TIDMAPPS
RNS Number : 1998O
appScatter Group PLC
16 May 2018
16 May 2018
appScatter Group plc
('appScatter' or the 'Company')
Posting of Circular and Notice of General Meeting
appScatter Group plc (AIM: APPS), the scalable
business-to-business ('B2B') Software as a Service ('SaaS')
platform that allows users to distribute and manage their apps on
multiple app stores around the world, announces that it posted a
circular to shareholders on 15 May 2018 (the "Circular") in order
to convene a General Meeting of the Company at which resolutions
seeking authority for the issue of new ordinary shares in the
Company ("Ordinary Shares") in connection with the proposed
acquisition by the Company of Priori Data GmbH (the "Acquisition")
and an intended GBP15.0 million fund raise required to effect the
Acquisition and to provide additional working capital for the
Enlarged Group (the "Fund Raise") will be put to shareholders.
The General Meeting of the Company is being convened for 11.00
a.m. on 31 May 2018 at the offices of FTI Consulting, 200
Aldersgate, Aldersgate Street, London EC1A 4HD.
The Circular and Notice of General Meeting are available on the
Company's website at www.appscatterplc.com.
Pursuant to a variation to the Acquisition Agreement entered
into on 15 May 2018, the Acquisition Agreement is now conditional
on the conclusion of the Fund Raise. Notwithstanding the convening
of the General Meeting, if the Fund Raise is not concluded, the
Acquisition will not proceed.
Capitalised terms used in this announcement shall have the same
meanings as the definitions included in the Circular.
For enquiries, please contact:
appScatter Group plc Tel: 020 8004 7212
Philip Marcella, Chief Executive www.appscatter.com
Officer
Manish Kotecha, Finance Director
FTI Consulting Tel: 020 3727 1000
Financial Public Relations appScatter@fticonsulting.com
Matt Dixon / Adam Davidson
/ Niamh Fogarty
Smith & Williamson Corporate Tel: +44 (0)20 7131
Finance Limited 4000
Nominated Adviser and Joint www.smithandwilliamson.com
Broker Tel: +44 (0)20 7710
Azhic Basirov / Ben Jeynes 7600
/ David Jones www.stifel.com
Stifel Nicolaus Europe Limited
Joint Broker
Fred Walsh / Neil Shah / Ben
Maddison
Market abuse regulation (MAR) disclosure
Certain information contained in this announcement would have
been deemed to be inside information for the purposes of article 7
of Regulation (EU) No 596/2014 until the release of this
announcement. This announcement has been issued by and is the sole
responsibility of the Company.
About appScatter Group plc
appScatter is a scalable B2B SaaS platform that allows paying
users to distribute their apps to, and manage their apps on,
multiple app stores. Additionally, the centralised platform enables
app developers and publishers to manage and track performance of
their own and competing apps across all of the app stores on the
platform.
1. Introduction
On 6 April 2018 appScatter Group plc ("appScatter" or the
"Company") announced its intention to acquire 100% of the entire
issued share capital of Priori Data GmbH for a consideration of
GBP13.5 million of which GBP9.45 million is payable in cash and the
balance of GBP4.05 million by the issue of 5,785,714 New Ordinary
Shares at an effective price of 70p per share.
The Company has now posted the Circular to Shareholders to
provide Shareholders with information regarding the Acquisition and
to convene a General Meeting at which resolutions seeking
shareholder authority for the issue of the New Ordinary Shares will
be put to Shareholders. If these resolutions are not passed the
Company will be unable to issue the New Ordinary Shares and the
Company will not be able to proceed with the Acquisition.
A General Meeting has been convened for 31 May 2018 to consider
resolutions to empower the Directors to allot up to 27,214,285
Ordinary Shares in connection with the Acquisition and the intended
Fund Raise required to effect the Acquisition and to provide
additional working capital for
the Enlarged Group.
Further information about the Acquisition and the Company's
current trading and prospects is set out below. Additional
information about the Company and its business, financials and
constitutional documents can be found on the Company's website at:
www.appscatterplc.com.
2. Background to, and reasons for, the Acquisition and the Fund
Raise
The Board of appScatter believes the Acquisition will allow the
Enlarged Group to provide significantly enhanced, market leading,
data-led app insights. The Directors believe that these insights,
when combined with Priori's data intelligence software, will
enhance the Group's ability to
meet the increasing data demands of existing and prospective
customers.
The combined range of the appScatter and Priori datasets will be
available to the Company's targeted customers such as brands, app
publishers, advertising agencies and mobile networks to conduct
more targeted demographic campaigns.
If completed, the Fund Raise will enable the Company to fund the
Cash Consideration and will provide additional working capital
resources for the Enlarged Group. If the Fund Raise is not
completed, the Acquisition will not proceed.
3. The Acquisition
The Company has entered into a conditional sale and purchase
agreement to acquire Priori, pursuant to which appScatter has
agreed to purchase 100 per cent. of the issued share capital of
Priori, subject to appScatter raising sufficient funding pursuant
to the Fund Raise.
The total consideration for the Acquisition is GBP13.5 million,
to be satisfied by the payment of the Cash Consideration and the
issue of the Consideration Shares.
20.73 per cent. of the Consideration Shares, which will be
issued to Priori management, will be subject to a lock-in agreement
for an initial period of 12 months and an orderly market
arrangement for a further period of 12 months following the expiry
of the initial lock-in period. The remaining 79.67 per cent. of the
Consideration Shares to be issued to the non-management Sellers,
representing venture capital and early angel investors in Priori,
shall be subject to an orderly market arrangement for a period of
12 months.
The Acquisition and the Fund Raise are conditional, inter alia,
upon the approval of appScatter Shareholders of the Resolutions to
be proposed at the General Meeting.
4. The Acquisition Agreement
Pursuant to a conditional acquisition agreement dated 5 April
2018 (the "Acquisition Agreement") between (1) the Company and (2)
Quixote Holdings UG, Lakestar I LP, Martin Rajcan, Priori Trust UG,
Seedcamp III LP and Calceus GmbH (together the "Sellers"), the
Company has agreed to acquire all the issued and to be issued
shares in Priori. The consideration under the Acquisition Agreement
is GBP13.5 million to be satisfied on completion through the
payment of the Cash Consideration and the issue of the
Consideration Shares.
Completion of the Acquisition is conditional on appScatter
raising sufficient funding pursuant to the Fund Raise to effect the
Acquisition and to provide additional working capital for the
Enlarged Group and the passing, at the General Meeting, of the
Resolutions. The parties have agreed a long stop date for
completion of the Acquisition of 31 May 2018.
Under the terms of the Acquisition Agreement, the Sellers have
agreed to indemnify the Company
for:
(i) all claims, liabilities, costs and reasonable expenses
arising in connection with any legal dispute regarding the usage of
certain images on Priori's website in the past;
(ii) all claims, liabilities, costs and reasonable expenses
arising in connection from any violations of the laws with respect
to (i) bogus self-employment and (ii) minimum wage laws by Priori
(in each case, including but not limited to social security
contributions, taxes, fines and penalties and external costs with
respect to such matter);
(iii) all claims, liabilities, costs and reasonable expenses
arising in connection from any violations of the Protection Against
Unfair Dismissal Act by Priori in respect of its employees;
(iv) all claims, liabilities, costs and reasonable expenses
arising in connection with any convertible loan agreements made
between the Priori and certain lenders in 2013 and 2016; and
(v) all claims, liabilities, costs and reasonable expenses
arising in connection with any claim made by any employee of Priori
(whether current or former) or other person with respect to the
intellectual property rights or with respect Priori's proprietary
software.
Each of the Sellers are giving warranties in favour of the
Company as to title only. The management Sellers are giving a suite
of warranties in favour of the Company that are usual for this type
of transaction.
The aggregate liability of the Sellers for claims in respect of
title shall not exceed an amount equal to the Consideration and all
other claims, indemnity claims and all claims under the tax
covenant given by the Sellers shall not exceed an amount equal to
twenty-five per cent. (25%) of the Consideration. For the avoidance
of doubt, the aggregate liability of the Sellers in respect for any
and all claims shall under no circumstances exceed the
Consideration.
The management Sellers have agreed not to carry on or be
engaged, concerned or interested (whether directly or indirectly)
with the business of any other app analytics platform for a period
of
2 years following completion of the Acquisition.
The Acquisition and the Fund Raise are conditional, inter alia,
upon the approval of appScatter Shareholders at the General
Meeting.
The Acquisition Agreement is conditional on the completion by
the Company of the intended Fund Raise. If the Fund Raise is not
concluded, and notwithstanding Shareholders voting in favour of the
Resolutions, the Acquisition will not proceed.
5. About Priori
Founded in 2013, Priori is a B2B SaaS platform provider of
mobile app intelligence based in Berlin, Germany with proprietary
core data intelligence software and 16 full time employees with
experience in monetising app market data, including data
scientists, engineers and sales.
Priori's data is sourced from more than six billion unique user
devices in 252 territories and Priori's proprietary core machine
learning data intelligence software provides intelligence across
keywords, apps, markets, usage and audience.
Priori's active customers include blue-chip multinational
organisations.
Based on unaudited management information, in the financial year
ended 31 December 2017 Priori had revenues of EUR1,056,000 (on a
cash-receipt basis) and recorded EBITDA losses of EUR410,000 (on a
net cash-receipts/cash-expense basis). On completion of the
proposed Acquisition, following the conversion of existing Priori
loan notes, Priori is expected to have unaudited estimated target
net assets of approximately EUR39,000.
6. Intended Fund Raise
The Acquisition is conditional on, inter alia, the completion by
the Company of the associated Fund Raise. The net proceeds of the
Fund Raise, if completed, will be utilised to fund the Cash
Consideration and to provide additional working capital for the
Enlarged Group. If the Fund Raise is not concluded, the Acquisition
will not proceed.
EIS advanced assurance
The Company has made application to HMRC for advanced assurance
that a proportion of the Fund Raise will qualify for EIS relief.
Confirmation from the UK tax authorities that a portion of the
planned Fund Raise qualifies for EIS relief has not yet been
received.
Until such confirmations have been received it is unlikely that
those investors for whom EIS relief is important will be able to
subscribe with the certainty they desire that EIS relief will be
forthcoming.
While any EIS based investment cannot be used to fund the
Acquisition such EIS funding needs to be invested in appScatter
shares before the funds raised to complete the Acquisition. In the
event therefore that the EIS confirmation is still outstanding at
the date of the General Meeting it may be necessary to seek
approval of the Resolutions but also to extend the long stop date
for the completion of the Acquisition.
The New Ordinary Shares will rank, on issue, pari passu in all
respects with the Company's Existing Ordinary Shares. The New
Ordinary Shares will be issued free from all liens, charges and
encumbrances.
7. Current Trading and Prospects
2017 was a prominent year for the Company, with appScatter
reporting maiden revenues in the first half of 2017, being admitted
to AIM in September 2017 and launching the appScatter platform in
November 2017.
As at 14 May 2018, the Company had 16,153 registered users, of
which 1,805 were licensed users of the appScatter platform
(comprising free users, trial users and paying users).
The Company was pleased to announce its first major partnership
agreement, with Airpush, Inc, a leading mobile advertising network,
in March 2018. The Company currently expects the marketing campaign
which is to accompany this partnership, and is designed to promote
the appScatter platform to Airpush users, to commence in Q2
2018.
The Board reports that trading for the year ended 31 December
2017 remains in line with market expectations and the Company's
current expectations are that the Company will report 2017 revenues
of approximately GBP1.9 million and a loss before interest and tax
of approximately GBP6.5 million. 2018 has started well and trading
in the year to date is in line with management expectations. The
Company has a number of potential partnerships under discussion and
progressing and, should any of these potential partnerships be
concluded, the Board would expect these partnerships to be
accretive to revenues in future periods.
The Company expects to announce its full year results to 31
December 2017 in early June 2018.
8. Financial Information
Financial information for the Group for each of the three years
ended 31 December 2016 was set out in the Company's admission
document dated 29 August 2017 which is available on the Company's
website at www.appScatterplc.com, as are the unaudited interim
accounts for the six months ended 30 June 2017.
9. General Meeting
The issue of the New Ordinary Shares is conditional upon, inter
alia, the approval by Shareholders of the Resolutions to be
proposed at the General Meeting of the Company which has been
convened for 11.00 a.m. on 31 May 2018, at which the following
Resolutions will be proposed to enable the issue of the New
Ordinary Shares:
Resolution 1 - Authority to allot shares
The Directors require the authority of shareholders in order to
allot the New Ordinary Shares. Resolution 1 to be put to
shareholders at the General Meeting will provide such authority.
For the purposes of the issuing the New Ordinary Shares, Resolution
1 will grant the Directors authority to allot new Ordinary Shares
up to a maximum nominal amount of GBP1,360,714.27 (representing, as
at 15 May 2018 (being the latest practicable date before the
publication of this document) 43.1 per cent. of the Existing
Ordinary Shares) being 27,214,285 new Ordinary Shares in
number.
Resolution 1 is being proposed as an ordinary resolution and
will therefore require more than 50 per cent. of the votes cast,
whether in person or by proxy, to be in favour. This authority, if
granted, will be in substitution for the existing authorities to
allot Ordinary Shares granted to the Directors prior to the date of
the Circular which will be revoked, and will enable the Directors
to effect the Fund Raise and the Acquisition. This authority will
expire on the later of the conclusion of the next Annual General
Meeting of the Company or 30 June 2019.
Resolution 2 - Disapplication of statutory pre-emption
rights
Section 561 of the Companies Act requires that, on an allotment
of "equity securities" for cash, such equity securities must first
be offered to existing Shareholders in proportion to the number of
Ordinary Shares they each hold at that time. The Fund Raise will
result in "equity securities" allotted for cash and, accordingly,
cannot be offered on a non pre-emptive basis unless Shareholders
have first waived their pre-emption rights. Resolution 2, if
passed, provides such a waiver. If Resolution 2 is passed, the
Directors will be able to allot the new ordinary shares on a non
pre-emptive basis, to the extent of the authority granted by
Resolution 1.
Resolution 2 is being passed a special resolution and will
therefore require not less than 75 per cent. of the votes cast,
whether in person or by proxy, to be in favour. This authority, if
granted, will be in substitution for the existing authorities to
allot Ordinary Shares free of pre-emption rights granted to the
Directors prior to the date of the Circular which will be revoked.
This authority will expire on the later of the conclusion of the
next Annual General Meeting of the Company or 30 June 2019.
The issue of the New Ordinary Shares, and completion of the
Acquisition, are conditional, inter alia, on Shareholders passing
the appropriate Resolutions being proposed at the General
Meeting.
If Shareholders do not pass the appropriate Resolutions, the
issue of the New Ordinary Shares and/or the Acquisition will not
proceed.
10. Recommendation and Voting Intentions
The Board believes that the Acquisition and the associated Fund
Raise are in the best interests of the Company and Shareholders as
a whole and unanimously recommends that you vote in favour of the
Resolutions as the Directors intend to do in respect of their own
beneficial shareholdings.
Inclusive of the shareholdings of the Directors, irrevocable
commitments to vote in favour of the Resolutions have been received
from Shareholders representing an aggregate of 29.48 per cent. of
the Existing Ordinary Shares.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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