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Kanyon PLC (KNYN)

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Wednesday 28 March, 2007

Kanyon PLC

Acquisition

Kanyon PLC
28 March 2007


Kanyon Plc ('Kanyon' or 'the Company')

Acquisition of Solar Labs Plc



Kanyon is pleased to announce today that the Company has entered into an
agreement  to acquire ('the Acquisition') the entire issued share capital of
Solar Labs Plc ('Solar Labs'), a start up business seeking to develop
economically viable solar energy solutions.



The total consideration of £4,338,413 will be satisfied by the issue of
433,841,307 new Ordinary Shares ('the Consideration Shares'). The new Ordinary
Shares will be issued at 1 penny per share at a 3.75 pence discount to the mid
market closing price of 4.75 pence per Ordinary share on 27 March 2007. The
Consideration Shares will rank pari passu with the existing Ordinary Shares.



The Acquisition is subject to:



1.      The receipt of code waiver letters from the shareholder of Solar Labs
        Plc; and

2.      The approval of all the resolutions at the EGM noted below:



•        as an ordinary resolution, to approve the Acquisition; and

•        as an ordinary resolution, to approve the ongoing investment strategy.





The acquisition of Solar Labs is also a related party transaction for the
purposes of the AIM Rules for Companies.



Shareholders will receive further information regarding the date of the EGM and
issue of the related circular in further announcements.





Information on Solar Labs

Solar Labs was incorporated on 4 October 2006 with the objective of harnessing a
diverse range of technologies to support the development of complete and
economically viable solar energy solutions. This will be achieved through the
acquisition, development and commercialisation of technologies in this solar
energy sector. Solar Labs will cover a full range of solar technologies
including solar photo-voltaics; solar thermal; solar lighting/air conditioning;
solar water splitting and other solar chemical processes. The company may also

acquire and in-licence technologies from related non-solar fields such as
nanotechnology, energy storage, transport and methods of transforming energy.



Solar Labs will evaluate the development of commercial solar energy around three
technical areas of focus:

1.         the conversion of solar radiation into controlled energy states. In
this context the range of energy states comprise various energy forms (including
electricity; temperature differentials; chemical; and light) as well as its
time, location and intensity;



2.         the subsequent transition into other controlled energy states of
greater economic value; and



3.         the modification of energy consumption to exploit solar energy
sources that can be delivered efficiently through step 1 and 2 above.



Solar energy has the theoretical potential to meet global energy requirements
many times over. The energy reaching the earth's surface from the sun exceeds
human power consumption by over five thousand times. In maximising the capture
of solar energy for human exploitation, the Directors see the potential for many
parallel solar-based energy industries to co-exist: each meeting different
energy needs using tailored methods of capture, transition, delivery and
consumption.



Solar Labs aims to become a leading developer and provider of technology
solutions to the solar energy industries. Solar Labs will leverage the Proposed
Directors' considerable experience in the development of collaboration with
academic research intuitions to commercialise intellectual property. In
evaluating, technologies, the company expects to benefit significantly from the
experience and expertise of its chief scientific adviser, Prof. Peter Dobson.
Both the Directors and Proposed Directors (as described below) and their
advisers benefit from a good access to academic institutions and industry.



Trading

The Company had net assets of £3.4 million as at 31 January 2007 represented
almost entirely by cash balances and Solar Labs had net assets of £60,000 at 31
January 2007 also represented almost entirely by cash balances. The enlarged
Group will therefore have net assets of approximately £3.9 million after
transaction costs to meet its ongoing investment strategy. The Directors and
Proposed Directors will continue to maintain a low cost structure for the
Company.



The Acquisition Agreement

Under the terms of the agreement dated 28 March 2007 made between the Company
(1) and Ora Capital Partners plc ('Ora'), Richard Griffiths, Barnard Nominees
Limited (on behalf of Elenora International Investment Limited), David Norwood,
Alan Aubrey, James Ede Golightly, Michael Bretherton and Thames Investment Club
(together 'the Vendors') (2) ('the Acquisition Agreement') the Company
conditionally agreed to purchase the entire issued share capital of Solar Labs.
The consideration, which is payable on admission of the Consideration Shares ('
Admission'), is approximately £4.3m (which will be satisfied by the allotment by
the Company of 433,841,307 new Ordinary Shares to the Vendors credited as fully
paid at 1 penny per share).



The Acquisition Agreement is conditional upon, inter alia, (i) the Resolutions
being passed; (ii) and Admission. The Company has a right to rescind the
agreement if a material adverse change occurs in relation to the assets or
financial position of Solar Labs prior to Admission. The Vendors have a right to
rescind the agreement if a material adverse change occurs in relation to the
Company prior to Admission.



The Acquisition Agreement contains restrictive covenants from the Vendors and
certain warranties and indemnities from the Vendors (together 'the Warrantors')
to the Company ('the Seller Warranties'). Such warranties are given on a several
basis. The Acquisition Agreement contains certain warranties and indemnities
from the Company to the Warrantors ('the Buyer Warranties'). The Acquisition
Agreement contains a maximum liability of the Warrantors for breach of the
Seller Warranties and a maximum liability of the Company for breach of the Buyer
Warranties. The liability of the

Warrantors under the Seller Warranties and of the Buyer under the Buyer
Warranties shall cease three months after the publication of the audited
accounts of the Group for a period ending not earlier than 30 September 2007.



The entry by the Company into the Acquisition Agreement is a related party
transaction for the purpose of the AIM Rules for Companies. Michael Bretherton
is a Vendor. The Directors (other than Michael Bretherton) confirm that, having
consulted Zimmerman Adams International Limited, the Company's nominated
advisor, they consider the terms of the Acquisition Agreement to be fair and
reasonable insofar as the shareholders are concerned.



Ongoing Investment Strategy

The Directors and Proposed Directors intend to continue to identify
opportunities they believe fulfil the Company's original objectives of
investing, or acquire assets, businesses or companies in the energy and
resources sectors including and specifically the hydrocarbon, mining exploration
and development industries, but the focus will now be in the field of renewable
energies and solar energy solutions which are complementary to the Company's
enlarged business. Acquisitions and investments may be funded with a combination
of equity and cash, although the Company may also utilise debt under certain
conditions. It is still anticipated that any further acquisitions, other than
pure intellectual property transactions, will be structured through limited
liability vehicles. The Directors will continue to be active investors and
monitor any investments and/or acquisitions made by the Company.



It is not the current intention of the Directors or Proposed Directors that the
Company will seek further funds from Shareholders.





Amendment to Sutcliffe Option

Under the terms of a deed of amendment dated 28 March 2007, Dr Matthew Sutcliffe
has agreed that the option granted to him on 3 October 2006 be amended so that
it is an option to subscribe for 1,250,000 Ordinary Shares (not 5,000,000
Ordinary Shares) and that it now is exercisable when the Company, or any
subsidiary, has acquired shares or other assets (in accordance with the
Company's ongoing investment strategy where the aggregate consideration paid by
the Company exceeds £3,000,000.



Proposed Directors

On completion of the Acquisition, the following directors are proposed to join
the board of the Company.



David Norwood, aged 38,(Proposed Non-executive Chairman)

David Norwood is the founder and Executive Chairman of IP Group Plc , a company
focused on the commercialisation of research and IP from universities. David
graduated in modern history from Keble College, Oxford following which he worked
as a foreign exchange trader at Bankers Trust and then as an investment analyst
at Duncan Lawrie. In 1997 he joined Williams de Broe to advise quoted and
unquoted technology companies. David founded IndexIT Partnership in 1999, a
technology advisory boutique which was subsequently acquired by Beeson Gregory
Group Plc at which time he joined the board of Beeson Gregory and was appointed
chief executive at the beginning of 2001. David joined the board of The

Evolution Group Plc following its merger with Beeson Gregory in July 2002 and
then became chief executive of IP Group Plc (formerly IP2IPO) when it floated on
AIM in October 2003. In addition to IP Group, David is a director of several
other AIM listed companies.



Alan Aubrey, aged 45 ,(Proposed Non-executive Director)

Alan Aubrey is Chief Executive Officer of IP Group Plc and has extensive
experience in IP

commercialisation. Alan established Techtran Group Limited in 2002 and was its
CEO when the business was acquired by IP Group PLC (formerly IP2IPO Group) in
January 2005. Previously he was a partner in KPMG where he specialised in
corporate finance advice to technology businesses. Alan joined the Board of IP
Group on its acquisition of Techtran Group and became Chief Executive Officer of
IP Group in January 2006. Alan is a member of the Institute of Chartered
Accountants of England and Wales.



Solar Labs will also be retaining the following adviser in a senior capacity:



Prof. Peter Dobson, Consultant and Chief Scientific Adviser

Prof. Peter Dobson has extensive experience in sustainable energies including
Solar. He was appointed to a university lectureship and college fellowship at
Queen's College Oxford in 1988 and a Professorship in 1996. Prior to this he
lectured in Physics at Imperial College and was senior principal scientist at
Philips Research laboratories. At Oxford University, Prof. Dobson is responsible
for setting up new interdisciplinary research institutes that combine University
activities with commercial R&D. One of these research institutes will be devoted
to sustainable energy. Prof. Dobson has been responsible for two university
spinouts, Oxonica Plc and Oxford Biosensors Limited. Oxonica Plc is an AIM
listed company. He also serves on advisory committees of several companies that
have been 'spun out' of Oxford

University.



Lock-Ins And Orderly Market Arrangements

At Admission, the Vendors will, in aggregate, be interested in 433,841,307 new
Ordinary Shares, representing approximately 49.1 per cent. of the enlarged share
capital of the Company. Richard Griffiths, David Norwood, Alan Aubrey, Barnard
Nominees Limited (which holds Ordinary Shares on behalf of Elenora International
Investment Limited) and Ora have agreed to undertake to the Company, Zimmerman
Adams International and Hichens Harrison that they will not sell or dispose of,
except in certain limited circumstances (as permitted by the AIM Rules for
Companies), any interest in Ordinary Shares held by them at any time before the
first anniversary of Admission, save in certain limited circumstances and, for
the 12 months immediately following, will effect a sale only through the brokers
for the time being of the Company with a view to maintaining an orderly market
in the Ordinary Shares.



In addition, Dolven Holdings Limited, Bainunah Trading Limited, Michael
Bretherton, Byron Lloyd and Matthew Sutcliffe have all previously undertaken to
the Company, ZAI and Hichens Harrison that it will not sell or dispose of,
except in certain limited circumstances (as permitted by the AIM Rules), any of
its interest in Ordinary Shares at any time before 10 October 2007 (being the
first anniversary of the admission of the existing Ordinary Shares to trading on
AIM) and, for the 12 months immediately following, will effect a sale only
through the brokers for the time being of the Company with a view to maintaining
an orderly market in the Ordinary Shares.



Controlling Shareholder

On completion of the Acquisition, Ora will hold Ordinary Shares representing
approximately 42.94 per cent. of the enlarged issued share capital of the
Company. The Directors are satisfied that the Company is capable of carrying on
its business independently of Ora and that all transactions and relationships
between Ora and the Company are and will continue to be at arm's length and on
commercial terms.



To ensure that Shareholders continue to be adequately protected in this regard,
the Company and Ora have entered into a new relationship agreement which,
conditional on approval of the Acquisition, will replace the relationship
agreement entered into with Ora on 3 October 2006) to reflect the fact that,
following completion of the Acquisition, the Company will have new investment
interests following its first acquisition. Pursuant to the Relationship
Agreement, Ora has given certain undertakings to the Company to the effect that
the Board can amongst other things operate on an independent basis. In
considering any proposed arrangements or contracts between Ora and the Company,
David Norwood, Byron Lloyd and Michael Bretherton are not considered to be
independent of Ora and will abstain from voting on any such arrangements or
contracts at any Board meeting of the Company.



The Relationship Agreement is effective for so long as Ora, together with its
associates, hold (whether directly or indirectly) in aggregate, shares in the
capital of the Company representing 25 per cent. or more of the Company's entire
issued ordinary share capital.




Kanyon Plc - Michael Bretherton                                           020 7099  7260
Zimmerman Adams International - Nominated Adviser                         020 7060 1760

Ray Zimmerman/Jonathan Evans







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