RNS Number : 2172A
Formjet PLC
30 July 2008
30 July 2008
FORMJET PLC
('FORMJET' OR 'THE COMPANY')
(AIM:FMJ)
PLACING TO RAISE £900,000
New monies to fund £1.2m acquisition
Formjet plc, the AIM listed alternative software vendor, announces today that it has
placed 120,000,000 new ordinary shares at a price
of 0.75p per share, to raise £900,000, before expenses. The new monies will be used to fund
an acquisition, subject to due diligence. The
balance of the monies will cover the costs of the fund raising and acquisition, and will be
used to strengthen the balance sheet of the
target. It is anticipated that the acquisition will complete on or around 18 August 2008 and
an option to purchase the company has been
agreed.
The target is a specialist distribution company, with a significant customer base of IT
resellers and independent retailers. Further
information, including the name of the target, will be announced in due course.
HIGHLIGHTS
* £900,000 raised via placing at a price of 0.75p per share;
* Significant proportion of shares placed with institutions, boosting Formjet's
shareholder base;
* New monies to fund acquisition of specialist distribution company for up to £1.2m
with an initial payment of £400,000;
* The enlarged group will benefit from cost savings in warehousing and financing;
* The target has an established record of profitability and greatly increases the
scale of Formjet; and
* The acquisition will be earnings enhancing.
The proposed target is a specialist distribution company that has a significant customer
base of IT resellers and independent retailers.
For the year ended 30 November 2007 the target's unaudited numbers revealed profit before
taxation of approximately £358,731 on turnover
of approximately £12,599,859. Net assets as at 30 November 2007 were £706,874.
The acquisition has a mechanised and computerised modern distribution depot and will
provide significant cost savings to the enlarged
group in both warehousing and financing. It is based in the east of England and also has
premises in the northwest.
The initial payment for the acquisition is £400,000 comprising of £200,000 in cash with
the balance comprising 10,000,000 Formjet shares
at an issue price of 2p ("Vendor Shares"). Further payments up to a maximum of £800,000 will
be made on a performance-related basis on a
two-year earnout. The earnout will be self financing.
The Company will announce results for the six months ending 30 June 2008 on 30 September
2008.
Application has been made for the Admission of the 120,000,000 new ordinary shares to
trading on the AIM market. The new ordinary shares
will rank pari passu with the existing new ordinary shares of the Company, and dealing of the
new ordinary shares is expected to commence on
06 August 2008.
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ENQUIRIES
Formjet plc Tel: 01293 848 860
Lyndon Chapman, Executive
Chairman
Tony Lee, Chief Executive
Nominated Adviser to Formjet plc Tel: 020 7492 4777
Dowgate Capital Advisers Limited
David Newton
Joint Brokers to Formjet plc Tel: 020 7493 8188
Old Park Lane Capital plc
Michael Parnes
Joint Brokers to Formjet plc Tel: 01293 517 744
Dowgate Capital Stockbrokers
Limited
Dru Edmonstone/Philip Dumas
Financial PR Tel: 0207 562 3350
Bishopsgate Communications
Limited
Maxine Barnes / Nick Rome
www.bishopsgatecommunications.
com
Notes to Editors:
Formjet plc
Formjet plc is a UK-based company with a highly distinctive business model. It acquires
territorial rights to 'alternative' software
products, and markets, sells, distributes and supports these products in place of the vendor
in worldwide markets. The strategy has at its
heart the proposition that the Company can acquire product lines in territories of at least
one country without the expense of either
product development or the creation of IPR. The Formjet Group currently has three focussed
strategies:
Alternative Products
* Panda Software (UK) distributes Panda Software antivirus and security products in
the UK. With its high margins and recurring
annual renewal revenues, Panda is a major contributor to the Group's sales and profitability.
* Ability Software International distributes a powerful suite of office products which
form an integral part of the white label
opportunities that Formjet is creating. Ability Software International has also developed the
ASI Business Software range. This comprises
eight titles, which include fully comprehensive office and graphics suites, internet security,
a business plan development application,
small business accounting, appointment book management and staff records management software.
* EdAlive edutainment software will open up a new and growing market for Formjet and
will cover a range of subjects including maths,
word skills and spelling
Alternative Routes to Market
* Formjet Innovations is the specialist distribution arm of the Formjet Group focusing
on its alternative product range and
associated alternative routes to market. The focus here is on creating 'white label' software,
targeting retail and brand leaders.
* Research & Expansion - the focus here is on targeting new product ranges and
potential acquisitions as Formjet builds on recent
business wins with Tesco, Dell, Woolworths and Jungle247. With the ongoing opportunities of
launching new alternative products, and the need
to expand/refresh the current products, research and expansion will play an important role in
developing the business.
* Education and System Builders - With the launch of the new ASI Ability office
products providing fully featured, compatible and
cost effective functionality, Formjet intends to aggressively target both the educational and
system builder markets, which in both sectors
maximising value for spend is of paramount importance.
This information is provided by RNS
The company news service from the London Stock Exchange
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