THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL
16 April 2014
Frontier Developments plc
Acquisition and Proposed Secondary Placing
Frontier Developments plc (AIM: FDEV, "Frontier," the "Company"), a leading developer of video games with studios in Cambridge, UK and Halifax, Canada, has entered into a conditional agreement to acquire the business and assets of Professional Practice Automation LLP ("PPA"), a limited liability partnership in which David Braben is a member (the "Acquisition"). The assets to be acquired include the royalty rights in respect of the Elite video game franchise (the "Elite Royalty Rights"), the benefit of which are currently held by PPA. David Braben assigned these rights to the Company in June 2008 in return for a royalty based on Frontier's profits from the Elite video game franchise.
The consideration for the Acquisition is £5.09 million, which is to be satisfied by the allotment and issue to PPA, credited as fully paid, of 2,001,573 new ordinary shares of 0.5p each in the Company (together the "Consideration Shares").
The Consideration Shares will be issued at an effective price per share of 254.3 pence which represents the average mid-market closing price for the Company's ordinary shares for the five trading days preceding the date of this announcement.
The Company intends to send a circular to shareholders tomorrow convening a General Meeting to be held at 306 Science Park, Milton Road, Cambridge, CB4 0WG on Tuesday 6th May 2014 at 10.00 am, at which the resolutions to approve the Acquisition and the issue of the Consideration Shares will be proposed (the "Resolutions").
Application will be made for the admission of the Consideration Shares to trading on AIM ("Admission"). The Consideration Shares will rank pari passu in all respects with the existing ordinary shares of the Company and it is expected that admission of the Consideration Shares will become effective on 7th May 2014, subject to the shareholder resolutions being passed at the general meeting.
Details of the Acquisition
Under the terms of the conditional sale and purchase agreement dated 15 April 2014 (the "Acquisition Agreement"), PPA has agreed to sell and the Company has agreed to acquire the business and assets of PPA including the Elite Royalty Rights for £5.09 million. The consideration for the Acquisition is to be satisfied by the issue of the Consideration Shares in accordance with the terms and conditions of the Acquisition Agreement. The Consideration Shares will be issued at an effective price per share of 254.3 pence which represents the average mid-market closing price for the Company's ordinary shares for the five trading days preceding the date of this announcement.
Completion of the Acquisition Agreement is conditional on approval of the Acquisiton by shareholders at the General Meeting.
Proposed Secondary Placing
The Company has been advised by Mr. David Braben, Chief Executive of Frontier, of his intention to sell up to 1,600,000 Ordinary Shares in the Company at a price of 250p per Ordinary Share via an accelerated bookbuild placing (the "Placing"). This represents 5.1% per cent. of the issued share capital of Frontier.
Assuming that the maximum number of Ordinary Shares was sold pursuant to the Placing and the 2,001,573 Consideration Shares are issued on completion of the Acquisition, David Braben will be interested in 17,895,953 Ordinary Shares, of which 2,001,573 Ordinary Shares will be registered in the name of PPA and 15,894,380 held by him personally. Such interest will represent 53.7 % of the enlarged issued share capital of the Company following the issue of the Consideration Shares. The enlarged issued share capital of the Company following the issue of the Consideration Shares will be 33,354,897 Ordinary Shares.
The Placing will be managed by Canaccord Genuity Limited ("Canaccord Genuity") acting as bookrunner (the "Bookrunner"). The number of Ordinary Shares in the Placing ("Placing Shares") will be decided at the close of the accelerated bookbuilding period. The books for the Placing will open with immediate effect. Allocations are expected to be confirmed as soon as practicable following the closing of the books. The timing of closing of the books will be at the absolute discretion of the Bookrunner.
Canaccord Genuity and the Company have agreed to waive David Braben's obligations under the IPO lock-up agreement, which was due to expire on 15 July 2014, only in respect of the 1,600,000 Ordinary Shares that Mr. Braben is proposing to sell.
Related Party Transaction
The Acquisition (but not, for the avoidance of doubt, the Placing) constitutes a related party transaction under Rule 13 of the AIM Rules. The Independent Directors, having consulted the Company's nominated adviser, Canaccord Genuity, consider that the terms of the Acquisition are fair and reasonable in so far as Shareholders are concerned.
Enquiries:
Frontier Development |
+44 (0)1223 394 300 |
David Braben, CEO |
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David Walsh, COO Neil Armstrong, CFO |
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Canaccord Genuity |
+44 (0) 207 523 8000 |
Corporate Broking: Simon Bridges/Cameron Duncan |
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ECM: Tim Redfern |
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Instinctif Partners |
+44 (0) 20 7457 2020 |
Kay Larsen/Adrian Duffield |
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Canaccord Genuity Limited ("Canaccord") is acting as Nominated Adviser to the Company in connection with the Acquisition and will not be responsible to anyone other than its clients for providing the protections afforded to its clients, nor for providing advice in relation to the Acquisition, the contents of this announcement, or any transaction or arrangement referred to herein.
Canaccord is acting as Bookrunner on the Placing and will not be responsible to anyone other than its clients for providing the protections afforded to its clients, nor for providing advice in relation to the Placing, the contents of this announcement, or any transaction or arrangement referred to herein.
This announcement is for information purposes only and does not constitute or form part of an offer or invitation to acquire or dispose of any securities of Frontier, or constitute a solicitation of any offer to purchase or subscribe for securities in any jurisdiction, including the United States, Canada, Australia or Japan. Frontier's shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended, or under the securities legislation of any state of the United States and may not be offered or sold in the United States absent registration or an exemption from registration.
Frontier's shares may not, directly or indirectly, be offered or sold within the United States, Canada, Australia or Japan or offered or sold to a resident of Canada, Australia or Japan. No public offering of securities is being made in the United States.
This announcement is not for publication or distribution to persons in the United States of America, its territories or possessions or to any US person (within the meaning of Regulation S under the US Securities Act of 1933, as amended). Neither this announcement nor any copy of it may be taken or transmitted into Australia, Canada or Japan or to Canadian persons or to any securities analyst or other person in any of those jurisdictions. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian or Japanese securities law. The distribution of this announcement in certain other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions.
This announcement and any offer of securities to which it relates are only addressed to and directed at persons who are (1) qualified investors within the meaning of directive 2003/71/EC and any relevant implementing measures (the prospectus directive) and (2) who have professional experience in matters relating to investments who fall within article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") or are persons falling within article 49(2)(a) to (d) ("High Net Worth Companies, Unincorporated Associations, etc") of the Order (all such persons together being referred to as "relevant persons"). The information regarding the Placing set out in this announcement must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this announcement relates is available only to relevant persons and will be engaged in only with relevant persons.
