TIDMWAND
RNS Number : 3426Z
WANdisco Plc
15 May 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES,
AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION
WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.
FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND IS
NOT AN OFFER OF SECURITIES IN ANY JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
15 May 2023
WANdisco plc
(the "Company" and together with its subsidiary undertakings,
"WANdisco" or the "Group")
Exploring Funding Options
WANdisco (LSE: WAND), the data activation platform, announces
that the Board is considering a range of funding options as it
works towards the resumption of trading in the Company's shares on
AIM. Having reviewed the various options, the Board believes the
most appropriate strategy is to launch an equity fundraise towards
the end of June of $30 million (the "Proposed Fundraise") to build
balance sheet strength in order for the Company to take advantage
of the significant opportunities ahead. The Company will commence a
consultative process with investors to assess the potential for the
Proposed Fundraise, balancing all the different priorities and
risks.
The resumption of trading in the Company's shares on AIM will
occur as soon as practicable, following careful consideration by
the Board and in discussion with AIM Regulation. In any case, this
will be after the completion of the Proposed Fundraise. A further
announcement will be made as appropriate.
Working capital review
As of 30 April 2023, the Company had a net cash balance of $8.1
million with no debt facilities. The Board believes this provides
the Company with sufficient working capital until the middle of
July 2023.
The Board has undertaken a reorganisation and review process
that has indicated the need for difficult but necessary changes to
WANdisco's size to position it for growth and success. The Company
has announced a reduction of its global headcount by approximately
30% and reduced the Group's annualised cost base from $41 million
to circa $25 million. These actions are across all areas of the
Company's operational and geographic footprint.
Taking into account these actions to right-size the cost base,
and also a balanced assessment of the opportunity pipeline, the
Board has prepared updated forecasts and cash flow projections to
assess the Group's funding requirement to deliver on its strategy
towards profitable growth and ensure it targets a going concern
opinion in its 2022 audited accounts.
The Board believes that a fundraising of $30 million will allow
the Company to begin to take advantage of the opportunities ahead
and give sufficient capital to continue as a going concern. The
Proposed Fundraise will also give the Company a more robust balance
sheet which will give it the necessary financial flexibility to
provide all stakeholders and potential customers with confidence.
In this assessment, the Board has also taken into account the cost
of the necessary independent investigation and related processes
that have needed to take place as a result of recent events.
Whilst continuing to assess all viable financing options in the
best interests of all shareholders, the Board is of the view that
the Proposed Fundraise represents, in the limited timescale
available, the most realistic prospect for securing the finance
required to meet WANdisco's immediate and ongoing working capital
requirements to advance the development of its product strategy and
to enable WANdisco to progress towards achievement of the critical
cash-flow break even milestone.
Reasons for the Proposed Fundraise
With the appointment of Ken Lever as Interim Chairman, Stephen
Kelly as Interim CEO, and Ijoma Maluza as Interim CFO, the Board
has commenced a deep transformation recovery program (the
"Turnaround Plan"). Alongside cost reductions and working capital
improvements, the Board has determined that raising finance is
fundamental to the success of the Turnaround Plan given the current
cash runway extends only until mid-July 2023. WANdisco's business
growth needs to be underpinned by a resilient balance sheet and the
Proposed Fundraise will enable it to build balance sheet strength
to take advantage of the significant opportunities available to it.
On announcement of the launch of any fundraise, the Board will
provide investors with a further update on its strategic plans and
opportunities and the additional steps it will take to balance
expenses and set out the Company's path to cash break-even.
Turnaround plan
The Company is developing a programme around WANdisco's product
offering and market opportunity with its differentiated technology
to underpin a future towards profitable and sustainable growth,
which will be the foundation of the Company's value creation
strategy. Within the overall Turnaround Plan are specific
interconnected workstreams to cover all important aspects from
Sales & Marketing through to the Company's Governance and
Control environment. At this early stage, it would be premature to
consider timelines against each of the workstreams. Each workstream
will have an executive owner reporting to either the Chairman, Ken
Lever, or Interim CEO, Stephen Kelly. The programme will encompass
the following:
-- go to market structure, selling methodology and sales
governance processes driving growing sales pipeline and consistent
sales execution - this will include sales, marketing, pipeline
creation and partnerships to build the foundations towards
consistent sales execution. It is imperative for the Company's
long-term success to build a customer focused culture working
proactively with some of the world's biggest technology companies
as strategic partners.
-- enhancing the Board and Management to provide world-class
leadership for technology, sustainable growth, finance and
governance.
-- investor engagement with improved disclosures and
transparency. This will include timely updates for investors
between now and lifting of the suspension from AIM and after this
time, quarterly updates with meaningful KPI reporting as well as
improved financial disclosure.
-- headcount and organisation optimization where WANdisco will
focus on its human capital deployed to achieve the milestone of
cash flow break-even as the Company progresses towards sustainable
profitable growth.
-- market validation where the Company takes a realistic view of
the serviceable obtainable market based on product/market fit,
competitive differentiation, proof of value, commercial pricing,
and branding.
-- excellence in the Company's Governance and Control environment.
Product Strategy
WANdisco's business addresses two separate markets; "Application
Lifecycle Management" and "Data Integration":
Application Lifecycle Management ("ALM") : WANdisco enables
distributed software development organizations to collaborate more
efficiently. By combining WANdisco's patented technology and
intelligent load balancing software, application development
systems can deliver optimum performance, scalability and
availability for teams with a globally-distributed active-active
configuration across wide area networks.
Data Integration : WANdisco enables the transfer of arbitrarily
large volumes of data with full control and performance, without
disruption, to and among cloud storage and cloud analytic
platforms. Data transfer is a fundamental requirement for use cases
such as application migration and modernisation, continuous
availability of new data, disaster recovery, capacity bursting and
more. WANdisco's approach minimises the impact and overhead to the
environments generating, storing, and using data, allowing it to
scale and perform effectively, and reduces the costs and risks of
very large-scale data movement needs. It is scalable, high
performance, flexible and non-intrusive data transfer technology
that can maintain data concurrency for actively used systems.
WANdisco automates the movement of unstructured data to make it
available wherever it is needed (from and to on-premises data
centres, edge platforms, and the cloud) and does so without
disrupting current business operations even as that data is
actively changing.
WANdisco also continues to expand and enhance its Data Migrator
technology, with support for a broader range of integration with
large-scale storage platforms and services, wider availability on
cloud service provider marketplaces and strategic partners such as
Microsoft, Google, AWS, IBM and Oracle, specific integration with
leading cloud-centric data analytic platforms like Databricks and
Snowflake, and enhancements for performance, scale, and ease of use
to simplify implementation and help eliminate the risks that
organizations face in large and complex data transfer
requirements.
Market Demand
The Data Migrator technology falls in the "Data Management"
market category (excluding database management systems) as defined
by Gartner which is forecast to have a total market opportunity of
$10.6 billion in 2023. More specifically, the Data Migrator falls
within the market for "Data Integration Software", which is one of
five subsegments of Data Management and is a more applicable total
addressable market ("TAM") for WANDisco's products. The TAM for
Data Integration Software tools is $4.4 billion in 2023 with a
forecast average annual growth rate of 8.7% through 2027. The TAM
for Data Integration Software tools is forecast to be $6.3 billion
in 2027.
Shareholder Approval
Having considered various options, the Board believes the
Proposed Fundraise is the most appropriate strategy to build
balance sheet strength and to take advantage of the Company's
significant opportunities ahead. The Board will continue to review
all available and proposed funding options as it prepares for the
Proposed Fundraising and reserves the right to change its funding
strategy should a more appealing and executable solution become
apparent.
Given the quantum of the Proposed Fundraise, and uncertainty of
the issue price, it is possible that the Company may not currently
have sufficient shareholder authorities to issue the required
number of Ordinary Shares to successfully deliver the Proposed
Fundraise (the "New Ordinary Shares"), therefore a General Meeting
will be required for Shareholders to authorise the allotment of New
Ordinary Shares on a non-pre-emptive basis.
The Board strongly believes there are significant benefits in
asking for shareholder authority to issue shares for the Proposed
Fundraise in advance, rather than following the announcement of the
Proposed Fundraise with the admission of the New Ordinary Shares
subject to approval. This is because the Board cannot realistically
launch the Proposed Fundraise until it is confident that the
suspension in the Company's shares will be lifted at the point in
time the New Ordinary Shares are issued, or shortly thereafter.
Following consultation with AIM Regulation it is the Company's view
that the suspension will only be lifted following the publication
of the Company's annual report and audited accounts for the year
ended 31 December 2022. The Company does not expect that the audit
will be completed until the end of June 2023. Thus, launching the
Proposed Fundraise followed by a general meeting to approve the
allotment of New Ordinary Shares could result in the cash runway
ending before the Company receives the net proceeds of the Proposed
Fundraise (the "Net Proceeds"). As a result, the Board strongly
believes that seeking the requisite shareholder authorities prior
to the launch of the Proposed Fundraise greatly increases the
probability of a successful completion of the Proposed Fundraise
and builds some further contingency into the timetable.
The Board also believes that its preferred strategy provides the
following benefits for investors:
-- reduces the time period between investors committing to
subscribe for New Ordinary Shares and those shares being admitted
to trading on AIM;
-- reduces the time period between investors committing to
subscribe for New Ordinary Shares and the lifting of the
suspension;
-- reduces conditions precedent following the announcement of
the Proposed Fundraise, which the Board believes is particularly
valuable given the limited cash runway the Company currently has;
and
-- importantly, maximises the chances of success of the Proposed Fundraise.
The Board intends to issue the New Ordinary Shares at a Price
(the "Issue Price") that minimises dilution for existing
shareholders whilst also ensuring the Company raises sufficient
capital. Until the Board engages with investors with further
information on the Proposed Fundraise and the Company's strategy
going forward, the Board will have no certainty as to the Issue
Price per new ordinary share or likely range of outcomes although
the intention is to issue shares at a value determined through the
accelerated bookbuild process. As such, the Board will need to seek
authority for more shares on a non-pre-emptive basis than it will
likely need given the Issue Price uncertainty to provide
flexibility and the greatest prospect of successful execution.
Use of proceeds
Further details on the use of the Net Proceeds will be announced
at the time of launch of the Proposed Fundraise, but in the near
term, following completion of the Proposed Fundraise, the Net
Proceeds will be used:
-- to underpin marketing, sales and R&D infrastructure and
enhance business development to accelerate growth of the sales
pipeline, commercial partnerships, and new customer launches;
-- for general working capital purposes providing greater
commercial flexibility to WANdisco; and
-- to strengthen the Company's balance sheet to provide confidence for all stakeholders.
In the medium term, the Company plans to:
-- expand the application of the Data Migrator technology to
additional sources of large-scale data, including on-premises,
cloud and edge storage systems thus increasing the range of markets
that Data Migrator can address;
-- provide additional methods for customers to adopt WANdisco's
technology, including expansion of the software as a service model
employed for the Data Migrator for Azure offering to be suitable
across multiple cloud environments and expanding opportunities with
other cloud vendors and data platform providers; and,
-- enhance technical capabilities that add value for customers
integrating with analytic data platforms and machine learning
pipelines that benefit from data catalogues, metadata, and model-
management.
Ken Lever, Chairman of WANdisco plc, commented:
"We have been working at pace to deal with the issues the
company has faced and create a positive path forward. A lot has
been achieved and I am particularly pleased to now have a world
class CEO and CFO in place, who are both energised to see the
Company through this difficult period. Having now been in the
business for some six weeks, there is no doubt in my mind that the
Company should have a very bright future given its differentiated
technology. However, improvements across sales and marketing need
to be made to properly take advantage of the opportunity. To do
this, the business needs to be urgently properly capitalised and so
today we are announcing our desire to raise $30 million towards the
end of June. Unfortunately, much of this capital requirement is a
direct result of the issues that led to our announcement on 9
March. On completion of the fund raise I believe that the Company
can have a bright future".
Enquiries:
WANdisco plc via FTI Consulting
FTI Consulting
Rob Mindell / Kwaku Aning / Tom +44 (0)20 3727
Blundell / Matt Dixon 1137
+44 (0)20 7710
Stifel (Nomad and Joint Broker) 7600
Fred Walsh / Richard Short / Tom
Marsh
Liberum (Joint Broker) +44 (0)20 3100
Max Jones / William Hall 2000
About WANdisco
WANdisco is the data activation platform for accelerating
digital transformation at scale. WANdisco makes infinite data
actionable across clouds and enterprises in real time. WANdisco
customers unleash the business value of the cloud with zero
downtime, data loss, or disruption to fuel AI and machine learning,
create new services, and transform businesses. For more information
about WANdisco, visit: www.wandisco.com
IMPORTANT NOTICES
THIS ANNOUNCEMENT, INCLUDING THE APPICES AND THE INFORMATION
CONTAINED IN THEM, IS RESTRICTED AND IS NOT FOR PUBLICATION,
RELEASE, TRANSMISSION, FORWARDING OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF
AMERICA, ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED
STATES OR THE DISTRICT OF COLUMBIA (COLLECTIVELY, THE "UNITED
STATES"), AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER
JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION
WOULD BE UNLAWFUL. FURTHER, THIS ANNOUNCEMENT IS FOR INFORMATION
PURPOSES ONLY AND IS NOT AN OFFER OF SECURITIES IN ANY
JURISDICTION.
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the company's obligations under Article 17 of MAR.
This announcement or any part of it does not constitute or form
part of any offer to issue or sell, or the solicitation of an offer
to acquire, purchase or subscribe for, any securities in the United
States, Canada, Australia, Japan or South Africa or any other
jurisdiction.
The securities referred to herein have not been and will not be
registered under the US Securities Act of 1933, as amended (the
"Securities Act"), or with any securities regulatory authority of
any State or other jurisdiction of the United States, and may not
be offered, sold or transferred, directly or indirectly, in or into
the United States except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the
Securities Act and in compliance with the securities laws of any
State or any other jurisdiction of the United States. No public
offering of the New Ordinary Shares will be made in the United
States.
Certain statements contained in this announcement constitute
"forward-looking statements" with respect to the financial
condition, results of operations and businesses and plans of the
Company and WANdisco. Words such as "believes", "anticipates",
"estimates", "expects", "intends", "plans", "aims", "potential",
"will", "would", "could", "considered", "likely", "estimate" and
variations of these words and similar future or conditional
expressions, are intended to identify forward-looking statements
but are not the exclusive means of identifying such statements.
These statements and forecasts involve risk and uncertainty because
they relate to events and depend upon future circumstances that
have not occurred. There are a number of factors that could cause
actual results or developments to differ materially from those
expressed or implied by these forward-looking statements and
forecasts. As a result, WANdisco's actual financial condition,
results of operations and business and plans may differ materially
from the plans, goals and expectations expressed or implied by
these forward-looking statements. No representation or warranty is
made as to the achievement or reasonableness of, and no reliance
should be placed on, such forward-looking statements. The
forward-looking statements contained in this announcement speak
only as of its date. The Company, its directors, Stifel Nicolaus
Europe Limited ("Stifel") and Liberum Capital Limited ("Liberum"),
their respective affiliates and any person acting on its or their
behalf each expressly disclaim any obligation or undertaking to
update or revise publicly any forward-looking statements, whether
as a result of new information, future events or
otherwise, unless required to do so by applicable law or
regulation, the Financial Conduct Authority ("FCA") or London Stock
Exchange plc ("LSE").
This announcement has been issued by and is the sole
responsibility of the Company. No representation or warranty,
express or implied, is or will be made as to, or in relation to,
and no responsibility or liability is or will be accepted by Stifel
or Liberum or by any of their respective affiliates or any person
acting on its or their behalf as to, or in relation to, the
accuracy or completeness of this announcement or any other written
or oral information made available to or publicly available to any
interested party or its advisers, and any liability therefore is
expressly disclaimed.
This announcement does not constitute a recommendation
concerning any investor's investment decision with respect to the
Company's securities. Any indication in this announcement of the
price at which ordinary shares have been bought or sold in the past
cannot be relied upon as a guide to future performance. The price
of shares and any income expected from them may go down as well as
up and investors may not get back the full amount invested upon
disposal of the shares. Past performance is no guide to future
performance. This announcement does not identify or suggest, or
purport to identify or suggest, the risks (direct or indirect) that
may be associated with an investment in the Company's securities.
The contents of this announcement are not to be construed as legal,
business, financial or tax advice. Each investor or prospective
investor should consult their or its own legal adviser, business
adviser, financial adviser or tax adviser for legal, financial,
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Persons (including, without limitation, nominees and trustees)
who have a contractual or other legal obligation to forward a copy
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Neither the content of the Company's website (or any other
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into or forms part of this announcement.
Each of Stifel and Liberum are authorised and regulated in the
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exclusively for the Company and no one else in connection with the
matters described in this announcement, the contents of this
announcement or any other matters described in this announcement.
Neither Stifel nor Liberum will regard any other person as its
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matters described in this announcement and will not be responsible
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This announcement has been prepared for the purposes of
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