities settlement or clearance services in the United States or in Europe; or

a banking moratorium has been declared by US or UK authorities; or

there has occurred a material adverse change or a material prospective adverse change since the date of the Placing Agreement in UK taxation affecting the Ordinary Shares or the transfer of the Ordinary Shares or the imposition of exchange controls by the United Kingdom.

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 and no claim can be made by any Placee against N+1 Singer and/or the Company or any of their respective affiliates in respect thereof.

By participating in the Placing, each Placee agrees with the Company and N+1 Singer that the exercise by the Company or N+1 Singer 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 N+1 Singer and that neither the Company nor N+1 Singer need make any reference to such Placee and that neither N+1 Singer, 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.

By participating in the Placing, each Placee agrees that its rights and obligations terminate only in the circumstances described above and/or under the "Conditions of the Placing" section above and will not be capable of rescission or termination by it after its allocation of Placing Shares has been confirmed orally by N+1 Capital Markets.

Representations, warranties and further terms

By par ti cipa ti ng in the Placing, each Placee (and any person ac ti ng on such Placee's behalf) will be deemed to make the following representa ti ons, warran ti es, acknowledgements, agreements and undertakings (as the case may be) to the Bookrunner and the Company, in each case as a fundamental term of its applica ti on for Placing Shares:

it has read and understood this Announcement in its entirety (including this Appendix) and acknowledges that its participation in the Placing will be governed by the terms and conditions of the Placing as referred to and included in this Announcement (including this Appendix);

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

in the case of a Relevant Person in a member state of the EEA which is subject to the Prospectus Regulation (each a "Relevant Member State") who acquires any Placing Shares pursuant to the Placing:

(a)  it is an EEA Qualified Investor; and

(b)  in respect of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 5(1) of the 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 to, persons in any Relevant Member State other than EEA Qualified Investors or in circumstances in which the prior consent of the Bookrunner has been given to the offer or resale; or

(ii)  where Placing Shares have been acquired by it on behalf of persons in any Relevant Member State other than EEA Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Regulation as having been made to such persons;

in the case of a Relevant Person in the United Kingdom who acquires any Placing Shares pursuant to the Placing:

(a)  it is a UK Qualified Investor; and

(b)  i n respect of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 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 to, persons in the United Kingdom other than UK Qualified Investors or in circumstances in which the prior consent of the Bookrunner has been given to the offer or resale; or

(ii)  where Placing Shares have been acquired by it on behalf of persons in the United Kingdom other than UK Qualified Investors, the offer of those Placing Shares to it is not treated under the UK Prospectus Regulation as having been made to such persons;

it is outside of the United States and is otherwise acquiring the Placing Shares in an "offshore transaction" meeting the requirements of Regulation S;

it, and the person(s), if any, for whose account or benefit it is subscribing for the Placing Shares, is not subscribing for and/or purchasing Placing Shares as a result of any "directed selling efforts" as defined in Regulation S or as a result of any form of "general solicitation" or "general advertising" within the meaning of Rule 502(c) under the Securities Act ;

it is not, and any person who it is acting on behalf of is not, and at the time the Placing Shares are subscribed will not be, a national or resident of, or a corporation, partnership or other entity organised under the laws of, or with an address in, any Restricted Jurisdiction, 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 any Restricted Jurisdiction and may not be offered, sold, or acquired, directly or indirectly, within those jurisdictions;

if it is outside the United Kingdom, neither this Announcement, the form of confirmation nor any other offering, marke ti ng or other material issued in connec ti on with the Placing cons ti tutes an invita ti on, offer or promo ti on to, or arrangement with, it or any person whom it is procuring to subscribe for Placing Shares pursuant to the Placing unless, in the relevant territory, such offer, invita ti on or other course of conduct could lawfully be made to it or such person and such materials could lawfully be provided to it or such person and Placing Shares could lawfully be distributed to and subscribed and held by it or such person without compliance with any unfulfilled approval, registra ti on or other regulatory or legal requirements;

it will not make any offer to the public of those Placing Shares to be purchased by it for the purposes of the Prospectus Regula ti on Rules made by the FCA pursuant to the Prospectus Regula ti on Rules (Amendment) Instrument 2020 (FCA 2020/73);

10  if in the United Kingdom, unless otherwise agreed by the Bookrunner, it is a "professional client" or an "eligible counterparty" within the meaning of Chapter 3 of the FCA Handbook Conduct of Business Sourcebook (" COBS ") and it is purchasing Placing Shares for investment only and not with a view to resale or distribu ti on;

11  it has not distributed, and will not distribute, any materials rela ti ng to the Placing Shares and it will be acquiring the Placing Shares for its own account as principal or for a discre ti onary account or accounts (with respect to which it has the authority to make the statements set out in this Announcement) for investment purposes only and it does not have any contract, understanding or arrangement with any person to sell, pledge, transfer or grant a par ti cipa ti on therein to such person or any third person with respect to any Placing Shares; save that if it is a private client stockbroker or fund manager, it confirms that in purchasing Placing Shares it is ac ti ng under the terms of one or more discre ti onary mandates granted to it by private clients and it is not ac ti ng on an execu ti on only basis or under specific instruc ti ons to purchase Placing Shares for the account of any third party;

12  acknowledges that no prospectus or offering document has been or will be prepared in connection with the Placing and that it has not received and will not receive a prospectus or other offering document in connection with the Placing or the Placing Shares;

13  the Existing Ordinary Shares are admitted to trading on the Main Market, and the Company is therefore required to publish the Exchange Information, which includes a description of the nature of the Company's business and the Company's financial information, including balance sheets, income statements or similar statements and that it is able to obtain or access the Exchange Information and Publicly Available Information and that it has reviewed such Exchange Information and Publicly Available Information ;

14  pursuant to the Listing Rules, the Acquisition constitutes a Class 1 transaction for the Company and is therefore conditional upon, amongst other things, the passing by the Shareholders at the General Meeting of an ordinary resolution approving the Acquisition;

15  in accepting its participation in the Placing, it is relying solely on this Announcement, the Exchange Informa ti on and the Publicly Available Informa ti on (save that in the case of Exchange Informa ti on and Publicly Available Informa ti on, a Placee's right to rely on that informa ti on is limited to the right that such Placee would have as a ma tt er of law in the absence of this paragraph) and not on any other information given, or representation, warranty or statement made at any time, by any person concerning the Company, the Placing Shares or the Placing. Subject to paragraphs 17 and 18 below, it agrees that neither the Company nor the Bookrunner, nor any of their respective Affiliates nor persons acting on their behalf will have any liability for any other information, warranty or representation. It irrevocably and unconditionally waives any rights it may have in respect of any other information, warranty or representation;

16  it has made its own assessment of the Company, the Placing Shares and the terms and conditions 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 and has satisfied itself that the information is still current;

17  neither the Bookrunner nor any of its Affiliates nor any person acting on their behalf has provided, and will not provide it with, any material or information regarding the Placing Shares or the Company; nor has it requested that the Bookrunner or any of its Affiliates nor any person acting on their behalf provide it with any such material or information; nor is it relying on any investigation that the Bookrunner, any of its Affiliates or any person acting on their behalf may have conducted with respect to the Placing Shares or the Company;

18  the content of this Announcement is exclusively the responsibility of the Company and neither the Bookrunner nor any of its Affiliates nor any person acting on their behalf will be responsible for or shall have any liability for any information, representation or statement relating to the Company contained in this Announcement or any information previously published by or on behalf of the Company and neither the Bookrunner nor any of its Affiliates nor any person acting on their behalf will be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise;

19  it has such knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for Placing Shares.  It further represents and warrants 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 also represents and warrants that it has had sufficient time to consider and has conducted its own investigation with respect to its subscription for Placing Shares, including the associated tax, legal and other economic considerations, and 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;

20  it has not relied on any confidential price sensitive information concerning the Company in making its investment decision to participate in the Placing and is not purchasing Placing Shares on the basis of material non-public information or inside information (as defined under UK MAR);

21  if it has received any confidential price sensitive information (including inside information as defined under UK MAR) about the Company in advance of the Placing, it warrants that it has received such information within the market soundings regime provided for in Article 11 of UK MAR and has not: (a) dealt in the securities of the Company; (b) encouraged or required another person to deal in the securities of the Company; or (c) disclosed such information to any person, prior to the information being made publicly available;

22  it is aware of its obligations regarding insider dealing, including, without limitation, as contained within the Criminal Justice Act 1993 and UK MAR, and confirms that it has and will continue to comply with those obligations;

23  it has the funds available to pay for the Placing Shares for which it has agreed to subscribe and acknowledges, agrees and undertakes that it will pay the total subscription amount in accordance with the terms of this Announcement at the due time and on the due date set out herein, failing which the relevant Placing Shares may be placed with other Placees or sold at such price as the Bookrunner and the Company determine;

24  it has not relied on any information relating to the Company contained in any research reports prepared by the Bookrunner and its Affiliates or any person acting on their behalf and understands that (a) neither the Bookrunner nor any of its Affiliates nor any person acting on their behalf has or shall have any liability for public information or any representation; (b) neither the Bookrunner nor any of its respective Affiliates, nor any person acting on their behalf, has or shall have any liability for any additional information that has otherwise been made available to such Placee, whether at the date of this Announcement or otherwise; and (c) neither the Bookrunner nor any of its Affiliates, nor any person acting on their behalf, makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of such information, whether at the date of this Announcement or otherwise;

25  it (a) is entitled to acquire Placing Shares under the laws and regulations of all relevant jurisdictions which apply to it; (b) has fully observed such laws and regulations and obtained all such governmental and other guarantees and other consents and authorities (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement including this Appendix) which may be required thereunder and has complied with all necessary formalities; (c) has all necessary capacity and authority and is entitled to commit to its participation in the Placing and to perform its obligations in relation thereto and will honour such obligations, and to make the representations and agreements contained in this Appendix; (d) has paid any issue, transfer or other taxes due in connection with its participation in the Placing in any territory; (e) has not taken any action which will or may result in the Company or the Bookrunner or any of their Affiliates or any person acting on their behalf being in breach of the legal and/or regulatory requirements of any territory in connection with the Placing; and (f) if it is a pension fund or investment company, is aware of and acknowledges that it is required to comply with all applicable laws and regulations with respect to its subscription for Placing Shares;

26  it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) relating to the Placing Shares in circumstances in which it is permitted to do so pursuant to section 21 of FSMA and it acknowledges and agrees that this Announcement has not been approved by the Bookrunner 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;

27  it is aware of, has complied with and will comply with all applicable laws with respect to anything done by it, or on its behalf, in relation to the Placing Shares (including, without limitation, all relevant provisions of FSMA and the FS Act) in respect of anything done in, from or otherwise involving the United Kingdom;

28  it is aware of and 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 Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and related or similar rules, regulations or guidelines, issued, administered or enforced by any government agency having jurisdiction in respect thereof and the Money Laundering Sourcebook of the FCA (together, the "Money Laundering Regulations") and, if it is 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 Money Laundering Regulations;

29  in order to ensure compliance with the Money Laundering Regulations, the Bookrunner or the Company's registrars may, in their absolute discretion, require verification of its identity. Pending the provision to the Bookrunner or the Company's registrars, as applicable, of evidence of identity, definitive certificates in respect of the Placing Shares may be retained at the Bookrunner's absolute discretion or, where appropriate, delivery of the Placing Shares to it in uncertificated form, may be retained at the Bookrunner's 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 Bookrunner (for itself and as agent on behalf of the Company) or the Company's registrars have not received evidence satisfactory to them, the Bookrunner and/or the Company may, at its absolute discretion, terminate its commitment in respect of the Placing, in which event the monies payable on subscription will, if already paid, be returned without interest to the account of the drawee's bank from which they were originally debited;

30  its participation in the Placing will not give rise to an offer being required to be made by it, or any person with whom it is acting in concert, pursuant to Rule 9 of the City Code on Takeovers and Mergers;

31  it (and any person acting on its behalf) will pay for the Placing Shares acquired by it in accordance with this Announcement at the due time and on the due date set out in this Announcement or in any form of confirmation issued pursuant to this Announcement against delivery of such Placing Shares to it, failing which the relevant Placing Shares may be placed with other Placees or sold as the Bookrunner or the Company may, in their absolute discretion, determine and it will remain liable for any shortfall in the net proceeds of such sale below the Placing proceeds of such Placing Shares and it may be required to bear any costs, commissions, 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;

32  neither the Bookrunner, nor any of its Affiliates nor any person acting on their behalf is making any recommendations to it or advising it regarding the suitability or merits of any transaction it may enter into in connection with the Placing, and that neither the Bookrunner, nor any of its Affiliates nor any person acting on their behalf has any duties or responsibilities to it for providing advice in relation to the Placing or in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement or for the exercise or performance of any of the Bookrunner's rights and obligations thereunder, including any right to waive or vary any condition or exercise any termination right contained therein;

33  it irrevocably appoints the Bookrunner and any of its duly authorised officers as its agent for the purposes 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 agreed to be taken up by it under the Placing;

34  any person who confirms to the Bookrunner on behalf of a Placee an agreement to subscribe for Placing Shares and/or who authorises the Bookrunner to notify the Placee's name to the Company's registrars, has authority to do so on behalf of the Placee;

35  the agreement to settle each Placee's allocation of Placing Shares (and/or the allocation of a person for whom it is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company of the Placing Shares in question. Such agreement assumes that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to issue or transfer the Placing Shares into a clearance service. If there were any such arrangements, or the settlement related to another dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable and the Placee agrees that it shall be responsible for such stamp duty or stamp duty reserve tax, and acknowledges that neither the Company nor the Bookrunner will be responsible therefor .  If this is the case, the Placee should take its own advice and notify the Bookrunner, accordingly;

36  it agrees to participate in the Placing on the basis that the Placing Shares will be allotted to the CREST stock account of the Bookrunner who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

37  any money held in an account with the 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. The Placee acknowledges that such 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 Bookrunner's money in accordance with the client money rules and will be used by the Bookrunner in the course of its business; and the Placee will rank only as a general creditor of the Bookrunner;

38  the Bookrunner may choose to invoke the CASS Delivery Versus Payment exemption (under CASS 7.11.14R within the FCA Handbook Client Assets Sourcebook) with regard to settlement of funds, in connection with the Placing, should it see fit;

39  neither it nor, as the case may be, its clients expects the Bookrunner to have any du ti es or responsibili ti es to such persons similar or comparable to the du ti es of "best execu ti on" and "suitability" imposed by the COBS, and the Bookrunner is not ac ti ng for it or its clients, and the Bookrunner will not be responsible for providing the protec ti ons afforded to customers of the Bookrunner or for providing advice in respect of the transac ti ons described in this Announcement;

40  time is of the essence as regard its obligations in respect of its participation in the Placing under these terms and conditions;

41  the basis of any Placee's allocation in the Placing will be determined together by the Bookrunner and the Company in their absolute discretion. The right is reserved to reject in whole or in part and/or to scale back any participation in the Placing;

42  its commitment to subscribe for Placing Shares on the terms set out in this Announcement including this Appendix will continue notwithstanding any amendment that may in future be made to the terms of the Placing and Placees will have no right to be consulted or require that their consent be obtained with respect to the conduct of the Placing;

43  the Bookrunner and its Affiliates acting as an investor for its or their own account(s) may 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 Bookrunner and/or any of its respective Affiliates acting as an investor for its or their own account(s). Each Placee further acknowledges that the Bookrunner and its Affiliates may enter into financing arrangements and swaps with investors in connection with which the Bookrunner and any of its Affiliates may from time to time acquire, hold or dispose of such securities of the Company, including the Placing Shares. Neither the Bookrunner 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;

44  it will (or will procure that its nominee will) if applicable, make notification to the Company of any interest in the Ordinary Shares in accordance with the Disclosure Guidance and Transparency Rules published by the FCA;

45  any documents or communications sent to a Placee will be sent at the Placee's risk and may be sent to any address notified by it to the Bookrunner; 

46  the exercise by the Bookrunner of any right or discretion under the Placing Agreement shall be within the absolute discretion of the Bookrunner and need not have any reference to it and shall have no liability to it whatsoever in connection with any decision to exercise or not to exercise any such right and each Placee agrees that it has no rights against the Bookrunner or the Company, or any of their respective Affiliates, under the Placing Agreement pursuant to the Contracts (Rights of Third Parties Act) 1999;

47  the Company, the Bookrunner and others will rely upon the truth and accuracy of the confirmations, acknowledgements, representations, warranties, indemnities, agreements and undertakings in this Announcement including this Appendix ("Placing Confirmations") and, if any of the foregoing Placing Confirmations is or becomes no longer true or accurate, the Placee shall promptly notify the Bookrunner;

48  if it is subscribing for the Placing Shares as a fiduciary or agent for one or more investor accounts, it has full power and authority to make, and does make, the Placing Confirmations on behalf of each such account;

49  it agrees to indemnify on an after-tax basis and hold harmless each of the Company, the Bookrunner, their respective Affiliates and any person acting on their behalf from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach by it of the Placing Confirmations; and

50  its participation in the Placing, these terms and conditions and any contractual or non-contractual obligations arising out of, or in relation thereto, shall be governed by and construed in accordance with English law and the courts of England shall have exclusive jurisdiction to hear and decide any proceedings which may arise out of or in connection with these terms and conditions, except that enforcement proceedings in respect of the Placee's obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Bookrunner or the Company in any jurisdiction.

The Placing Confirmations referred to above are given to each of the Company and the Bookrunner (for their own benefit and, where relevant, the benefit of their respective Affiliates) and any person acting on their behalf, are irrevocable and shall not be capable of termination by a Placee in any circumstances and will survive completion of the Placing and Admission.

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

The rights and remedies of the Bookrunner and the Company under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one or more remedies will not prevent the exercise of others. The provisions of this Announcement may be waived, varied or modified as regards specific Placees or on a general basis by the Bookrunner.

No claim shall be made against the Company, the Bookrunner or their respective Affiliates or any other person acting on their behalf by a Placee to recover any damage, cost, charge or expense which it may suffer or incur by reason of or arising from the carrying out by it of any work to be done by it pursuant to this Announcement or the performance of its obligations pursuant to this Announcement or otherwise in connection with the Placing.

The agreement to se tt le a Placee's subscrip ti on (and/or the subscrip ti on of a person for whom such Placee is contrac ti ng as agent) free of stamp duty and stamp duty reserve tax depends on the se tt lement rela ti ng only to a subscrip ti on by it and/or such person direct from the Company for the Placing Shares in ques ti on. Such agreement assumes that the Placing Shares are not being subscribed for in connec ti on with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the se tt lement relates to any other subsequent dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor the Bookrunner will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is par ti cipa ti ng in the Placing as an agent or nominee) the alloca ti on, allotment, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an a ft er-tax basis and to hold harmless the Company and the Bookrunner in the event that the Company and/or the Bookrunner have incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and no ti fy the Bookrunner 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 UK 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.

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

 

DEFINITIONS

 

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

"Acquisition"

the conditional acquisition by Gresham Enterprise of all of the issued and outstanding shares of common stock of Electra in accordance with the terms of the Stock Purchase Agreement

"Admission"

admission of the Placing Shares (or, as the case may be, the Retail Offer Shares) to the premium listing segment of the Official List and to trading on the Main Market in accordance with the Listing Rules

"Affiliate"

the Company, N+1 Capital Markets and/or N+1 Advisory or any of their respective directors, officers, partners, agents, employees, affiliates, advisers, consultants or, in the case of N+1 Singer, persons connected with them as defined in FSMA

"Announcement"

this announcement, including the Appendix

"Appendix"

the appendix to this Announcement

"Articles"

the articles of association of the Company

"Board" or "Directors"

the directors of the Company or any duly authorised committee thereof

"Bookbuild"

the accelerated bookbuilding process being undertaken by the Bookrunner as agent for the Company in relation to the Placing

"Bookrunner"

N+1 Capital Markets

"CAGR"

the compound annual growth rate.

"certificated" or "in certificated form"

an Ordinary Share recorded on the Company's share register as being held in certificated form (namely, not in CREST)

"Company"

Gresham Technologies plc

"Companies Act"

the Companies Act 2006, as amended from time to time.

"Completion"

the closing of the Acquisition in accordance with the terms of the Stock Purchase Agreement

"CREST"

the relevant system (as defined in the CREST Regulations being SI 2001/3755 as amended from time to time) in respect of which Euroclear  UK & Ireland is the operator (as defined in the CREST Regulations)

"CREST Proxy Instruction"

a proxy appointment or instruction made using CREST, authenticated in accordance with Euroclear UK & Ireland 's specifications and containing the information set out in the CREST manual

"Disclosure and Transparency Rules"

the Disclosure Guidance and Transparency Rules which form a block of the FCA Handbook

"Electra"

Electra Information Systems, Inc. (incorporated as a corporation in the State of New York, United States)

"'Enlarged Group"

the Group as enlarged by the Acquisition

"Existing Ordinary Shares"

the 70,201,458 Ordinary Shares with voting rights in issue at the date of this Announcement, comprising the entire issued share capital of the Company

"FCA"

the Financial Conduct Authority in the UK or its successor from time to time

"Form of Proxy"

the form of proxy (which will accompany the Shareholder Circular) for use by Shareholders in connection with the General Meeting

"FS Act"

the Financial Services Act 2012

"FSMA"

the Financial Services and Markets Act 2000, as amended

"FY2018", "FY2019", "FY2020", "FY2021" and/or "FY2022"

the financial years of each of the Gresham Group and Electra ended or, as applicable, ending on 31 December respectively in each such year

"General Meeting"

the general meeting of the Company to be held on a combined physical and electronic basis at 10.00 a.m. on 21 June 2021, notice of which will be set out in the Shareholder Circular (or any adjournment thereof)

"Gresham Enterprise"

Gresham Enterprise Storage, Inc. (incorporated as a corporation in the State of Texas, United States) being a wholly-owned subsidiary undertaking of the Company.

"Group" or " Gresham Group"

the Company and its existing subsidiaries and subsidiary undertakings

"Issue Price"

160 pence, being the price per Placing Share which will be payable pursuant to the Bookbuild and the price per Retail Offer Share which will be payable pursuant to the Retail Offer

"Listing Rules"

the Listing Rules made by the FCA pursuant to Part VI of FSMA governing, inter alia, admission of securities to the Official List

"London Stock Exchange"

London Stock Exchange plc

"Main Market"

the Main Market, the market of that name operated by the London Stock Exchange

"Main Market Application"

the application to be made to the London Stock Exchange for Admission in the form specified by the Listing Rules

"MAR"

the Market Abuse Regulation (EU No 596/2014) and all delegated regulations, technical standards and guidance relating thereto

"Material"

material in the context of the Group or the Enlarged Group (as the case may be) taken as a whole , the Placing and/or the Admission and/or the Acquisition

"New Loan Facility"

a US$15 million multicurrency revolving credit and US$10 million accordion loan facility dated 28 May 2021 entered into by the Company and Gresham International with Bank of Ireland

"New Ordinary Shares"

together, the Placing Shares and the Retail Offer Shares

"N+1 Advisory"

Nplus1 Singer Advisory LLP, the Company's sponsor for the purposes of the Acquisition and the Shareholder Circular

"N+1 Capital Markets"

Nplus1 Singer Capital Markets Limited, the Company's broker and bookrunner for the purposes of the Placing and Admission

"N+1 Singer"

N+1 Advisory and N+1 Capital Markets

"Official List"

the list of securities that have been admitted to listing maintained by the FCA pursuant to Part IV of FSMA

"Ordinary Shares"

the ordinary shares of 5 pence each in the capital of the Company

"pence"

pence sterling, the lawful currency of the UK

"Placees"

those persons procured by N+1 Capital Markets who subscribe for Placing Shares pursuant to the Placing

"Placing"

the proposed conditional placing of the Placing Shares at the Placing Price pursuant to the Placing Agreement

"Placing Agreement"

the conditional placing and sponsor agreement dated 28 May 2021 between the Company and N+1 Singer relating to the Placing

"Placing Shares"

the 12,500,000 new Ordinary Shares to be issued pursuant to the Placing

"Prospectus Regulation"

the Directive of the European Parliament and of the Council of the European Union Regulation (EU) 2017/1129

"Regulation S"

Regulation S under the Securities Act

"Resolutions"

the ordinary and special resolutions set out in the notice convening the General Meeting to be included in the Shareholder Circular

"Retail Offer Shares"

the 625,000 New Ordinary Shares proposed to be issued in connection with the Retail Offer

"RIS"

any of the services set out in Appendix I to the Listing Rules

"Securities Act"

the United States Securities Act of 1933, as amended

"Shareholders"

the holders of Existing Ordinary Shares or New Ordinary Shares (as the context requires) at the relevant time



"Shareholder Circular"

the Class 1 circular to be published by the Company in connection with the Transaction including a letter from the Chairman of the Company and the notice convening the General Meeting

"Sponsor"

an investment bank or similar institution which has been approved by the FCA to act as a sponsor under Listing Rule 8

"Stock Purchase Agreement"

the conditional stock purchase agreement entered into on 28 May 2021 between John Landry, Robert Danic, Scott Rhodes and Alexander Feigeles, Gresham Enterprise and the Company in connection with the Acquisition

"Supplementary Circular"

such supplementary shareholder circular (if any) as is required to be published by the Company pursuant to the Listing Rules

















"Transaction"

the Acquisition, the Placing and the Retail Offer.

"UK MAR"

MAR which has effect (as amended) in English law by virtue of the European Union (Withdrawal) Act 2018, as amended

"UK Prospectus Regulation"

the Prospectus Regulation as amended and retained in UK law on 31 December 2020 by the European Union (Withdrawal) Act 2018, as amended

"United Kingdom" or "UK"

the United Kingdom of Great Britain and Northern Ireland

"United States" or "US"

the United States of America, its territories and possessions, any state of the United States of America, the District of Columbia and all other areas subject to its jurisdiction and any political sub-division thereof

"£"

pounds sterling, the lawful currency of the UK

"US$" and " U.S. dollar"

United States dollars, the lawful currency of the United States

 

 

 

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