TIDMMRS
RNS Number : 1262W
Management Resource Solutions PLC
15 April 2019
15 April 2019
Management Resource Solutions plc
("MRS", the "Company" or the "Group")
Update on acquisition of Alerion Consulting Ltd ("Alerion") and
other matters
Notice of Requisition of General Meeting
The Company wishes to provide further information on the
background to its recent acquisition of Alerion which was announced
on 28 March 2019.
The board reiterates that it is very pleased to have acquired
Alerion, which it believes to be an exciting business that will
complement the service offering of the MRS Group, further enhancing
the industry-leading services we offer to our customers.
As stated, Alerion's technology has been in the development
phase pre-acquisition; this is now ready to be deployed on drones
conducting aerial surveys at both our MRS Services Group Pty Ltd
("MRSSG") and Bachmann Plant Hire Pty Ltd ("BPH") operations. The
Group has identified and budgeted costs of A$150,000 (GBP81,000)
for marketing and hardware in order to generate the first external
revenue stream. In accordance with the acquisition agreement, the
Company has allocated A$555,000 (GBP300,000) of intra-group funding
to Alerion to cover Alerion's costs.
The Alerion technology will operate through the Australian
company Aerial Survey Solutions Pty Ltd (a wholly owned subsidiary
of MRS). The survey team that currently operates within BPH will be
managed by Elliott Talbott and operate the drones and undertake
data analysis for current work streams. Further, MRS CEO Paul
Brenton and Mr Talbott will continue to develop the external
services (discussions and work on which are already underway), and
as this grows, additional employees will be taken on to run the
operations full time under the management of Mr Talbott. Under the
terms of his service agreement, Mr Talbott has agreed to spend the
equivalent of at least a day per week on Alerion's business for a
salary of GBP35,000 per annum, as well as GBP750 per day for any
additional work done. Additionally, Mr Talbott has informed the
Company that he will be relinquishing a number of his other
business commitments, including his roles at TitanBlock and Leinad
Ltd, in order to focus on the roll out of Alerion within the Group.
Mr Talbott will retain his role at Bolt.Global.
Further information on the vendors
-- Elliott Talbott, the founder of Alerion was introduced to
members of the board by Leon Hogan, a large shareholder of the
company, for which he received a fee of GBP19,000. The other
vendors are Mr Talbott's wife, and a company of which Mr Talbott is
the sole beneficiary, and Christopher Grove (together the
"Vendors").
-- MRS's directors have had no previous business relationships with Mr Talbott or Alerion.
-- Mr Grove is an IT consultant who received shares in Alerion
in consideration for his work done to assist with the development
of the software. Mr Grove has previously undertaken some IT and
website support work for MRS. Mr Grove has also acted as an IT
advisor to Leinad Ltd ("Leinad") which announced a technology
licensing agreement with Altona Energy plc ("Altona") on 28 August
2018. Mr Talbott also undertook some work for Leinad.
-- Leon Hogan is currently a shareholder in Altona and has also
performed certain business development roles for Leinad as a
consultant. John Zorbas, Chairman of MRS, was formerly a
shareholder in Altona. Subsequent to the Leinad transaction, Tim
Jones, Finance Director of MRS, was chairman of Altona for a short
period.
-- Mr Zorbas is also Chief Executive of URU Metals, an AIM
company, in which Mr Hogan has been a small shareholder.
-- The Company is informed that Mr Grove has previously provided
services to businesses of Mr Hogan.
Furthermore, in light of a number of shareholder concerns
regarding relationships of its shareholders and any potential
conflicts of interest, the Board is commissioning its legal
advisors to draw up a report to assess the merit or otherwise of
such assertions and any potential conflicts of interest. The
overall conclusions of the report will be communicated to
shareholders in due course.
Valuation
The MRS board has a budget including projections for the costs
and incremental revenues from the new Alerion operation. The
existing MRS operations are projected to benefit from approximately
A$240,000 (GBP130,000) savings per annum, before the costs of the
Alerion subsidiary, from carrying out the surveys in-house rather
than subcontracting surveys externally to third parties. The board
has undertaken detailed financial analysis of the acquisition based
on costs incurred historically on aerial surveying, along with
specific revenue generating opportunities that have been identified
following commercial discussions in Australia.
The board is confident that the acquisition represents an
excellent opportunity for MRS and that the consideration paid for
Alerion will provide an uplift in shareholder value and earnings
per share over time. The board is commissioning an independent
report on the bases and assumptions underlying their valuation of
Alerion, the overall conclusions of which will be communicated to
shareholders in due course. A further announcement will be made on
appointment of the firm engaged to undertake the independent
work.
Completion of Alerion acquisition and admission
As previously announced, the acquisition of Alerion completed on
28 March 2019 and it is expected that the Consideration Shares
issued pursuant to the acquisition will be admitted to trading on
Tuesday 16 April 2019.
The Vendors have agreed to extend their lock up period from an
initial 6 months to a 6 month hard lock up plus a further 12 months
orderly market lock in period.
Correction concerning July 2018 fundraising
Further to the announcement of 6 July 2018 concerning a
fundraising from directors, employees and contractors, the Company
wishes to clarify that one of the subscribers was Leon Hogan, who
was not a director, employee or contractor.
Board of Directors
The Company stated in its corporate governance statement (that
is available on the Company's website) that it would appoint an
independent non-executive director to the board by November 2018.
This appointment has been delayed, but it is now the intention to
both accelerate this appointment and to appoint a second
independent non-executive director such that the board will consist
of five directors. Further details will be announced in respect of
these appointments following completion of the customary due
diligence. The Company will update its Corporate Governance
Statement and its assessment of the independence of the Board
accordingly in due course.
Notice of Requisition of General Meeting
The Company also announces that it has a received a requisition
of a general meeting of the Company at which resolutions are to be
proposed to remove John Zorbas and Timothy Jones as directors of
the Company, to remove any directors appointed between 11 April
2019 and the date of the general meeting and to appoint Nigel
Burton, Trevor Brown and Daniel Smith as directors of the
Company.
The Company will send shareholders a notice of general meeting
in due course in accordance with the requirements of the Companies
Act 2006.
Update of debt restructuring
Further to the update in the half year results statement dated
28 February 2019, the Company continues to make progress on the
debt restructuring and has recently agreed a term sheet with a
major financial institution. The Company expects to provide a
further update to shareholders upon completion of the debt
restructuring.
For further information:
Management Resource Solutions plc via FTI Consulting
John Zorbas, Chairman Tel: +44 (0) 20
Paul Brenton, CEO 3727 1000
Tim Jones, Finance Director
Arden Partners plc (NOMAD & Broker) Tel: +44 (0) 20
Tom Price 37614 5900
Alex Penney
Maria Gomez de Olea
FTI Consulting (Financial PR) Tel: +44 (0) 20
Alex Beagley 3727 1000
James Styles
Laura Saraby
About MRS
Management Resource Solutions plc (MRS), through its
subsidiaries Bachmann Plant Hire and MRS Services Group, offers
plant hire, equipment repair, refurbishment and fabrication, mine
rehabilitation, earthmoving, road construction and other support
services to a wide base of private and public sector clients in
Australia. MRS caters predominately for the mining, civil
engineering, construction and infrastructure industries.
Further information on the Company can be found at
http://www.mrsplc.info
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
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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