RMR Rome Resources Plc

RNS Number:3168L
RMR PLC
9 October 2001

                                   RMR PLC



   RMR PLC ( "RMR" or the "Company"), the specialist software provider for
e-learning, knowledge management and online events, announces the acquisition
of Learning Angles Ltd for an initial consideration of 6,000,000 RMR ordinary
                                    shares

RMR has today agreed to acquire Learning Angles Ltd for an initial
consideration of 6,000,000 RMR ordinary shares (valued at #360,000 based on
yesterday's closing price of 6p per share). The acquisition will enable RMR to
develop and market Elevate, its own comprehensive e-learning software package,
by adding the content of Learning Angles' business to offer an integrated
solution to clients.

Learning Angles is a recently formed company established to take advantage of
e-learning opportunities. It has developed a core competence in producing
quality, rich content (video, text and 3D graphics) and delivering it over a
number of platforms. Learning Angles targets the banking, insurance, retail,
pharmaceuticals and public sectors with applications for executive education,
induction and product training.

RMR will issue between 2,000,000 and 12,000,000 further Ordinary shares to the
vendors as consideration for Learning Angles if the combined business achieves
a result before tax of between break-even and #2.5 million in any one
financial year up to 28 February 2004. The vendors have agreed not to dispose
of any consideration shares, save in certain circumstances, for two years from
the date of issue of the initial consideration shares and to retain further
consideration shares until at least 31 August 2004.

The senior management of Learning Angles are Chris Thomas (Sales and Marketing
Director), Rhodri Williams (Commercial Director) and Dr Gwyn Jones (part time
Executive Chairman) who had previously established and run the e-learning
business of Agenda Multimedia Limited. The merger is conditional on the
approval of RMR's shareholders. Following completion of the acquisition Chris
Thomas will join the RMR board as Sales and Marketing Director and Dr Gwyn
Jones will join RMR as a Non Executive Director.

Commenting on the acquisition, Michael Mills, RMR Chairman said: "This is an
excellent acquisition for RMR as it gives us the ability to combine Learning
Angles' rich content with our learning management software, Elevate, to offer
clients an integrated e-learning package at a time when the market is growing
quickly. The acquisition also brings us an established revenue stream and an
experienced sales team to help market our other products including online
conference software."

For further information:

RMR

Michael Mills, Chairman 01865 733733

Weber Shandwick

John Wade 0207 329 0096






        PRESS RELEASE

        9 October 2001

        RMR PLC



PROPOSED ACQUISITION OF LEARNING ANGLES

Introduction

RMR plc ("RMR") is pleased to announce that it has conditionally agreed to
acquire the entire issued share capital of Learning Angles Limited ("Learning
Angles"), a corporate e-learning business.

Learning Angles is being acquired from its founder directors/shareholders,
Chris Thomas, Rhodri Williams and Dr Gwyn Jones. The initial consideration is
6 million ordinary shares in RMR ("Shares"). Further consideration of between
2 million and 12 million shares is payable in the event that profits in the
period to 28 February 2004 achieve certain agreed thresholds.

Background to and reasons for the Acquisition

Strategic review

The original RMR business model was centred around being a producer and
developer of its own self-commissioned conferences using its internally
developed software. Revenues were derived from the sale of advertising space
on these events. In addition, web development work was carried out as an
ancillary revenue stream. This business model, in particular the telesales
format used to sell virtual exhibition stands and sponsorship space, proved to
be unsuccessful coinciding also with a decline in online advertising. As a
result restructurings were undertaken in January and June 2001 that resulted
in RMR moving away from producing self-commissioned conferences to being a
provider of information solutions. These restructurings have reduced the
number of employees from 175 in January 2001 to 47 in August 2001.

Following recent changes in the composition of the Board, a strategic review
has been undertaken over the last month. This review looked critically at
RMR's existing operations, product offering and potential markets and the
routes to market for these products. The role of acquisitions and strategic
partnerships was also considered as well as the level of resources necessary
to support the new strategy.

The Board concluded that RMR's business proposition should be as a provider of
technology and content solutions to organisations with complex information
needs. In the first instance, RMR will use its existing Elevate conference and
website design products of which Elevate is potentially the most promising
source of revenue. Other complementary products may be acquired and it is
expected that these acquisitions will be focused initially on e-learning
products with an emphasis on customers in the financial sectors.

RMR's revenue strategy is to build a sustainable customer base which will
include well-financed organisations such as large corporates, financial
institutions, government and professional bodies. In this regard, it is the
intention of the Board to seek to acquire similar businesses with proven sales
resource and develop long-term relationships with strategic partners who can
provide a sales channel. The acquisitions policy will be focused on businesses
that can provide a route to market for RMR's software products and that do not
require a significant initial cash investment or increase RMR's cash exposure.

RMR's target market for training and professional development products is
large, well established and growing. RMR's potential customers are
geographically diverse organisations typically with distributed well-trained
staff and their own large customer base. RMR's software will enable them to
solve their information and training needs and reach a wider audience in a
more cost-effective way than traditional systems and as a result reduce
unproductive travelling and out-of-office time.

The immediate requirement is to conserve cash by reducing cash outflow while
creating a profitable sales line. Accordingly RMR is in the process of
implementing a plan for a further reduction of its UK payroll costs and
overheads.

The e-learning market

The e-learning market in Western Europe is anticipated to grow to
approximately #3 billion by 2004 as companies start to take commercial
advantage of the products on offer. Much of this growth is anticipated to come
from a switch to online training as organisations recognise the significant
opportunities presented by e-learning including:


  * Increased quality and value of learning achieved through greater student
    access and combination of appropriate supporting content, learner
    collaboration and interaction, and online support.

  * Increased reach and flexibility enabling learners to engage in the
    learning process anytime, anyplace and on a just-in-time basis.

  * Decreased cost of learning delivery, and reduced travel, subsistence
    costs and time away from work.

  * Increased flexibility and ability to respond to evolving business
    requirements with rapid roll-out of new and organisational specific
    content to a distributed audience.

The ability of organisations to realise these benefits depends significantly
on the product offering and this is encouraging organisations to look for an
integrated solution that combines content with a comprehensive delivery
platform which includes a learning management system.

A learning management system typically incorporates functionality for managing
courses and course registration, tracking student registration, managing
course information, course scheduling and administration and reporting.

"Elevate"

RMR has developed Elevate to provide a comprehensive e-learning package based
around the Internet and which can be tailored to individual client's needs.
Elevate contains four component parts: a course builder, learner interface,
tutor/trainee interaction system and a learning management system.

Version 1 of Elevate was completed in August 2001 and is currently being
marketed to companies and organisations. RMR recognises that further
development work is required to create a product which has the functionality
and architecture to meet the requirements of large corporates and is
progressing development work to achieve this.

In recognition of this, the management of RMR has been working for the last
six months on projects in the e-learning area with the management of Learning
Angles.

Information on Learning Angles

Introduction

Learning Angles is a recently-formed company established to take advantage of
opportunities in the e-learning market place which operates from a small
office in central London. The senior management of Learning Angles were
previously involved in establishing and operating Agenda Multimedia Limited's
("Agenda Multimedia") e-learning business. Agenda Multimedia, located in South
Wales, is a TV production company that was founded in 1989 and has established
a reputation for producing high quality, factual television programmes for the
broadcaster Channel 4 in Wales.

In late 1998, while working for Agenda Multimedia, the current management of
Learning Angles recognised that the rapidly growing multimedia market provided
additional opportunities for their creative, technical and production skills.
They instigated a strategic review of the business with a particular focus on
the benefits that broadband might offer.

This review identified many opportunities in the emerging broadband markets
and concluded that Agenda Multimedia should focus on those in corporate
broadband by building a corporate e-learning business. This was established
last year and has been funded until recently by Agenda Multimedia. Learning
Angles was recently established by its current management team with a view to
developing its e-learning business independently.

Management

The senior management team of Learning Angles is headed up by Chris Thomas
(sales and marketing director), Rhodri Williams (commercial director) and Dr
Gwyn Jones (part-time executive chairman).

Chris Thomas has a background in turnarounds having been CEO of a number of
companies in the chemicals industries including Kalon (France) S.A., a
subsidiary of Kalon plc. Chris has been European Director of the Inward
Investment Division at the Welsh Development Agency and has also operated as a
management consultant with Deloitte Haskins & Sells and other consultancies in
the technology sector.

Rhodri Williams was a co-founder of Agenda Multimedia in 1989. He has been
involved in programme production and developing content and has also been
responsible for developing and managing Agenda Multimedia's IT infrastructure.
Since 1998, Rhodri has initiated that company's expansion into e-learning and
has been responsible for market research in the US and UK and overseen the
design and production of a delivery platform.

Dr Gwyn Jones has a PhD in computer science and has had a successful career in
developing and growing profitable software companies. He has been on the main
boards of software and media companies including ACT Group plc, HBOC (UK)
Limited and Real Radio. He has also been on the boards of Tesco plc, the BBC,
the Welsh Development Agency and is currently a director of Invesco English
and International Trust plc.

Products

Learning Angles' management has developed a core competence in producing
quality rich content (video, text and 3D graphics) and delivering it over a
number of platforms. Their background in TV production means that they believe
Learning Angles has the creative and production skills to generate engaging
video and audio training material to high standards accessed by personal
computer.

Learning Angles has two product propositions for customers. These are:


  * e-enabled text based browser applications with interactive
    functionality.

  * Video, text and 3D graphics (rich content) with full interactive
    functionality.

Training material is available through relationships with organisations such
as Video Arts (soft skills), Open Learning Company (executive education) and
other content owners. Learning Angles is able to develop specific end-user
applications and avoid having to make a conceptual sell each time to a new
prospect e.g. in the financial sector applications can be developed for
executive education, induction and product training.

Market strategy

Learning Angles' strategy is to establish a market presence as a rich content
provider with large companies and organisations. It targets sectors such as
banking, insurance, retail, pharmaceuticals and the public sector as these
tend to have distributed staff and a requirement for these staff to adhere to
common standards which are regularly being updated.

In targeting these sectors Learning Angles' primary route to market is
intended to be direct selling by a sales team to leads generated from the
personal network of Learning Angles' senior management and referrals from
partnership arrangements with content providers. Through these contacts
Learning Angles has progressed transactions with "blue chip" organisations and
companies such as UBS, Deloitte & Touche and University for Industry.

Learning Angles expects to engage with organisations initially on the basis of
a pilot project and as the effectiveness of the training material is
recognised it anticipates more substantial follow-up business.

Financial information

As described above, Learning Angles is a recently-formed company which has
only just started trading and therefore has no financial trading record. The
corporate e-learning business conducted at Agenda Multimedia by the management
team that later formed Learning Angles however generated orders of
approximately #500,000 from March 2000 to 31 August 2001. In the period from
its formation in September 2001 to 28 February 2002, the management of
Learning Angles expect it to break-even and they anticipate strong growth in
sales and profitability in the following years.

Other than the intellectual property of Learning Angles' management team, RMR
will not be acquiring any assets or taking on any borrowings or creditors in
relation to its acquisition of Learning Angles.

Benefits of the Acquisition

While Learning Angles has a market presence as a rich content provider, its
management believe that it is missing sales opportunities as it is not in a
position to offer a Learning Management System ("LMS"). As described
previously, organisations are increasingly looking for an integrated training
solution (content and LMS) and this has led both content and LMS providers to
form alliances in order to be able to offer a "one-stop" solution to their
clients. RMR's Elevate software is an e-learning platform that can be
developed into a fully functional LMS used by Learning Angles to provide
integrated solutions to its clients notably but not exclusively in the
financial sector.

The purchase of Learning Angles forms the first part of RMR's new strategy of
focusing on "Elevate", its e-learning software, to take advantage of the
market demand for technology supported training. The Board believes that the
acquisition of Learning Angles provides an excellent opportunity to develop
and market Elevate in a cost-effective manner whilst minimising risk to RMR's
capital funds. RMR already has a good working relationship with the management
of Learning Angles as a result of recent collaborative projects. The Board is
confident that using Learning Angles' software development and sales expertise
in addition to having access to its "blue chip" relationships should bring
significant benefits to the financial performance of RMR.

Principal terms of the Acquisition

RMR are acquiring the entire issued share capital of Learning Angles which
includes the corporate e-learning business and its three founder directors.
The initial consideration for this purchase comprises the issue of 6 million
Shares.

There is also a further performance-related consideration of between 2 million
and 12 million Shares which becomes payable depending on the achievement of
specified profit thresholds if the combined business of RMR and Learning
Angles achieves a result before tax of between break-even and #2.5 million in
any one financial year up to 28 February 2004.

Lock-in arrangements

The shareholders of Learning Angles have entered into lock-in agreements
regarding the disposal of the Shares they are to receive under the terms of
the Acquisition. These provide that Shares issued in consideration for the
Acquisition may not be sold or transferred for a period of two years from the
date of their issue in respect of the initial consideration or before 31
August 2004 in respect of the performance-related consideration, subject to
certain limited exceptions allowing a disposal, inter alia, in the event of an
offer for the Company or the death of the relevant individual.

Board changes

Kazia Kantor and Robert Jackson resigned as non-executive director and chief
executive officer respectively on 14 September 2001 and Michael Mills was
appointed executive chairman with effect from 17 September 2001. Ned Carroll
also joined the Board as a non-executive director with effect from 8 October
2001. Dr Mark Smith, one of RMR's original co-founders, has decided to step
down as an executive director with effect from 31 October 2001 and he has
agreed to provide consulting services to the Company. Derek Cormack will
continue in his role as finance director.

It is intended that, following completion of the acquisition of Learning
Angles, Chris Thomas and Dr Gwyn Jones will join the Board. Chris Thomas will
join the Board as sales and marketing director. Gwyn Jones will join in a
non-executive capacity and will also provide consultancy services to RMR.

The terms of Chris Thomas' intended service contract provide that the contract
will be terminable by either party on three months' notice, thereafter the
contract will be terminable on six months' notice given by either party to the
other at any time. The contract will contain provisions for early termination,
inter alia, in the event of a breach by the director. The basic annual salary
payable to Chris Thomas is #100,000 per annum to be reviewed annually (without
any obligation to increase the same).

Extraordinary General Meeting

Notice of an Extraordinary General Meeting to approve, inter alia, the
acquisition of Learning Angles will be posted with a circular to shareholders
shortly. Irrevocable undertakings to vote in favour of all the resolutions to
be proposed at the Extraordinary General Meeting have been received from
Shareholders holding 20,411,504 Shares in aggregate representing 37.0% of the
Company's existing issued share capital.





END



Press contacts:

RMR

Michael Mills, Chairman 01865 733733

Weber Shandwick

John Wade 0207 329 0096

Rome Resources (LSE:RMR)
Historical Stock Chart
From Jun 2024 to Jul 2024

Rome Resources (LSE:RMR)
Historical Stock Chart
From Jul 2023 to Jul 2024