TIDMMPM
RNS Number : 0531O
mporium Group PLC
30 September 2019
This Announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 ("MAR"). In addition, market
soundings (as defined in MAR) were taken in respect of the Placing
with the result that certain persons became aware of inside
information (as defined in MAR), as permitted by MAR. This inside
information is set out in this Announcement. Therefore, those
persons that received inside information in a market sounding are
no longer in possession of such inside information relating to the
Company and its securities.
30 September 2019
Mporium Group plc
("Mporium", the "Company" or the "Group")
Proposed acquisition and fundraising
Mporium Group plc (AIM: MPM), the technology firm delivering
event-driven marketing, is pleased to announce that it has entered
into non-binding heads of terms for the acquisition of the entire
issued share capitals of Click Laboratories Limited and We Breathe
Media Ltd (together, "Click Labs"), two companies under
substantially common ownership operating a performance-based
digital agency focused on the design, build and delivery of
end-to-end multi-channel lead generation campaigns, for a maximum
consideration of GBP5.5 million (the "Potential Acquisition").
Further details are set out below.
Highlights
-- Click Labs specialises in email-marketing as well as
providing critical technology, tools and know-how to optimise lead
generation performance which is highly complementary to Mporium's
expertise in search, social and display marketing
-- Potential Acquisition expected to make a material positive
contribution to the Group's performance in FY2019 and onwards, and
is expected to accelerate Mporium's pathway to becoming net cash
generative
-- The initial cash consideration and Potential Acquisition and
ongoing working capital needs of the Group are proposed to be
financed by an issue of new Ordinary Shares to existing and new
investors to raise GBP1.25 million
About Click Labs
Click Labs specialises in email-marketing as well as providing
critical technology, tools and know-how to optimise lead generation
performance which is highly complementary to Mporium's expertise in
search, social and display marketing. With years of experience,
successful commercial execution and proprietary tools and
technology to accelerate Mporium's commercial capacity and
capability for both lead generation and technology licensing. Click
Labs Group has historically generated revenues through a largely
performance-based revenue model (e.g. Cost Per Potential
Acquisition and Cost Per Lead).
The Board believes that the Potential Acquisition would make a
material positive contribution to the group in FY2019 and onwards,
and is expected to accelerate Mporium's pathway to becoming net
cash generative. For the year ended 30 September 2018, Click Labs
recorded turnover of GBP1.48 million, net profit of GBP0.17 million
and had net assets of GBP0.11 million. Click Labs expects to show
combined revenue of GBP2.8 million and EBIT of GBP0.4 million for
the year to 30 September 2019.
Terms of the Potential Acquisition
The initial consideration for the Potential Acquisition will be
satisfied by the payment of GBP0.5 million in cash and the issue of
400,000,000 Ordinary Shares ("Consideration Shares"), worth GBP2
million based on an issue price per Ordinary Share of 0.5 pence.
Subsequently deferred consideration of up to GBP3 million will be
payable in cash in 8 tranches over the next 24 months based on
achievement of net profit targets. Due diligence remains ongoing in
respect of the Potential Acquisition and the Potential Acquisition
is subject to contract.
The fundraising
The Potential Acquisition, including associated costs, and the
separate ongoing working capital needs of the Company are intended
to be financed by way of placing shares (the "Subscription") to
certain existing and new investors to raise GBP1.25 million by the
issue of new Ordinary Shares of 0.5 pence each (the "Placing
Shares") at a price of 0.5 pence per Ordinary Share (the "Placing
Price").
Upon completion of the Placing, the investors will also receive
warrants ("Warrants") exercisable between 10 December 2019 and 10
December 2021 with a subscription price of 1.5 pence per Warrant
and on the basis of one Warrant for each Placing Share. The
detailed terms of the Warrants are to be finalised and agreed with
the relevant parties prior to admission of the Placing Shares and
the Consideration Shares.
Posting of shareholder circular
The Directors anticipate that 650,000,000 new Ordinary Shares
would be issued pursuant to, and upon completion of, the Placing
and Potential Acquisition. In the interests of expediency, and
notwithstanding that neither the Placing nor the Potential
Acquisition are certain to proceed at this stage, a circular (the
"Circular") seeking shareholder approval of the potential issue of
the Consideration Shares, the Placing Shares and Ordinary Shares
representing up to 20% of the issued share capital of the Company
following the allotment of the Placing Shares and the Consideration
Shares. Extracts from the circular is shown below and the Circular
will be available on the Company's website at www.mporium.com.
Cautionary statement
The Potential Acquisition remains subject to satisfactory due
diligence and contract, and therefore there can be no certainty
that the Potential Acquisition or the Placing will complete. The
Placing is not being underwritten and is conditional on receipt of
funds from investors, completion of the Potential Acquisition and
shareholder approval of the issue of the Placing Shares, the
Consideration Shares and the grant of the Warrants.
In addition to part-financing the Potential Acquisition, the
Placing is required in October 2019 to support the Group in meeting
its short-term working capital requirements. Should the Placing not
complete as expected, the Company would need urgently to consider
alternative options to address this need. Assuming the full Placing
proceeds are received, the Company believes, based on the current
expected trading performance and growth initiatives of the Group
(together with the benefits and costs associated with the Potential
Acquisition), that it has adequate working capital for at least the
remainder of the financial year. The Company is currently loss
making and is dependent on external investment and may require
further support in the future.
Further announcements will be made, as appropriate.
Mporium's Chief Executive Officer, Tom Smith, said:
"This complementary Potential Acquisition is an exciting and
transformative opportunity, and one which offers operational and
financial benefits. By incorporating the highly experienced team at
Click Labs we believe we can significantly strengthen our market
positioning in this area.
"Mporium is excited by the synergies and opportunities we hope
this transaction will bring, allowing us to further enhance and
diversify our offering. We believe that the enlarged group will
have the expertise, capability and scale to become a full-service
provider in performance marketing, offering advertisers a
significant competitive advantage and driving revenue and margin
growth across our business.
"Following the restructuring in July 2019, Mporium has a leaner
business model, with the right management in place and a clear
strategy and target market, and this Potential Acquisition is the
next step on our path to growth. I look forward to updating the
market in due course as we look to complete and integrate this
Potential Acquisition into the Group."
- Ends -
Enquiries
Mporium: 020 3841 8411
Tom Smith, Chief Executive Officer
finnCap (NOMAD / Joint Broker): 020 7220 0500
Henrik Persson / Kate Bannatyne (Corporate Finance)
Andrew Burdis (Corporate Broking)
Novum Securities Limited (Joint
Broker):
Colin Rowbury (Corporate Broking) 020 7399 9427
Yellow Jersey PR: 020 3004 9512
Sarah Hollins
Joe Burgess
Annabel Atkins
About Mporium Group PLC
Mporium is a software company delivering high performance
advertising campaigns through its proprietary technology platform,
IMPACT. Mporium delivers automation and innovation to the
advertising industry and the IMPACT platform enables customers to
identify and leverage moments when there are significant changes in
the levels of consumer engagement. Advertisers using the platform
can optimise their campaigns through event-driven marketing,
targeting audiences at the exact moments when consumer interest is
at its highest. Further information can be found at
www.mporium.com
Extracts from the Circular
Introduction
On 30 September 2019, the Company announced that it had entered
into non-binding heads of terms to acquire (the "Proposed
Acquisition") the entire issued share capitals of Click
Laboratories Limited and We Breathe Media Ltd, two companies under
substantially common ownership (together, "Click Labs") for a total
of GBP0.5 million in cash and GBP2 million in new Ordinary Shares
(the "Consideration Shares"), and additional payments (the
"Earn-Out") of up to GBP3 million to be made if specified net
profit targets are met. In addition, the Company announced that it
had conditionally raised approximately GBP1.25 million by way of
subscription, from existing and new investors, for a total of
250,000,000 new Ordinary Shares ("Subscription Shares"), at a
subscription price of 0.5 pence per Subscription Share.
Due diligence in respect of Click Labs remains ongoing and the
Proposed Acquisition is subject to contract.
Proposed Acquisition of Click Labs
The initial consideration, payable in cash on or around
completion ("Completion") of the Proposed Acquisition, will be
satisfied by the payment of GBP0.5 million in cash and the issue of
400,000,000 Ordinary Shares, worth GBP2 million based on an issue
price per Ordinary Share of 0.5 pence on Completion.
The Earn-Out is calculated as 50% of net profit after tax
generated by Click Labs, with certain adjustments to reflect agreed
intercompany arrangements. The Earn-Out will run for 24 months from
Completion and will be satisfied by payments to be made in eight
tranches over 24 months, with an adjustment to be made at the end
of each relevant financial year to reflect the year's actual net
profit after tax.
The number of Consideration Shares to be issued will be
calculated by reference to the Placing price. One half of the
Consideration Shares will be subject to a one year lock up period
and the other half will be subject to a two year lock up period
restricting any sale or transfer of these shares.
Placing
The Company has conditionally raised approximately GBP1.25
million by way of subscription for a total of 250,000,000 new
Ordinary Shares, at a subscription price of 0.5 pence per
Subscription Share.
Upon completion of the Subscription, the investors will also
receive warrants ("Warrants") exercisable between 10 December 2019
and 10 December 2021 and on the basis of one Warrant for each
Placing Share with a subscription price of 1.5 pence per Warrant.
The detailed terms of the Warrants are to be finalised and agreed
with the relevant parties prior to Admission.
Further details of the Subscription are set out below at section
below 3 headed "Details of the Fundraising".
Background and rationale for the Placing, Proposed Acquisition
and use of proceeds
Background on the Company
The Company is a software company delivering high performance
advertising campaigns through its proprietary technology platform,
IMPACT. It delivers automation and innovation to the advertising
industry and the IMPACT platform enables customers to identify and
leverage moments when there are significant changes in the levels
of consumer engagement. Advertisers using the platform can optimise
their campaigns through event-driven marketing, targeting audiences
at the exact moments when consumer interest is at its highest.
Further information can be found at www.mporium.com.
On 11 June 2019, the Company initiated a major restructuring to
refocus the business on the performance-led division, which
accounted for the majority of its revenues in the first quarter of
the current financial year. As part of this restructuring, the
Company has made the decision to streamline the Mporium Agency
offering to improve and simplify adoption of the technology by way
of improved self-serve capability. As such, the Company adopted a
licensing model and significantly reduced the managed service part
of the offering. In addition, the legacy Fast Web Media (FWM)
business was divested.
This restructuring was completed in July 2019.
Information on Click Labs
Click Labs is a digital agency focussed on the design, build and
delivery of end-to-end multi-channel lead generation campaigns.
Based in the UK, Click Labs have delivered over 2000 campaigns for
more than 300 brands in 15 markets across a range of verticals
spanning automotive, finance, claims management, sports, gaming and
healthcare. Click Laboratories Limited was incorporated in 2013 and
Click Labs has successfully built and grown a profitable
performance-based business (e.g. Cost Per Acquisition and Cost Per
Lead), driven by its years of experience in email marketing and
lead generation. Click Labs has 4 employees.
For the year ended 30 September 2018, Click Labs recorded
turnover of GBP1.48 million, net profit of GBP0.2 million and had
net assets of GBP0.11 million. Click Labs expects to show combined
revenue of GBP2.8 million and EBIT of GBP0.4 million for the year
to 30 September 2019.
We Breathe Media only commenced operations in January 2019 and
has not yet prepared financial statements. Further information will
be provided in due course.
Rationale for the Proposed Acquisition
Click Labs specialises in email-marketing as well as providing
critical technology, tools and know-how to optimise lead generation
performance which is highly complementary to Mporium's expertise in
search, social and display marketing. With years of experience,
successful commercial execution and proprietary tools and
technology to accelerate Mporium's commercial capacity and
capability for both lead generation and technology licensing.
The Board believes that the Proposed Acquisition would make a
material positive contribution for the group in FY2019 and onwards
and is expected to accelerate Mporium's pathway to becoming net
cash generative.
Mporium focuses on growing rapidly in the performance marketing
segment and building lead generation and customer acquisition
capability. Its performance division, previously named MporiumX,
was created in H2 2018 to deploy its technology within
performance-based verticals such as sports and consumer claims,
with ambition to grow into other sectors such as financial and
betting. Click Labs have traditionally focused on the same
verticals but have a stronger experience within betting and
financial verticals.
As such, the Board considers the Proposed Acquisition a
complementary bolt-on and transformative transaction, creating an
integrated end-to-end lead generation and customer acquisition
solution enabling the combined entity to become a full-service
provider lead generation provider.
The Board believes that the Proposed Acquisition would make a
material positive contribution for the group in FY2019 and onwards
and is expected to accelerate Mporium's pathway to becoming net
cash generative. In addition, The Board believe that the Proposed
Acquisition will materially enhance Mporium's product capability
and deliver strong commercial synergies over and beyond the
combination of the two teams.
Further, it is anticipated that the combined businesses will
relocate to new offices in January 2020, thereby reducing the
annual group operating expenses run-rate to around GBP3 million,
which is less than 50% of the Company's run-rate prior to the
recent restructuring and Proposed Acquisition.
Use of proceeds
The net proceeds of the Placing will be used by the Company
principally to finance the cash element of the consideration due in
respect of the Proposed Acquisition, together with associated
transaction costs, and to provide additional working capital for
the enlarged business.
Details of the Fundraising
The Company proposes to raise gross proceeds of GBP1,250,000
through the issue of the Subscription Shares at the Subscription
Price to certain investors. The Subscription Price represents a
discount of 40 per cent. to the closing middle market price of 0.84
pence on 27 September 2019, being the last practicable date prior
to the Company's announcement of 30 September 2019. The
Subscription Shares will represent 19.3 per cent. of the Company's
Enlarged Share Capital immediately following Admission.
In addition, conditional on Admission and Completion, the
relevant investors will also be granted Warrants over Ordinary
Shares exercisable between 10 December 2019 and 10 December 2021
with an exercise price of 1.5 pence per Ordinary Share.
The Board believes that raising equity finance using the
flexibility provided by a non-pre-emptive placing is the most
appropriate and optimal structure for the Company in the
circumstances.
The Subscription Shares and the Consideration Shares when issued
will rank pari passu with the Ordinary Shares and will rank in full
for any dividends and distributions paid or made in respect of the
Ordinary Shares following Admission.
Application will be made for the Subscription Shares and the
Consideration Shares to be admitted to trading on AIM. It is
expected that dealings in the Subscription Shares will commence on
AIM on 25 October 2019.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
ACQSEEEEUFUSEFU
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September 30, 2019 02:03 ET (06:03 GMT)
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