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RNS Number : 6899F
Panoply Holdings PLC (The)
11 March 2020
This announcement contains inside information
11 March 2020
The Panoply Holdings PLC
("The Panoply", or the "Group")
Acquisition of Ameo
Strengthening and diversifying the Group's Public Sector
offering
The Panoply Holdings PLC, a digitally native technology services
group, announces the acquisition of the entire issued share capital
of Ameo Professional Services Ltd (" Ameo "), a consultancy
specialising in delivering business change, with a strong focus on
the public sector (the " Acquisition ").
Ameo has been working with businesses for over 10 years seeking
to deliver long-lasting, cost-effective change across a wide range
of areas, from financial reporting and process design to digital
innovation. Public sector work is expected to represent over 90% of
revenues for the current financial year and, s ince being formed,
Ameo has worked with over 100 clients. Ameo's ethos is to seek to
work as a partner with its clients in order to develop sustainable
solutions and improve the skills of its clients' teams.
The Board believes that the Acquisition will bring additional
and complementary capabilities to the Group's public sector
offering, as well as extending its reach into this key market. The
strategy and change delivery capability of Ameo, alongside the
organisational and service design capability of FutureGov, and the
backing of The Panoply's first-in-class technology businesses
provides the basis for targeting and winning increasingly large
digital transformation projects in the UK public sector.
Ameo's extensive public sector experience includes:
* in local government, Ameo's longest standing market,
the delivery of more than 400 projects to deliver
positive change for c ouncils. Recent examples
include supporting the Local Government
Reorganisation for Dorset Council and the development
and delivery of a new Council Operating Model for
Warwickshire County Council;
* in healthcare, devel oping multi-agency healthcare
partnerships and supporting initiatives in fields
such as operational improvement, procurement and
service integration. Ameo has delivered projects to
NHS Trusts, Clinical Commissioning Groups (CCGs) and
health system partnerships;
* across the wider public sector, working with devolved
assemblies, regional bodies and emergency service
providers.
In addition, Ameo also has considerable experience delivering
projects across other sectors such as higher education, energy and
utilities, and various industries within the private sector.
Ameo is a debt free, cash generative and cash positive business.
In the year ended 30 October 2019 it reported unaudited revenues of
GBP6.9m, and a normalised profit before tax of GBP1.0m(1) .
The Panoply is paying an effective purchase price of GBP7.0m for
the Acquisition, to be satisfied though the payment of circa
GBP2.2m cash and the issue of 5,853,658 new ordinary shares in The
Panoply. I n addition, Ameo has cash in excess of normalised
working capital requirements and so an additional cash payment of
GBP1.3m will also be paid to the vendors at Completion in excess of
the GBP7.0m.
As at 10 March 2020, assuming all payments in connection with
the Acquisition had been made as at that date, the Group retained
cash reserves of approximately GBP4m and a net debt position of
GBP1m.
(1) Normalised in respect of salaries, additional required hires
and audit costs
Neal Gandhi, Chief Executive Officer of The Panoply, said:
"Our focus is to deliver positive, sustainable change in the UK
public sector and Ameo's stellar track record of work in central
and local government, healthcare and higher education broadens our
capability to achieve this goal for our clients. Ultimately, this
Acquisition increases our relevance and puts us in a stronger
position to target and win larger, more strategic engagements at
the heart of the UK public sector.
"With this Acquisition, public services revenues now account for
approximately 70% on a proforma basis, giving us additional scale
in the sector and adding to the breadth of skills that we can now
offer clients.
"The public sector needs to continue on its digital
transformation journey with urgency, encouraging staff to embrace
modern ways of working and speeding up the adoption of cloud
platforms. As an agile native, cloud only organisation, The Panoply
is able to cater to this need and the addition of Ameo to our Group
will support us in addressing this pressing demand. Together we
look forward to leading the way for our clients across public, not
for profit and commercial sectors."
Ben Ward, Director of Ameo, said:
"Over the past decade we've built a highly knowledgeable team
capable of delivering change across a range of industries and
sectors. We recognise The Panoply as a group which complements our
approach to seeking to deliver projects that are empowering and
transformational.
"The collaborative culture fostered within the Group will take
us to the next stage in our evolution by expanding our existing
service capabilities and expertise to br ing new leading-edge
solutions to our clients' challenges, particularly across service
redesign, robotic process automation and Applied AI. We are excited
to begin work as part of the Group and to take advantage of the
many opportunities this collective strength brings."
Additional information on the acquisition
The Panoply has acquired Ameo from Ben Ward, Fiona Ward and
Michael Dearing.
The consideration payable under the share purchase agreement
relating to the Acquisition (the "SPA") is set at GBP8.3m and
comprises the following on Completion:
* the allotment and issue of 5,853,658 ordinary shares
in the Panoply, with a value of GBP4.8m, calculated
by reference to a price of 82 pence to the sellers
(the "Initial Panoply Shares");
* a payment in cash of GBP2.2m; and
* a payment in cash of GBP1.3m in respect of the cash
currently held on Ameo's balance sheet in excess of
its normalised working capital requirements,
together (the "Initial Consideration").
The cash element of the Initial Consideration is being funded
through a combination of the Group's RCF Facility with HSBC, the
Group's existing cash reserves and the excess cash of GBP1.3m
acquired as part of the Acquisition.
Subject to the future EBITDA performance of Ameo (based on
EBITDA) during the 17 month period 1 November 2019 to 31 March 2021
(set in order to align with The Panoply's year-end) and 12 month
period from 1 April 2021 to 31 March 2022, in addition to the
Initial Consideration, the selling shareholders of Ameo will be
entitled to receive deferred earn-out consideration, which will be
payable by the allotment and issue of shares in The Panoply ("
Panoply Shares ") following the agreement of the relevant EBITDA
calculations and publication of the Group's results relating to
those financial periods. The number of Panoply Shares to be
allotted and issued shall be calculated by dividing the earn-out
price payable by a price per share in The Panoply which is the
greater of 82 pence and the volume-weighted average mid-market
price (VWAP) over the 30 business days prior to the issue of the
relevant Panoply Shares. Any Panoply Shares allotted and issued by
way of deferred consideration will be allotted and issued in one
tranche following the publication of the Group's results for the
relevant period.
The total consideration payable by The Panoply in respect of the
Acquisition is capped at a maximum of GBP10.5m which includes the
reimbursement payment of GBP1.3m meaning that the effective cap is
GBP9.2m.
All Panoply Shares allotted and issued under the SPA (including
the shares issued as part of the Initial Consideration) are subject
to customary lock-in arrangements and subject to claw-back by The
Panoply if AMEO's EBITDA decreases over the 2 year earn-out
period.
Admission and total voting rights
An application has been made for the admission of the Initial
Panoply Shares to trading on AIM which is expected to take place on
or before 17 March 2020. Following this issue, the Company's issued
share capital will comprise 55,052,267 Ordinary Shares and this is
the total number of voting rights in the Company. There are no
shares held in treasury.
This figure may be used by shareholders as the denominator for
the calculation by which they may determine if they are required to
notify their interest in, or change to their interest in, the
Company under the FCA's Disclosure Guidance and Transparency
Rules.
Enquiries:
The Panoply Holdings
Neal Gandhi (CEO) Via Alma PR
Oliver Rigby (CFO)
Stifel Nicolaus Europe Limited +44 (0)207 710 7600
(Nomad and Broker)
Fred Walsh
Alex Price
Alma PR panoply@almapr.co.uk
(Financial PR) +44(0)203 405 0209
Susie Hudson
Josh Royston
Kieran Breheny
The person responsible for making this announcement is Oliver
Rigby, CFO.
About The Panoply
The Panoply is a digitally native technology services company,
built to service clients' digital transformation needs. Founded in
2016, with the aim of identifying and acquiring best-of-breed
specialist information technology, design and innovation consulting
businesses across Europe, the Group collaborates with its clients
to deliver the technology outcomes they're looking for at the pace
that they expect and demand.
More information is available at www.thepanoply.com
About Ameo:
Ameo works with private and public sector businesses to deliver
lasting and meaningful change. It works alongside business,
deploying the right resources and the best advice to ensure
programmes are delivered effectively, efficiently and in a manner
that fits the business's culture.
More information is available at www.ameogroup.com
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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