TIDMIMX
RNS Number : 6129S
IMS Maxims PLC
21 May 2009
21 May 2009
IMS Maxims Plc
("IMS" or the "Company")
Proposed Disposal of Subsidiaries
Update on Trading
Adoption of Investing Policy
and
Notice of General Meeting
The Company today announces that it has signed a conditional agreement for the
proposed sale of the entire issued share capital of IMS Holdings and the
Company's holding in IMS Computers to Integrated Medical for an aggregate
consideration of approximately GBP2.4 million. Integrated Medical will also
assume certain debts amounting to approximately GBP8.4 million, giving an
Enterprise Value for IMS Holdings and IMS Computers of approximately GBP10.8
million, in aggregate. Following Completion the Company will have net assets of
approximately GBP1.0 million and zero borrowings. Integrated Medical is 50 per
cent. owned by Mr Brian Ennis, the Company's Chief Executive and a substantial
Shareholder.
As the effect of the Disposal will be to divest the Company of all of its
trading businesses and activities, the Disposal constitutes a fundamental change
of business under Rule 15 of the AIM Rules and, upon Completion, the Company
will be treated as an Investing Company. The Disposal is also a substantial
property transaction for the purposes of section 190 of the 2006 Act. The
Disposal therefore requires the approval of Shareholders in a general meeting at
which Shareholders will be asked also to approve the Investing Policy for the
Company going forward, details of which are set out below.
Current Trading
The Company continues to experience uncertainties in the environment within
which it operates. The NPfIT has been beset by continuing problems since it was
launched in 2002 and is now several years behind schedule. As stated at the time
of the Company's interim results on 15 December 2008, the supplier framework
agreements introduced by Connecting for Health in 2008 under their Additional
Supply Capability and Capacity programme have failed to simplify the contracting
process for the Company or to deliver new business to the Company in any
quantity. The Directors believe that the complex arrangements between Connecting
for Health and the two Local Service Providers, BT Global Services and CSC,
continue to make it extremely difficult for small suppliers to make progress in
the sector.
The Company has continued to make some progress with the private healthcare
providers in the UK and new opportunities are being sought abroad, initially in
the Middle East. Revenues for the twelve months to 31 March 2009 are expected to
be marginally ahead of the previous year (2008: GBP4.73 million) with the
Company benefiting from the two small acquisitions made during 2008. Although
gross margins improved, this was partially offset by increased operating costs
(2008: GBP3.3 million) with the result that the Company's operating results are
expected to be ahead of last year (2008: GBP0.7 million). Interest costs
continued to increase as the Company's net debt continued to grow with net
profit after tax slightly ahead of 2008 (2008: GBP10,000) but still
substantially down on 2007 (2007: GBP498,000).
The increase in debt is a key issue for the Company. Although operating profits
are sufficient to meet the interest payments on the debt burden, the Company's
cash flow is insufficient to permit the repayment of any of the principal
amounts outstanding. In October 2008 the Company raised a further GBP2m of debt
in order to meet certain repayment obligations and the net debt of the Group
currently stands at approximately GBP9.6 million (31 March 2008: GBP9.4
million).
The Company will announce its final results for the period in September 2009, in
line with historic practice.
Background to and reasons for the Disposal
Since 1999, the strategy and focus of the Company has been to develop and supply
software for use by the health services in both the UK and Ireland. In England,
the Directors believe that the Group can now offer a means of delivering "The
Clinical 5", priority applications described in last year's NHS Informatics
Review.
However, as outlined above and in common with other small software companies,
the Company has struggled to achieve organic growth in its primary markets. In
England, the situation in the NHS remains unclear, as described above. In
Ireland, the general deterioration in State finances has placed considerable
pressure on all Government bodies, including the Health Services Executive and
all indications are that this situation is unlikely to improve in the short to
medium term.
In addition, the Company's weak share price has limited the Company's ability to
grow through acquisitions. In 2008 the Company completed two small transactions:
the acquisition of Preview Health Limited in 18 March 2008, and the acquisition
of certain assets of CSW Healthcare Limited in December 2008 but the Directors
believe that it has been impracticable to contemplate larger acquisitions
without incurring an unacceptably high level of dilution for Shareholders. The
only alternative would have been to take on additional debt to finance such
acquisitions but given the Group's existing debt levels the Directors felt such
a course of action would not have been prudent.
On 19 January 2009 the Company re-organised its share capital on the basis of
one new Ordinary Share for every 50 old ordinary shares. It was hoped that this
exercise would result in enhanced liquidity in the Company's shares. However,
there has been no noticeable improvement in liquidity since then and the share
price has fallen to approximately 15 pence from 27 pence at the time of the
consolidation.
In summary, the Directors believe that the Group cannot reasonably anticipate a
transformation in its prospects for rapid growth in its core business in Ireland
and the UK, whether organic or acquisitive, and with the growing burden of the
increasing debt levels, the Directors believe that other options need to be
considered to create Shareholder value.
The Directors have explored a number of opportunities over the last twelve
months, however, none of them have progressed beyond the initial conversations.
The Directors believe that without the potential for strong growth the Company's
share price will continue to deteriorate and that a better course of action
would be to dispose of the Company's current business and transform the Company
into an Investing Company. It is for this reason that the proposed Disposal is
being recommended for Shareholder approval.
The Disposal
The Company has agreed, subject to the satisfaction of the Conditions, to
dispose of both the entire issued share capital of IMS Holdings and the
Company's holding in IMS Computers to Integrated Medical. As described above,
the Group's business has been to develop and supply software for use by the
health services in both the UK and Ireland. IMS Holdings and IMS Computers are
the Company's only operating subsidiaries and generate all the revenues and
profits of the Group. Following the Disposal, the Company will have no
subsidiaries and will be simply a cash shell with a quotation on AIM, otherwise
known as an Investing Company.
The table below has been extracted from the consolidated results for IMS
Holdings and IMS Computers for the year to 31 March 2008 and from the unaudited
management accounts for the year to 31 March 2009.
+------------------------------------------------+--------------+-----------+
| | Year to 31 | Year to |
| | March 2008 | 31 March |
| | Audited | 2009 |
| | | Unaudited |
+------------------------------------------------+--------------+-----------+
| | GBP'000 | GBP'000 |
+------------------------------------------------+--------------+-----------+
| Revenue | 4,734 | 5,147 |
+------------------------------------------------+--------------+-----------+
| Gross Profit | 4,034 | 4,730 |
+------------------------------------------------+--------------+-----------+
| EBITDA | 851 | 1,186 |
+------------------------------------------------+--------------+-----------+
Note: The results for the twelve months to 31 March 2009 are drawn from the
unaudited management accounts. These results have not been reviewed by the
Company's auditors and may be subject to change as a result of the audit
process. These results are not to be treated as a profit forecast for the Group
as a whole and have been supplied only to provide an indication of the
performance of IMS Holdings and IMS Computers for the twelve months to 31 March
2009.
Under the terms of the Disposal Agreement, and subject to the satisfaction of
the Conditions, Integrated Medical will pay an aggregate consideration of
approximately GBP2.4 million of which approximately GBP2.1 million will be in
cash and GBP0.3 million will be in the form of the Loan Note. Of the cash
consideration of approximately GBP2.1 million, GBP1.0 million will be used to
repay the Mansard Loan Note and approximately GBP0.4 million will be used to
clear all inter-company debts between the Company and its subsidiaries
outstanding at the date of Completion. In addition, Integrated Medical will
assume all other debts of the Group, which currently stand at approximately
GBP8.4 million. Mansard has also agreed to waive the accrued interest on the
Mansard Loan Note amounting to approximately GBP0.3 million. The result of the
Disposal should be to leave the Company with no borrowings and net assets of
around GBP1.0 million. The Disposal values IMS Holdings and IMS Computers, in
aggregate and including all assumed debts, at approximately GBP10.8 million,
giving an EV/EBITDA ratio of approximately 9.1x.
Following the Disposal the Company expects to have a net asset value per share
of approximately 19.8 pence, representing a premium of 46.1 per cent. to the
middle closing price of 13.5 pence on 19 May 2009, being the last practical day
prior to the publication of the Circular and a 33.6 per cent. premium to the
average middle closing price over the sixty days prior to the publication of the
Circular.
The Loan Note shall carry a coupon of 10 per cent., payable monthly in arrears,
(which increases to 12.5 per cent. if payment of the interest is deferred) and
shall be for a period of 5 years, unless repaid in full (together with any
accrued interest) by the Purchaser. The Loan Note will be secured with a fixed
and floating charge on the Purchaser's holdings in IMS Holdings and in IMS
Computers and on the intellectual property of certain members of the Purchaser
Group.
In the event that the Company invests, or commits to invest, GBP525,000 in
accordance with the Investing Policy, being approximately 75 per cent. of the
cash on the Company's balance sheet post Completion (expected to be
approximately GBP0.7 million), then the Company shall have the right to demand
an early repayment of the Loan Note, together with any accrued interest
thereon.If the Purchaser creates another security ranking pari passu or in
priority to the security being created in conjunction with the Disposal, the
interest rate applicable to the Loan Note shall be increased to 12.5 per cent.
(and 15 per cent. if the payment of interest is deferred).
In addition, the Purchaser has agreed that:
(A) in the event that within a period of 2 years from the date of Completion
either the Purchaser, or any member of the Purchaser Group, enters into, or
agrees to enter into, a Sale for a value in excess of GBP12.96 million, being
120 per cent. of the Enterprise Value, then the Further Consideration due shall
be;
(i) in the first twelve months, 40 per cent. of the excess; and
(ii) in the second twelve months, 20 per cent. of the excess;
(B) in the event that the Purchaser Group generates Profits;
(i) in excess of GBP3.0 million for the twelve months to 31 March 2010, then
the Purchaser shall pay 40 per cent. of any excess to the Company; and
(ii) in excess of GBP4.5 million for the twelve months to 31 March 2011, then
the Purchaser shall pay 20 per cent. of any excess to the Company.
To the extent that any payment is made, or due to be made, under paragraph (A),
no further payments shall be made to the Company under paragraph (B).
The only warranties provided by the Company under the Disposal Agreement relate
to the ownership of the shares being acquired by the Purchaser. The Company has
also agreed not to compete with the business of the Purchaser Group in either
the UK or Ireland for a period of two years following Completion.
The Company's balance sheet as at 30 September 2008 included an amount of GBP5.4
million in relation to its investments in IMS Holdings and IMS Computers. Under
the terms of the Disposal, this will result in a charge to the Company's income
statement for the current financial year of approximately GBP3.0 million,
although this will be partially offset by a write back of GBP0.3 million
resulting from the write back of the forgiven interest on the Mansard Loan.
Use of Proceeds
The net proceeds of the Disposal after redeeming the Mansard Loan Note and
various inter-company debts are expected to amount to GBP1.0 million (net of any
expenses) and will be used to fund the ongoing costs of the Company as an AIM
quoted Investing Company and the implementation of the proposed Investing
Policy.
The annual operating costs of the Company following Completion will be limited
to approximately GBP80,000, being the costs of the Continuing Directors and the
expenses of being a company quoted on AIM.
Pro Forma Statement of Net Assets of the Company
The following table sets out an unaudited pro-forma statement of the net assets
of the Company as if the Disposal had taken place as at 30 September 2008. The
table has been prepared for illustrative purposes only and, because of its
nature, may not give a true reflection of the financial position of the Company
immediately following the Disposal. It is based on the unaudited consolidated
balance sheet of the Group as set out in the interim results for the period
ended 30 September 2008 approved by the Company's board of directors on 15
December 2008 as adjusted in accordance with the notes set out below:
+---------------------------+--------------+----------+---------------+-----------+
| | Unaudited | Effect | Deferred | Pro Forma |
| | Consolidated | of | consideration | net |
| | Group as at | disposal | | assets |
| | 30 | | | 30 |
| | September | | | September |
| | 2008 | | | 2008 |
+---------------------------+--------------+----------+---------------+-----------+
| | (note i) | (note | (note iii) | |
| | | ii) | | |
+---------------------------+--------------+----------+---------------+-----------+
| | GBP000's | GBP000's | GBP000's | GBP000's |
+---------------------------+--------------+----------+---------------+-----------+
| ASSETS | | | | |
+---------------------------+--------------+----------+---------------+-----------+
| Non-current assets | | | | |
+---------------------------+--------------+----------+---------------+-----------+
| Property, plant and | 51 | (51) | - | - |
| equipment | | | | |
+---------------------------+--------------+----------+---------------+-----------+
| Intangible assets | 3,811 | (3,811) | - | - |
+---------------------------+--------------+----------+---------------+-----------+
| Trade and other | 942 | (942) | - | - |
| receivables | | | | |
+---------------------------+--------------+----------+---------------+-----------+
| Total | 4,804 | (4,804) | - | - |
+---------------------------+--------------+----------+---------------+-----------+
| Current assets | | | | |
+---------------------------+--------------+----------+---------------+-----------+
| Trade and other | 2,966 | (2,966) | 324 | 324 |
| receivables | | | | |
+---------------------------+--------------+----------+---------------+-----------+
| Loan notes receivable | - | 300 | - | 300 |
+---------------------------+--------------+----------+---------------+-----------+
| Cash and cash equivalents | 255 | 455 | - | 700 |
+---------------------------+--------------+----------+---------------+-----------+
| Total | 3,221 | (2,221) | 324 | 1,324 |
+---------------------------+--------------+----------+---------------+-----------+
| | | | | |
+---------------------------+--------------+----------+---------------+-----------+
| Total assets | 8,025 | (7,025) | 324 | 1,324 |
+---------------------------+--------------+----------+---------------+-----------+
| LIABILITIES | | | | |
+---------------------------+--------------+----------+---------------+-----------+
| Non-current liabilities | | | | |
+---------------------------+--------------+----------+---------------+-----------+
| Borrowings | 5,709 | (5,709) | - | - |
+---------------------------+--------------+----------+---------------+-----------+
| Deferred tax liabilities | 48 | (48) | - | - |
+---------------------------+--------------+----------+---------------+-----------+
| Current liabilities | | | | |
+---------------------------+--------------+----------+---------------+-----------+
| Trade and other payables | 3,306 | (3,306) | 324 | 324 |
+---------------------------+--------------+----------+---------------+-----------+
| Borrowings | 2,809 | (2,809) | - | - |
+---------------------------+--------------+----------+---------------+-----------+
| Total liabilities | 11,872 | (11,872) | 324 | 324 |
+---------------------------+--------------+----------+---------------+-----------+
| | | | | |
+---------------------------+--------------+----------+---------------+-----------+
| NET ASSETS | (3,847) | 4,847 | - | 1,000 |
+---------------------------+--------------+----------+---------------+-----------+
Notes:
(i) The unaudited consolidated net assets of the Group at 30 September 2008
have been extracted without adjustment from the Group's interim results for the
period ended 30 September 2008
(ii) The adjustment reflects the sale of the entire issued share capital of
IMS Holdings and IMS Computers such that all of the Group's operating assets,
liabilities and operations are disposed of
(iii) Deferred consideration equal to the aggregate of all amounts due to and
from the Company from group undertakings at the date of completion, based on the
Company's balance sheet as at 30 September 2008 and the settlement of the
intercompany indebtedness
(iv) No account has been taken of trading since 30 September 2008, nor any
other events save as disclosed above
Change of accounting reference date
Immediately following Completion, the Company intends to change its accounting
reference date to 30 June by extending the current financial year by three
months from 31 March 2009. This will align the start of the next accounting
period with the start of the Company's life as an Investing Company.
Despite this change in the accounting reference date, there will be no immediate
change to the Company's reporting timetable and the Continuing Directors expect
to issue the final results for the period to 30 June 2009 by the end of
September 2009.
Board Changes
It is the intention, conditional upon the Disposal being approved, that David
Macdonald, the Chairman of the Company, and Brian Ennis and Terry Fossey, two of
the Directors, will all step down from the Board immediately upon Completion.
Peter Holmes and Stephen Casey will continue as Directors and will have the
responsibility of implementing the Investing Policy to be adopted by the Company
on Completion. Peter Holmes will be appointed Chairman of the Board. The
Continuing Directors will each be paid GBP15,000 per year for 4 days per month
and a further GBP350 for each extra day of work thereafter.
Investing Policy
Rule 15 of the AIM Rules states that where the effect of a proposed disposal is
to divest the AIM company of all, or substantially all, of its trading business
activities, the company will be treated as an Investing Company. The Investing
Policy to be implemented following the Disposal is set out below and will
require the approval of Shareholders at the General Meeting. The Company will
then have to implement the Investing Policy, or otherwise make an acquisition or
acquisitions which constitute a reverse takeover under Rule 14 of the AIM Rules,
within twelve months of having received such consent from Shareholders, failing
which the Company's shares will be suspended from trading on AIM.
The Continuing Directors intend to focus on investing in businesses which, in
the opinion of the Continuing Directors, possess the opportunity for high
growth, generally through exploitation of intellectual property. The main focus
for identifying such businesses will be in the communications, energy, resources
and infrastructure sectors in diverse geographic locations including Europe and
North America. The Continuing Directors anticipate that each such business will
have the management necessary to operate and develop that business.
The intention is to develop a diverse portfolio of such opportunities and the
Company is likely to raise further capital, either by way of debt or equity
issues, once it has invested a significant proportion of its initial asset base.
The investments will be structured using both debt and/or equity instruments,
and derivatives thereof. The Company may act as either a passive or an active
investor. In the latter case, the Continuing Directors anticipate being able to
charge management and other advisory fees.
The Continuing Directors expect that each investment will be held for
approximately four years, with exits being achieved by way of a trade sale or
flotation. Initially, the proceeds arising from these exits will be re-invested
in building the capital base of the Company.
Following Completion, and whilst the Continuing Directors are considering
potential investment opportunities, the net cash proceeds of the Disposal may be
invested in short dated debt securities.
The Continuing Directors believe that their broad collective experience together
with their extensive network of contacts will assist them in the identification,
evaluation and funding of investment opportunities. When necessary, other
external professionals will be engaged to assist in the due diligence of
prospective targets. The Continuing Directors would also consider appointing
additional directors with relevant experience if required.
The Continuing Directors recognise the Investing Policy outlined above carries a
high degree of risk, however they believe that the successful prosecution of
such an Investing Policy will result in strong capital growth for Shareholders.
Shareholders are asked to approve the Investing Policy at the General Meeting.
Pursuant to the AIM Rules, the Company will be required to make an acquisition
or acquisitions which constitute a reverse takeover in accordance with Rule 14
of the AIM Rules or otherwise implement the Investing Strategy approved at the
GM to the satisfaction of the London Stock Exchange within 12 months of having
received the consent of Shareholders, failing which, the Company's trading
facility on AIM will be suspended followed by cancellation of its AIM listing.
Options and Warrants
As at the date of the Circular, the Company has in issue outstanding Options
over 347,145 new Ordinary Shares, representing 6.8 per cent. of the Issued Share
Capital, all with an exercise price of 100p per Ordinary Share. Of these
outstanding Options, 126,000 have been granted to Directors (of which 30,000
have been granted to the Continuing Directors) and the majority of the remainder
have been granted to certain employees of IMS Holdings.
The rules of the schemes under which Options have been granted to Directors and
Employees state that optionholders need to be employed by a company within the
Group in order to exercise their options. Thus, following Completion, 253,845
Options will lapse leaving 93,300 Options outstanding. In addition, the Company
intends to grant options to the Continuing Directors over 400,000 new Ordinary
Shares, in aggregate, representing 7.9 per cent. of the Issued Share Capital.
The Company also received notice from Mansard waiving any rights to subscribe
for new Ordinary Shares under the Warrants.
Change of name
On Completion, it is intended that the Company will change its name to Lagan
Capital plc. The Company will also change its web site to www.lagancapital.com.
Related party transaction
The Purchaser is 50 per cent. owned by Brian Ennis, who is a Director and major
Shareholder. In addition all of the other Directors, with the exception of Peter
Holmes (who is therefore deemed to be an Independent Director), will, or may be,
connected to the Purchaser following Completion. As such the Disposal is deemed
to be a related party transaction under Rule 13 of the AIM Rules.
In accordance with the AIM Rules, the Independent Director has considered the
terms of the Disposal and, having consulted with Dowgate Capital Advisers
Limited, being the Company's Nominated Adviser, is satisfied that those terms
are fair and reasonable insofar as the Company's shareholders are concerned.
General Meeting
The Circular is being posted to shareholders today to convene a general meeting
for 11.00 am on 8 June 2009. The Circular will also be available on the
Company's web site; www.imsmaxims.com
The Company has received irrevocable undertakings to vote in favour of the
Resolutions from certain Shareholders, including the Independent Director and
Directors and Shareholders connected to the Purchaser, amounting to
2,724,750 Ordinary Shares in aggregate, representing approximately 53.75 per
cent. of the Issued Share Capital.
For further information, please contact:
+---------------------------------+---------------------+------------------+
| IMS Maxims plc | Sandymount | Tel: 01908 |
| Peter Holmes - Independent | Station Road | 588800 |
| Director | Woburn Sands | Fax: 01908 |
| | MK17 8RR | 588819 |
+---------------------------------+---------------------+------------------+
| | | |
+---------------------------------+---------------------+------------------+
| Dowgate Capital Advisers | 46 Worship Street | Tel: 020 7492 |
| Limited | London | 4777 |
| Liam Murray / Antony Legge | EC2A 2EA | |
| | | |
+---------------------------------+---------------------+------------------+
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
+--------------------------------------------------+---------------------+
| | 2009 |
+--------------------------------------------------+---------------------+
| Latest time and date for receipt of Forms of | 11.00 am on 6 June |
| Proxy | |
+--------------------------------------------------+---------------------+
| General Meeting | 11.00 am on 8 June |
+--------------------------------------------------+---------------------+
| Expected date of Completion | 8 June |
+--------------------------------------------------+---------------------+
All references in the table above are to London times unless otherwise stated.
If any details contained in the timetable above should change, the revised times
and dates will be notified by means of an announcement through a Regulatory
Information Service.
DEFINITIONS
The following definitions apply throughout this announcement, unless the context
requires otherwise:
+--------------------+---------------------------------------------------+
| "1985 Act" | the Companies Act, 1985 (as amended) |
+--------------------+---------------------------------------------------+
| "2006 Act" | the relevant provisions of the Companies Act, |
| | 2006 which are in force as at the date of the |
| | Circular |
+--------------------+---------------------------------------------------+
| "Acts" | the 1985 Act and the 2006 Act |
+--------------------+---------------------------------------------------+
| "AIM" | the market of that name operated by the London |
| | Stock Exchange |
+--------------------+---------------------------------------------------+
| "AIM Rules" | the AIM Rules for Companies as published by the |
| | London Stock Exchange from time to time |
+--------------------+---------------------------------------------------+
| "Circular" | The circular being posted to shareholders on 21 |
| | May 2009 in respect of the proposed Disposal and |
| | incorporating the Notice |
+--------------------+---------------------------------------------------+
| "Companies Act | the Companies Act 1963 of Ireland (as amended) |
| 1963 (Ireland)" | |
+--------------------+---------------------------------------------------+
| "Company" | IMS Maxims plc |
+--------------------+---------------------------------------------------+
| "Completion" | completion of the Disposal pursuant to the terms |
| | of the Disposal Agreement |
+--------------------+---------------------------------------------------+
| "Conditions" | the conditions for Completion, as contained in |
| | the Disposal Agreement, including, inter alia; |
| | (i) the approval of Shareholders at the General |
| | Meeting; and |
| | (ii) the approval of the shareholders of |
| | Integrated Medical in respect of section 60 of |
| | the Companies Act 1963 (Ireland), which is |
| | expected to occur at approximately the same time |
| | as the General Meeting; |
+--------------------+---------------------------------------------------+
| "Consideration" | approximately GBP2.4 million, of which |
| | approximately GBP2.1 million is payable in cash |
| | and GBP0.3 million in the form of a Loan Note |
+--------------------+---------------------------------------------------+
| "Continuing | Mr Stephen Casey and Mr Peter Holmes |
| Directors" | |
+--------------------+---------------------------------------------------+
| "Deferred Shares" | deferred shares of GBP245.00 each in the capital |
| | of the Company |
+--------------------+---------------------------------------------------+
| "Directors" or | directors of the Company, being Mr David |
| "Board" | MacDonald, Mr Brian Ennis, Mr Terry Fossey, Mr |
| | Stephen Casey and Mr Peter Holmes |
+--------------------+---------------------------------------------------+
| "Disposal" | the conditional disposal by the Company to the |
| | Purchaser of the entire issued share capital of |
| | IMS Holdings and of IMS Computers pursuant to the |
| | terms of the Disposal Agreement |
+--------------------+---------------------------------------------------+
| "Disposal | the agreement dated 20 May 2009 between the (1) |
| Agreement" | Company and (2) Integrated Medical in relation to |
| | the Disposal |
+--------------------+---------------------------------------------------+
| "Dowgate" | Dowgate Capital Advisers Limited |
+--------------------+---------------------------------------------------+
| "EBITDA" | earnings before interest, tax, depreciation and |
| | amortisation |
+--------------------+---------------------------------------------------+
| "Enterprise Value" | approximately GBP10.8 million, being the |
| or "EV" | aggregate of the Consideration and those debts |
| | held by IMS Holdings and IMS Computers which will |
| | be assumed by the Purchaser (which are estimated |
| | at GBP8.4 million) |
+--------------------+---------------------------------------------------+
| "Form of Proxy" | the form of proxy set out at the end of the |
| | Circular for use in connection with the General |
| | Meeting |
+--------------------+---------------------------------------------------+
| "FSA" | the Financial Services Authority |
+--------------------+---------------------------------------------------+
| "FSMA" | the Financial Services and Markets Act 2000 (as |
| | amended) |
+--------------------+---------------------------------------------------+
| "Further | further consideration to be paid pursuant to the |
| Consideration" | Disposal Agreement in the event that the certain |
| | criteria are met, as described in paragraph 4 of |
| | the Circular |
+--------------------+---------------------------------------------------+
| "GM" or "General | the general meeting of the Company convened for |
| Meeting" | 11.00 am on 8 June 2009 |
+--------------------+---------------------------------------------------+
| "Group" | the Company and its subsidiaries |
+--------------------+---------------------------------------------------+
| "IFRS" | International Financial Reporting Standards |
+--------------------+---------------------------------------------------+
| "IMS Computers" | Irish Medical Systems (Computers) Limited, a |
| | subsidiary of IMS Holdings |
+--------------------+---------------------------------------------------+
| "IMS Holdings" | Irish Medical Systems (Holdings) Ltd, a wholly |
| | owned subsidiary of the Company |
+--------------------+---------------------------------------------------+
| "Independent | Peter Holmes |
| Director" | |
+--------------------+---------------------------------------------------+
| "Integrated | Integrated Medical Software Limited, a company |
| Medical" or | incorporated in Ireland on |
+--------------------+---------------------------------------------------+
| the "Purchaser" | 14 November 2007 with registered number 0449033 |
+--------------------+---------------------------------------------------+
| "Investing | as defined under the AIM Rules |
| Company" | |
+--------------------+---------------------------------------------------+
| "Investing Policy" | the investing policy of the Company following |
| | Completion, as described in paragraph 9 of the |
| | Circular |
+--------------------+---------------------------------------------------+
| "Ireland" | the Republic of Ireland |
+--------------------+---------------------------------------------------+
| "Issued Share | the 5,069,500 Ordinary Shares in issue as at the |
| Capital" | date of the Circular |
+--------------------+---------------------------------------------------+
| "Loan Note" | the GBP300,000 secured loan note, with a coupon |
| | of 10 per cent., issued by the Purchaser to the |
| | Company as part of the Consideration, further |
| | details of which are set out in paragraph 4 of |
| | the Circular |
+--------------------+---------------------------------------------------+
| "London Stock | London Stock Exchange plc |
| Exchange" | |
+--------------------+---------------------------------------------------+
| "Mansard" | Mansard Limited, a substantial shareholder of the |
| | Company |
+--------------------+---------------------------------------------------+
| "Mansard Loan | GBP1 million secured loan notes with a 7 per |
| Note" | cent. coupon issued to Mansard in 2005 |
+--------------------+---------------------------------------------------+
| "Notice" | the notice convening the General Meeting as set |
| | out in the Circular |
+--------------------+---------------------------------------------------+
| "Official List" | the official list of the UK Listing Authority |
+--------------------+---------------------------------------------------+
| "Options" | the options over 347,145 new ordinary shares in |
| | existence and outstanding as at the date of the |
| | Circular |
+--------------------+---------------------------------------------------+
| "Ordinary Shares" | the ordinary shares of 1p each in the capital of |
| | the Company |
+--------------------+---------------------------------------------------+
| "Profits" | the audited consolidated profits after tax of the |
| | Purchaser Group, prepared in accordance with IFRS |
| | and assuming a standard rate of UK corporation |
| | tax |
+--------------------+---------------------------------------------------+
| "Purchaser Group" | the Purchaser and its subsidiaries |
+--------------------+---------------------------------------------------+
| "Regulatory | a regulatory information service provider |
| Information | approved by the FSA |
| Service" or "RIS" | |
+--------------------+---------------------------------------------------+
| "Resolutions" | the resolutions set out in the Notice, as |
| | summarised below: |
| | 1.to approve the disposal of the Company's |
| | shareholdings in IMS Holdings and IMS Computers |
| | for the purpose of Rule 15 of the AIM Rules and |
| | s190 of the 2006 Act; |
| | 2. to adopt the Investing Policy as set out in |
| | paragraph 9 above; |
| | 3. to increase the authorised share capital of |
| | the Company from GBP4,450,000 to GBP9,900,000 by |
| | the creation of 500,000,000 Ordinary Shares and |
| | 20,000 Deferred Shares; |
| | 4. to grant the Directors the authority to |
| | issue and allot relevant securities up to an |
| | aggregate nominal amount of GBP253,475 under |
| | section 80 of the 1985 Act; |
| | 5. to grant the Directors the authority |
| | pursuant to section 95 of the 1985 Act to allot |
| | equity securities for cash without the |
| | application of section 89 of the 1985 Act |
| | requiring the Company to offer shares to existing |
| | shareholders on a pre-emptive basis in respect |
| | of: |
| | a) offers of relevant securities to existing |
| | Shareholders where such offer is made in |
| | proportion to existing holdings; and |
| | b) the issue of equity securities up to an |
| | aggregate nominal amount of GBP50,965 other than |
| | in accordance with paragraph (a) above, which |
| | represents approximately 100 per cent. of the |
| | Issued Share Capital; and |
| | 6. to change the Company's name to Lagan |
| | Capital Plc |
+--------------------+---------------------------------------------------+
| "Sale" | any transaction or series of transactions by |
| | which any person or group of persons acting in |
| | concert (i) purchases or otherwise acquires (or |
| | becomes entitled to purchase or otherwise |
| | acquire) the share capital of the Purchaser |
| | and/or its subsidiaries carrying 50 per cent. or |
| | more of the voting rights or (ii) purchases (or |
| | becomes entitled to purchase whether by sale, |
| | transfer, lease or licence) the whole or |
| | substantially the whole of the assets and/or the |
| | business of the Group; |
+--------------------+---------------------------------------------------+
| "Shareholder(s)" | holder(s) of Ordinary Shares |
+--------------------+---------------------------------------------------+
| "subsidiary" | shall have the meaning given in section 1162 of |
| | the 2006 Act |
+--------------------+---------------------------------------------------+
| "UK Listing | a division of the FSA acting as a competent |
| Authority" | authority for the purposes of Part IV of FSMA |
+--------------------+---------------------------------------------------+
| "United Kingdom" | the United Kingdom of Great Britain and Northern |
| or "UK" | Ireland |
+--------------------+---------------------------------------------------+
| "Warrants" | the warrants over 800,000 new Ordinary Shares |
| | with an exercise price of GBP1.25 pence per share |
| | granted to Mansard in connection with the Mansard |
| | Loan Note |
+--------------------+---------------------------------------------------+
GLOSSARY
+--------------------+---------------------------------------------------+
| "Connecting for | the directorate of the NHS responsible for |
| Health" or "CfH" | providing better, safer care by delivering |
+--------------------+---------------------------------------------------+
| | computer systems and services that improve how |
| | patient information is stored and accessed. |
+--------------------+---------------------------------------------------+
| "Health Services | the organisation responsible for providing health |
| Executive" or | and personal social services for |
| "HSE" | |
+--------------------+---------------------------------------------------+
| | everyone living in the Republic of Ireland. |
+--------------------+---------------------------------------------------+
| "Local Service | the main provider of IT services to one or more |
| Provider" or"LSP" | of the five areas set out under the NPfIT; |
+--------------------+---------------------------------------------------+
| | the five areas are London, the North East, the |
| | North West and West Midlands, the South and the |
| | East. |
+--------------------+---------------------------------------------------+
| "NHS" | the National Health Service in the UK |
+--------------------+---------------------------------------------------+
| "NPfIT" | the National Programme for IT, one of the largest |
| | IT projects in the world, estimated at a cost of |
| | GBP12.4bn, which aims to bring modern computer |
| | systems into the NHS to improve patient care and |
| | services. |
+--------------------+---------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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