TIDMKRM
RNS Number : 8110Q
KRM22 PLC
01 November 2021
KRM22 plc
("KRM22", the "Group" or the "Company")
Conditional Subscription Agreement and Trading Update
KRM22 plc, (AIM: KRM) the technology and software investment
company that focuses on risk management for capital markets, today
announces that it has entered into a conditional subscription
agreement (the "Agreement") with 7RIDGE Investments 3 LP acting by
its general partner 7RIDGE Investments 3 (GP) Limited ("7RIDGE") to
subscribe for up to 25 per cent of the enlarged ordinary share
capital of the Company at 53 pence per share to raise approximately
GBP4.7 million in aggregate (the "Transaction").
The Agreement
Pursuant to the Agreement, 7RIDGE has conditionally agreed to
subscribe (the "Subscription") for up to 8,916,584 new Ordinary
Shares (the "Subscription Shares") in the Company at a price of 53
pence per share to raise approximately GBP4.7m in aggregate. 7RIDGE
has today announced a conditional agreement to acquire Trading
Technologies International, Inc. ("TT"), a leading provider of SaaS
based services for capital markets companies, and the Agreement
allows 7RIDGE to nominate TT, or any other entity controlled by
7RIDGE, to subscribe for the Subscription Shares in its place.
The Subscription is conditional, inter alia, on:
(1) 7RIDGE being satisfied that neither it nor TT will be
treated as being in a concert party pursuant to the City Code on
Takeovers and Mergers (the "Code") in respect of the Transaction,
or the approval of a Rule 9 whitewash pursuant to the Code for the
Transaction by the shareholders of the Company to the extent such
approval may be required;
(2) Completion of the acquisition of TT by 7RIDGE, as announced
today, which is subject to regulatory approval which is expected to
complete on or before 31 December 2021;
(3) The negotiation and execution of a distribution agreement
between the Company and TT; and
(4) Admission of the Subscription Shares to trading on AIM.
Accordingly, the funds receivable pursuant to the Subscription
will not be received by the Company until such conditions are
satisfied. In the event that neither clearance nor a whitewash
approval is forthcoming then the parties intend to enter into a
revised subscription agreement for such lower number of shares as
will not trigger a mandatory offer under Rule 9 of the Takeover
Code. Further announcements will be made with regards to the
conditions applicable to the Subscription in due course.
Following completion of the acquisition of TT by 7RIDGE,
completion of the subscription by 7RIDGE or its nominee for the
Subscription Shares and the expiry of any transition period, it is
expected that Keith Todd will be released from his role as CEO of
KRM22 to become CEO of TT while remaining Executive Chairman of the
Company. If the appointment of Keith Todd as CEO of TT proceeds in
accordance with current expectations, the Company will propose that
Stephen Casner, President of KRM22, succeeds Keith Todd as CEO of
the Company. The Company places significant importance on corporate
governance and therefore the composition of the Board. Accordingly,
both the Company and TT will adopt appropriate protocols to avoid
any commercial conflicts of interest. Keith Todd and Stephen Casner
have been working together on KRM22 prior to the Company's IPO in
2018 and have a common and aligned view of the Company's strategy
and operational approach. The transition of Stephen Casner to CEO
is expected to be smooth and will allow KRM22 to achieve the growth
the distribution agreement provides while Keith Todd remains
Executive Chairman of KRM22.
Immediately following this announcement, the Company, if
necessary, will prepare a whitewash circular and seek shareholder
approval for the Transaction. Kestrel Partners, who own 22.3 per
cent of the ordinary share capital of the Company, has signed an
irrevocable agreement to approve the shareholder resolutions put
forward as part of the Transaction.
The Company has been discussing, and will continue to discuss,
distribution deals with major capital market players to accelerate
the Company's growth. The relationship with TT will not be
exclusive, however the proposed distribution agreement will provide
a significant opportunity for KRM22 to target TT's customer base
that spans over 1,000 firms including nearly all of the major tier
one banks. The distribution agreement will start with the Company's
Market Risk products and can expand to the Company's full suite of
risk products.
Trading Update
In addition to the Transaction, the Company today issues a
trading update for the second half of FY 2021. Trading in the
second half of FY 2021 has been similar to that seen in the first
half and is expected to deliver similar revenue and Adjusted
EBITDA, which is lower than expectations. Accordingly, the Board
expects to achieve revenue of GBP4.3 million, ARR of no less than
GBP4.0 million and Adjusted EBITDA loss of GBP0.6 million for the
full year. The Company has suffered from the pausing of a
significant tier one bank agreement that was expected to be signed
in FY 2021 as the contract was fully agreed but not signed however
this contract is now not expected before FY 2023. Despite this, the
sales pipeline remains strong, and with the proposed TT
distribution agreement, FY 2022 forecasts remain positive and the
Company expects growth on FY 2021.
Keith Todd CBE, Executive Chairman and CEO at KRM22 commented :
"This is an important strategic step forward for KRM22 and will
significantly improve our growth potential. Trading Technologies is
a leading provider of SaaS based services for capital markets
companies and is complementary to KRM22's SaaS based risk
offerings. Stephen and I have known each other for twenty years and
have proven to work effectively since KRM22 was formed. The
transition of roles, to the extent undertaken in accordance with
our current expectations, will be smooth and my new role at Trading
Technologies would be complementary to KRM22. The outlook for KRM22
over the next few years will be improved by this transaction and
will provide the capital that the Company needs."
For further information please contact:
KRM22 plc InvestorRelations@krm22.com
Keith Todd CBE, Executive Chairman and CEO
Stephen Casner, President
Kim Suter, CFO
finnCap Ltd (Nominated Adviser and Sole Broker) +44 (0)20 7220 0500
Carl Holmes / Kate Bannatyne
Alice Lane / Sunila de Silva (ECM)
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
About KRM22 plc
KRM22 is a closed-ended investment company which listed on AIM
on 30 April 2018. The Company has been established with the
objective of creating value for its investors through the
investment in, and subsequent growth and development of, target
companies in the technology and software sector, with a focus on
risk management in capital markets.
Through its investments and the Global Risk Platform, KRM22
helps capital market companies reduce the cost and complexity of
risk management. The Global Risk Platform provides applications to
help address firms' market, compliance, operations and technology
risk challenges and to manage their entire enterprise risk
profile.
Capital markets companies' partner with KRM22 to optimise risk
management systems and processes, improving profitability and
expanding opportunities to increase portfolio returns by leveraging
risk as alpha.
KRM22 plc is listed on AIM and the Group is headquartered in
London, with offices in several of the world's major financial
centres.
See more about KRM22 at www.krm22.com .
About 7RIDGE Limited
7RIDGE is an asset manager invested in transformative technology
with a focused on B2B companies within the financial services
sector. 7RIDGE has deep domain knowledge and strong networks, as
well as a proven operating and investment track record distinguish
the team and empower the strategy.
About Trading Technologies
Trading Technologies ( www.tradingtechnologies.com ,
@Trading_Tech ) creates professional trading software,
infrastructure and data solutions for a wide variety of users,
including proprietary traders, brokers, money managers, CTAs, hedge
funds, commercial hedgers and risk managers. In addition to
providing access to the world's major international exchanges and
liquidity venues via its TT(R) trading platform, TT offers
domain-specific technology for cryptocurrency trading and
machine-learning tools for trade surveillance.
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
AGRMBBRTMTTJMMB
(END) Dow Jones Newswires
November 01, 2021 03:00 ET (07:00 GMT)
Krm22 (LSE:KRM)
Historical Stock Chart
From Mar 2024 to Apr 2024
Krm22 (LSE:KRM)
Historical Stock Chart
From Apr 2023 to Apr 2024
