TIDMCCAP
RNS Number : 4904H
Conduity Capital PLC
04 August 2021
4 August 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED
UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014
WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL)
ACT 2018, AS AMENDED. ON PUBLICATION OF THIS ANNOUNCEMENT, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
For immediate release
CONDUITY CAPITAL PLC
("Conduity" or "the Company")
Proposed reverse takeover of Smarttech247
AIM Rule 15 update
The Company is pleased to announce that Conduity and
Smarttech247, incorporated in the Republic of Ireland as Zefone
Limited, have entered into a non-binding heads of agreement to work
towards the possible acquisition of Smarttech247 by the Company for
a total consideration of GBP33.5 million, to be satisfied by the
issue of new ordinary shares in Conduity. ("Proposed Acquisition").
Smarttech247 is an established global artificial intelligence
("AI") based cybersecurity business specialising in automated
managed detection and response. Should such a transaction proceed
on the currently envisaged terms, it would be classified as a
reverse takeover in accordance with the AIM Rules for Companies
("RTO").
The Proposed Acquisition remains subject to contract and
satisfactory completion of the necessary due diligence and, at this
stage, there is no guarantee that the Proposed Acquisition will
complete.
Information on Smarttech247
Smarttech247 is an established company in automated managed
detection and response cybersecurity - a managed security service
that provides threat intelligence, threat hunting, security
monitoring, incident analysis, and incident response with a
significant AI overlay - with a successful track record of revenue
growth and profitability and is positioned at the intersection of
three major cybersecurity growth markets:
-- Security threat incidents;
-- Growth of cloud adoption amongst both large and small-medium
enterprises; and
-- Proliferation of cyber-security data generation that needs to
be integrated.
Smarttech247 has over 100 technology partners, including Tanium
and Crowdstrike, and 50 clients based in Europe and the US.
Smarttech247 has contracts with enterprises that include the
Institute of Cancer Research UK, Aryzta Global and the Royal
College of Surgeons Ireland.
On 23 June 2021, Smarttech247 also announced that it had been
awarded a multi-year contract for managed cybersecurity services by
a Fortune Global-1000 advanced manufacturing company, employing
over 100,000 staff. Furthermore, Smarttech247 has just been awarded
a purchase order under this contract to the value of EUR6 million
for plant level operational technology cybersecurity services.
For the period ended 31 July 2020, Smarttech247 reported audited
profits before taxation of EUR829,000, revenue of EUR4.8 million
and had net assets of EUR712,084. These figures represent a
significant increase compared to the previous year and the
management of Smarttech247 believe that the current year to 31 July
2021 will demonstrate further substantial progress as they build on
the stable of internally developed automated security products
currently consisting of the successful ThreatTub (threat and
vulnerability modelling and management) and NoPhish (an AI driven
phishing response solution to threat emails).
More information on Smarttech247 can be found on its website at
www.smarttech247.com .
Information on the cybersecurity industry
There is currently a high level of cyber security threat
incidents which is creating a need for new and better security
products and services. Furthermore, cloud migration means that
companies need to redesign their existing systems which is
generating new cybersecurity requirements.
Cybersecurity applications are also being re-engineered to
include cybersecurity reporting which is increasing the generation
of cybersecurity data. A shortage of qualified specialist skills
and associated cost is leading companies to adopt external
automated cyber-security platforms. These trends are creating
increasing demand for AI based cloud cybersecurity platforms which
can be provided by Smarttech247. Fortune Business Insights
currently value the cybersecurity market at US$153 billion, which
is growing at 12% per annum and therefore projected to be worth
US$366 billion by 2028.
AIM Rule 15
On 2 October 2020, Conduity became an AIM Rule 15 cash shell and
as such is required to make an acquisition or acquisitions which
constitutes a RTO under AIM Rule 14, or be re-admitted to trading
on AIM as an investing company under the AIM Rules (which requires
the raising of at least GBP6 million), on or before the date
falling six months from completion of the Disposal; failing which,
the Company's Ordinary Shares would then be suspended from trading
on AIM pursuant to AIM Rule 40. As no RTO had been completed, the
London Stock Exchange suspended trading in the Company's ordinary
shares on AIM, pursuant to Rule 15 of the AIM Rules, at 7.30 a.m.
on Tuesday, 6 April 2021.
Shareholders should note that, in the event that no RTO, or
conversion to an AIM Rule 8 Investing Company, is completed in the
six months from 6 April 2021, the London Stock Exchange will cancel
the admission of the Company's ordinary shares to trading on AIM
("Cancellation").
Given the status of the Company's progress with the Proposed
Acquisition and the time needed to complete the necessary due
diligence and relevant documentation to effect a RTO, even if it
decided to proceed, it may not be able to complete this process
before Cancellation. In these circumstances, the Directors may
decide to complete the Proposed Acquisition after Cancellation and
seek to re-apply to join AIM.
Greg Collier, Chairman of Conduity, said:
"Cybersecurity is a fast-growing market, with threats to
organisations increasing on a daily basis. We are therefore very
excited to be working with Smarttech247 towards a RTO which we
believe would be transformational for Conduity. Smarttech247 is
already an established company in the sector with a successful
track record of growing revenue and profitability. Going forward,
we firmly believe that both the company and the sector are poised
for further significant growth."
Ronan Murphy , Chief Executive of Smarttech247, said:
"We are very pleased to have been introduced to Conduity by our
advisers, Fortified Advisory, as a potential party to help achieve
a listing for Smarttech247 via a RTO. We are therefore very much
looking forward to working with the Board of Conduity towards the
completion of the transaction which, I believe, will enable us to
continue to drive the business forward to the next level.
We believe that the Smarttech247 business is well placed to
become a global leader in the automated managed detection and
response space. We have a proven track record, strong revenues and
growth plans and a fantastic book of clients and we believe that
working now with Conduity will help us to achieve our business
goals."
Further announcements will be made as appropriate.
End
For further information please contact:
Conduity Capital Plc
Gregory Collier, Non-Executive Chairman +44 (0) 7830
www.conduitycapital.co.uk 182501
SPARK Advisory Partners Limited (Nominated Adviser)
Mark Brady
Neil Baldwin +44 (0) 203
www.sparkadvisorypartners.com 368 3551
Peterhouse Capital Limited (Broker)
Eran Zucker/Lucy Williams +44 (0) 207
www.peterhousecap.com 496 0930
Fortified Advisory (A dviser and broker to Smarttech247
)
Mark Wheeler +44 (0) 20 3883
www.fortifiedadvisory.com 4446
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