TIDMTPX
RNS Number : 3028J
Panoply Holdings PLC (The)
04 December 2018
4 December 2018
The Panoply Holdings PLC
("The Panoply" or the "Company")
Admission to AIM and first day of dealings
Oversubscribed fundraise of GBP5.4m
The Panoply Holdings PLC, a digitally native technology services
company, is pleased to announce that admission of its shares to
trading on the AIM market of the London Stock Exchange
("Admission") will take place and dealings will commence at 8.00
a.m. today under the ticker TPX and the ISIN GB00BGGK0V60.
The Company successfully raised gross proceeds of GBP5.0m,
before expenses, through an oversubscribed placing of 6,756,755 new
Ordinary Shares at 74 pence per Ordinary Share (the "Placing
Price") together with a vendor sale of an additional 526,615
Ordinary Shares at the Placing Price raising a further GBP400k for
the vendor. Based on the Placing Price, the market capitalisation
of the Company at Admission is approximately GBP30 million.
Following admission, the Company will have 40,601,642 Ordinary
Shares in issue.
Stifel is acting as the nominated adviser and sole broker to the
Company. The Panoply is EIS/VCT-qualifying, profitable, debt-free,
and plans to pay a dividend from 2020.
The Panoply was founded in 2016 with the aim of identifying and
acquiring best-of-breed specialist information technology and
innovation consulting businesses across Europe, to form regional
clusters of group companies positioned to deliver services that
help clients digitally transform their businesses for the
automation age. From Admission, the four companies below will
become part of the enlarged group (the "Enlarged Group" or "The
Panoply Group"):
-- Bene Agere: an Oslo-based strategy and management consultancy;
-- Manifesto Digital: an award-winning London-based digital experience agency;
-- Notbinary: an award-winning London-based IT consultancy
focused on digital transformation; and
-- Questers: an award-winning provider of onshore and nearshore
agile software development services
Each of these four businesses is independently profitable and
has a strong order backlog that supports their organic growth.
The four businesses service a breadth of blue-chip customers
between them, including Unilever, BBC, National Trust, Unicef UK,
Kew Gardens, DVLA, London Southbank University, Funding Circle and
Shelter.
Key strengths
Significant market opportunity
Independent research house, International Data Corporation
(IDC), estimates that the market for digital transformation
services in EMEA will rise from $45 billion in 2017 to $82 billion
by 2021.
Group platform
The Panoply provides a platform for companies which join the
Group to accelerate their organic growth through cross-selling, as
well as by leveraging The Panoply brand, network, listed status and
balance sheet.
Alignment of interests
The Panoply's acquisition formula involves a significant
proportion of the consideration for each acquisition being issued
in Ordinary Shares, thereby ensuring alignment of interests of the
target companies' selling shareholders with the existing
shareholders.
Decentralised operating model
The Panoply's operating model allows companies within the
Panoply Group to continue to remain entrepreneurial and creative,
unstifled by bureaucracy:
- Central control is provided by a non-executive director,
appointed by the Board of the Company to the board of each Panoply
Group company, to provide governance, as well as guidance and
oversight on growth strategy and collaboration with other Panoply
Group Companies;
- The aim of this model is to provide clients with better
outcomes, faster execution and lower cost for higher quality
work.
Profitable and cash-generative
At Admission, the Enlarged Group is profitable, cash generative,
debt-free and only intends to make accretive acquisitions
going-forward.
Focused growth strategy
- The Panoply's Acquisition Formula is designed to attract
ambitious companies, confident in their ability to grow profitably,
while rewarding cross-selling and collaboration;
- The Panoply's management has an extensive network to help
identify, attract and execute future acquisitions.
Experienced Management and Board with proven track record
The Panoply is managed by highly experienced executive and
non-executive directors combining strong sector, public company and
international mergers and acquisitions expertise with a track
record of building, growing and exiting services companies.
Neal Gandhi, Chief Executive Officer, commented:
"The Panoply is a services company assembled to meet the demands
created by the "fourth industrial revolution", combining the very
best talent to service the growing technical needs of clients with
innovation, creativity and efficiency. With digital transformation
becoming more and more critical to companies' success across many
verticals, this is the right time for a digitally native business
such as ours to come to the market and capitalise on that
structural shift. The old consultancy model is dying, and our
decentralised, agile operating model is here to take its place.
"We have ambitious growth plans and are confident that AIM will
be the right platform to support us in rapidly scaling the
business. Admission to the exchange will bolster our brand and
provide the capital necessary to pursue further, sustainable
growth."
The Company's Admission Document can be found at:
www.thepanoply.com
Enquiries:
The Panoply Holdings
Neal Gandhi (CEO) Via Alma PR
Oliver Rigby (CFO)
Stifel Nicolaus Europe Limited (Nomad +44 (0)207 710
and Broker) 7600
Fred Walsh
Alex Price
Neil Shah
Luisa Orsini Baroni
+44(0)203 405
Alma PR (Financial PR) 0206
Josh Royston
Rebecca Sanders-Hewett
Susie Hudson 07780 901979
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 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.
www.thepanoply.com
Strategy
The Directors believe that the key to the future success of The
Panoply Group is through a combination of an organic and
acquisitive growth strategy.
The Panoply Group's primary strategy is to acquire companies in
order to build regional clusters of complementary companies across
Europe and support them in achieving faster organic growth, by
allowing them to upsell, cross-sell and therefore win bigger
deals.
The Directors believe that The Panoply's formulaic acquisition
process will enable the Panoply Group to complete acquisitions
quickly and cost effectively:
1. The Panoply identifies target companies that are primarily
service-based, with annual revenues of up to GBP10 million. Target
companies should be profitable, with limited or no debt, and most
importantly, show potential for clear sales synergies with the
Enlarged Group;
2. The Panoply carries out a due diligence process, drawing on
the experience of its Directors and wider management and advisory
teams. External professional advisors are used as required; and
3. once a potential target has been identified and the due
diligence process completed to The Panoply's satisfaction, a price
is agreed with the relevant business vendors based on a defined
consideration formula. Under this formula the price is determined
by reference to a multiple of the target's last 12 months EBITDA.
Additional consideration may then become payable based on the
target's ability to meet performance targets over the following 24
months, one of the parameters being cross sales within The Enlarged
Group. The Panoply's Consideration Formula contains a clawback
mechanism with a view to providing the Company with downside
protection in the event that a target company's profit falls in the
two years following acquisition.
In the short to medium term, the majority of the consideration
payable in respect of the acquisition of target companies is
expected to be satisfied by the issue and allotment of Ordinary
Shares. The Directors intend that each acquisition agreement will
include customary lock-in undertakings in respect of any Ordinary
Shares issued.
The Directors believe that The Panoply's model will be
attractive to target companies on account of its:
Listed status
Admission will provide The Panoply with a profile that all The
Panoply Group companies can use to leverage in new business
opportunities. Indeed, smaller IT services companies come across
customer procurement hurdles that may be removed once companies
join The Panoply Group. In addition, Admission provides a platform
for The Panoply to make further acquisitions, as well as access to
capital, which can be used to help facilitate further organic
growth;
Operating model
The Panoply's operating model is to allow companies to continue
to operate largely autonomously. This allows the existing
entrepreneurs of target companies to continue to run their
companies much like they did prior to acquisition. In order to
provide additional support and guidance to management teams, as
well as ensuring timely information and reporting flows back to The
Panoply board, The Panoply provides each of its subsidiaries with a
non-executive director, who sits on its board;
Cross selling and leverage opportunities
The Panoply's strategy is to acquire companies within specific
geographic locations, in order to create regional clusters of
companies in each jurisdiction. Each company acquired in a specific
geographical location will have little or no service crossover with
other companies within its own geographical regional cluster. The
Panoply will seek to acquire complementary companies rather than
competing companies and then seek to leverage the cross selling
opportunities amongst them;
Marketing strategy
The Panoply's marketing strategy is to provide additional
awareness for all of The Panoply Group companies, carrying out
activities to a much larger scale than each Panoply Group company
would be able to achieve individually. Each Panoply Group company
will be rebranded by the addition of the TPX prefix to its name in
order to better signpost to clients the breadth of the offering and
facilitate cross-selling; and
Ability to attract and retain high quality staff
The Panoply Group structure is designed to attract talent at all
levels of seniority. The Directors believe that The Panoply's model
will be attractive as it is designed to enable a target company and
its employees to take advantage of the benefits of being part of a
larger group whilst at the same time still retaining a significant
level of autonomy. Admission itself provides the opportunity to
attract and incentivise high-quality staff through equity
incentives that are more realisable than in private companies.
Reasons for Admission and use of proceeds
The Directors believe that Admission will be an important step
in the Enlarged Group's development, as well as providing the
Company with the net proceeds of the placing. It is the view of the
Directors that Admission will:
-- enhance the perceived credentials of the Enlarged Group with
existing and potential customers/clients;
-- allow the Enlarged Group to access equity capital effectively
in order to provide the Company with the financial flexibility to
pursue further growth opportunities;
-- help the Enlarged Group attract and retain high-quality and/or key staff; and
-- provide the Company with the flexibility to use its shares as
currency for acquisition opportunities.
Use of proceeds
The Directors intend to use the net proceeds of the Placing
principally to provide further investment into The Panoply Group
companies and for working capital purposes.
Dividend policy
The Directors recognise the importance of dividend income to
Shareholders and, subject to the availability of distributable
reserves, the retention of funds required to finance the future
growth of the Enlarged Group and such other factors which the
Directors may from time to time deem relevant, anticipate paying a
regular dividend (if appropriate). The Directors' current intention
is to recommend the commencement of dividend payments after the
finalisation of the Company's final accounts for the 30 financial
year ended 31 March 2020. There can be no assurance as to whether
dividend distributions will occur as intended, the amount of
dividend payments or the timing of any such payment.
High quality board
Executive Directors
Neal Narendra Gandhi, aged 51, Co-Founder and Chief Executive
Officer
Neal is a serial tech entrepreneur having co-founded four
companies that exited successfully with a combined value of
GBP117m. He co-founded his first company at the age of 21 and,
under the brand name of Jungle.com, that company went on to be sold
to GUS for GBP37m. In 1996 he co-founded Xplora and sold it to
Nasdaq-listed USWeb in 1998. Neal then co-founded Attenda, a
managed services consultancy which went on to be sold for GBP72m;
one part to Telecity Plc and the other to Darwin Private Equity. In
2006 he founded QuickStart Global, an off-shore IT service
provider, which grew rapidly, and in 2010 was listed in the Sunday
Times Tech-Track 100 at number 3, his second company in that list
with Attenda having been listed at number 2 in 2001.
Oliver James Rigby, aged 37, Co-Founder and Chief Financial
Officer
Oliver qualified as an accountant with MRI Moores Rowland LLP in
2006 before spending six years as an adviser in corporate finance
with Daniel Stewart and Deloitte. Oliver acted as a Nominated
Adviser to the AIM Market of the London Stock Exchange and was one
of their youngest Qualified Executives. Prior to co-founding The
Panoply, Oliver set up Growth Company FD Limited in 2012 to provide
part- time CFO and corporate finance support to growing businesses.
He has worked with clients across a range of sectors and sizes
including AIM listed Magnolia Petroleum Plc and privately owned
Uplands Retail Limited which has a turnover of over GBP60m.
Non-Executive Directors
Mark William Smith, aged 63, Non-Executive Chairman
Mark has held several senior roles in creative and innovative
communication businesses. He began his career as a chartered
accountant at Touche Ross & Co. (Deloitte). He then spent 30
years at Chime Communications, which was acquired by Providence
Private Equity in 2015.
Mark is currently chairman of Holiday Extras, a market leader in
the provision of online ancillary travel services, a position which
he has held for 15 years. He is also a non-executive director at
The Dods Group, an AIM listed intelligence, media, training and
events company, operating in over 50 countries.
Christopher Paul Sweetland, aged 63, Non-Executive Director
Chris qualified as a chartered accountant with KPMG before
spending 9 years overseas in a variety of financial roles with
PepsiCo Inc. In 1989, when he was CFO for the Central Europe
Beverages Division, he was recruited by WPP to be part of their
small central team. Chris retired from his role as WPP Deputy Group
Finance Director in 2016 having spent 27 years helping build the
company and having been involved in all aspects of operations,
investor relations and the many acquisitions that built that group.
Chris also represented WPP on the boards of a number of companies
both in the UK and overseas.
Isabel Jane Kelly, aged 52, Non-Executive Director
Isabel is the founder of Profit with Purpose, a social purpose
consultancy working with companies and non-profits. She is also a
'Resident Expert' at the Skoll Centre, Said Business School, Oxford
University, where she is researching the organisational structures
used by businesses to deliver social impact. In 2002 Marc Benioff,
CEO of Salesforce.com, hired Isabel to establish the Salesforce
Foundation internationally (now Salesforce.org). For 12 years she
grew and led an international team delivering technology, grants
and programmes in 110 countries, as well as generating revenue of
$12m to fund the work. Isabel worked at Oxfam and Amnesty
International for 12 years prior to joining Salesforce.
This information is provided by RNS, the news service of the
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Authority to act as a Primary Information Provider in the United
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCFKNDQKBDBNBK
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