MXC Capital Limited Acquisition by Ravenscroft of 25% shareholding (0946V)
19 July 2018 - 4:00PM
UK Regulatory
TIDMMXCP
RNS Number : 0946V
MXC Capital Limited
19 July 2018
MXC Capital Limited
("MXC", the "Group" or the "Company")
Acquisition by Ravenscroft of 25% shareholding in MXC Capital
(UK) Limited
MXC (AIM: MXCP) is pleased to announce the proposed acquisition
of 25% of the issued share capital of MXC Capital (UK) Limited
("MXCUK") by Ravenscroft Holdings Limited ("Ravenscroft") for a
cash consideration of GBP2.25 million (the "Investment").
MXCUK is a subsidiary of MXC and is the holding company of the
Group's transactional businesses: MXC Advisory Limited, the Group's
advisory business, and MXC Capital Markets LLP ("MXCCM"), the
Group's corporate finance practice which is authorised and
regulated by the Financial Conduct Authority (the "FCA").
Completion of the Investment ("Completion") is conditional upon the
FCA's consent to the change of control of MXCCM, which MXC expects
to be forthcoming shortly.
Ravenscroft is an independently owned investment services group
based in the Channel Islands which has GBP4.7 billion of assets
under administration for both private clients and institutional
clients. As announced on 16 February 2018, MXC currently acts as
consultant to Ravenscroft in relation to its role as investment
manager to the GIF Technology & Innovation Cell (the "GIF"), a
technology and innovation fund in which the States of Guernsey and
MXC are invested. The investment represents a deepening of MXC's
relationship with Ravenscroft, which the Board believes will help
to grow and drive further value within the Group's transactional
businesses, as well as provide further investment opportunities
within its investment business.
The Investment values MXCUK at GBP9 million which, in the
opinion of the Board, is not currently reflected in the Group's
share price. MXC's underlying portfolio and liquid assets* were
valued at 1.46 pence per share as at 18 July 2018 and the closing
mid-market share price was 1.2 pence, representing a discount of
18%.
For the year ended 31 August 2017, on a non-consolidated basis,
MXCUK reported revenue of GBP1.8 million and a profit before tax of
GBP1.1 million. MXCUK's net assets as at 31 August 2017 were GBP28
million which includes intercompany balances as well as certain
investments which have since been distributed to the Group's
intermediate holding company, MXC Guernsey Limited, post the year
end.
The consideration for the Investment will be paid in cash;
GBP1.5 million on Completion, with GBP0.75 million to be paid on 2
January 2019.
The majority of the proceeds are intended to be used in order to
fund an Employee Benefit Trust (the "EBT") which MXC is in the
process of establishing. The purpose of the EBT will be to buy MXC
shares in the market to be held to satisfy existing and future
share incentivisation awards for the benefit of employees and
certain directors. The remainder of the proceeds will be used in
line with MXC's stated strategy of investing in technology
companies.
A further announcement will be made upon Completion, which is
expected to occur in the near future.
Peter Rigg, Chairman of MXC, said:
"We are delighted that Ravenscroft has decided to take a
significant stake in our transactional businesses, demonstrating
their belief and confidence in the MXC model. It is testament to
the excellent relationship we have built with Ravenscroft as a
result of working together on the GIF and we look forward to
building on that relationship to create further value for both MXC
and Ravenscroft's shareholders."
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
* represents unaudited valuation based on closing mid-market
prices of quoted investments as at 18 July 2018 with privately held
assets valued at input cost or the latest fundraising valuation,
plus cash and outstanding loan capital
MXC Capital Limited
Ian Smith
+44(0)20 7965 8149
Zeus Capital Limited (Nominated adviser and broker)
Giles Balleny
+44 (0)20 3829 500
About MXC Capital (www.mxccapital.com)
MXC is a specialist technology adviser and investor with a track
record of investing in and advising companies in the TMT sector. We
bring together a deep knowledge of technology, first-hand
experience of managing companies in the sector, an ability to make
meaningful investments and a highly experienced corporate advisory
team in support, all of which we combine to grow shareholder
value.
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END
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