Acquisition, Proposed Placing and Open Offer

Rosslyn Data Technologies plc

("Rosslyn" or the "Company")

 

Acquisition

Proposed placing to raise up to £ 4.5 million

Open offer to raise up to £0.5 million

Notice of General Meeting

 

Rosslyn announces that it has conditionally agreed to acquire Integritie (UK) Limited for a total initial consideration of £2.588 million and has conditionally raised a total of £2.29 million, before expenses, by way of a placing of up to 50,955,000 new ordinary shares at 4.5 pence (the "Firm Placing").  In addition the Company has conditionally raised £2.21 million before expenses by way of a placing of up to 49,045,000 new ordinary shares at 4.5 pence each (the "VCT/EIS Placing") and also announces an Open Offer to raise up to approximately £0.5 million.

Acquisition Highlights

·     Initial consideration of £2.588 million plus an earn out of up to £750,000 on revenue targets

·     Complementary products and customers with Rosslyn's existing business

·     Firm and VCT/EIS Placings to raise up to £4.5 million to satisfy initial consideration and to provide general working capital

·     Enlarged recurring revenue base expected to enhance Company's quality of earnings

·     Expected near term cost synergies

·     Cross selling opportunities

 Transaction Highlights

·     The Transaction, which is subject to Shareholder approval, will raise gross proceeds of up to £5.0 million*

·     Placing of up to 100,000,000 Ordinary Shares at the Placing Price of 4.5 pence per share

·     Open Offer for an aggregate of 11,142,031 Offer shares on the basis of 5 new Ordinary Shares for every 34 Existing Ordinary Shares at 4.5 pence each

* On the assumption that the Open Offer is fully subscribed

The net proceeds of the Firm Placing and Open Offer will be used to part fund the acquisition of Integritie and the net proceeds of the VCT/EIS placing will go towards general working purposes.

Roger Bullen, CEO commented: "We are delighted to announce the acquisition of Integritie.  Integritie is a strategically important acquisition for us giving us the ability to analyse unstructured as well as structured data.  Integritie's customer base is complementary to our own and the acquisition will enable us to cross sell both structured and unstructured data services to an enlarged customer base.  In due course, the acquisition should enable us to extract significant synergies not only through cross selling but also operational efficiencies and cost savings as a result of the increased scale."

 

An explanatory circular (the "Circular") is today being posted to Shareholders in relation to the Transaction. The same definitions apply throughout this announcement as are applied in the Circular.  The Circular will be sent to shareholders today and will be available on the Company's website: www.rosslynanalytics.com

 

Rosslyn Data Technologies plc	Roger Bullen, Chief Executive Officer	+44(0)20 7138 3203 +44(0)77 7162 3345
	Lance Mercereau Chief Marketing Officer	+44(0)7788 183273
Cenkos Securities - Nominated Adviser, Broker	Stephen Keys/Camilla Hume	+44(0)20 7397 8924

 

Notes to Editors

Rosslyn Data Technologies plc, (AIM: RDT), a leading provider of a Cloud-based enterprise data analytics platform, was founded in 2005 by Charles Clark and Hugh Cox. Business Intelligence was ranked first in the top ten technology priorities for Chief Information Officers in 2012 by Gartner. The Company provides analytical services by combining four key technologies: data extraction; cleansing; enrichment; and visualisation, through a single cloud platform enabling users with detailed data to make more informed decisions. Rosslyn's RAPid platform is the Group's primary product available to its multinational customers, including Aberdeen Asset Management plc, Babcock Corporate Services plc, Xerox Business Services and Coca-Cola Enterprises, Inc. Rosslyn Data Technologies plc is the ultimate holding company of the Group and owns 100 percent of Rosslyn Analytics Limited.

 

Further information can also be found on the Company's website at:  www.rosslynanalytics.com

 

 

 

 

 

 

 

 

 

 

 

1.             INTRODUCTION

The Company has today announced a conditional VCT/EIS Placing to raise approximately £2.21 million (before fees and expenses) by the issue of 49,045,000 new Ordinary Shares at the Placing Price of 4.5 pence per Ordinary Share. 

The Company also proposes to raise £2.29 million (before fees and expenses) through a conditional Firm Placing by the issue of 50,955,000 new Ordinary Shares at the Placing Price.

Furthermore, in order to provide Shareholders who have not taken part in the VCT/EIS Placing and Firm Placing with an opportunity to participate in the proposed issue of new Ordinary Shares, the Company is providing all Qualifying Shareholders with the opportunity to subscribe at the Placing Price for an aggregate of 11,142,031 Offer Shares, to raise up to £0.5 million, on the basis of 5 New Ordinary Shares for every 34 Existing Ordinary Shares held on the Record Date, at the Placing Price, payable in full on acceptance.

The Transaction is conditional, inter alia, upon Shareholders approving the Resolutions at the General Meeting, compliance by the Company in all material respects of its obligations under the Placing Agreement and the admission of the VCT/EIS Placing Shares, the Firm Placing Shares, the Offer Shares and the Consideration Shares to trading on AIM.

The Resolutions are contained in the Notice of General Meeting which can be found at the end of the Circular.  Admission is expected to occur no later than 8.00 a.m. on 15 May 2017 or such later time and/or date as Cenkos and the Company may agree. The VCT/EIS Placing and the Firm Placing are not underwritten.

The Open Offer provides Qualifying Shareholders with an opportunity to participate in the proposed issue of the New Ordinary Shares on a pre-emptive basis whilst providing the Company with additional capital to invest in the business of the Group. The Placing Price is at a discount of 42.9 per cent. to the closing middle market price of 7.88 pence per Existing Ordinary Share on 25 April 2017 (being the last practicable date before announcement of the Transaction).

The purpose of the Circular is to explain the background to and reasons for the Transaction, the use of proceeds, and the details of the Transaction. The Circular also explains why the Board considers the Transaction to be in the best interest of the Company and its Shareholders, and why the Directors recommend that you vote in favour of the Resolutions to be proposed at the General Meeting.

2.             BACKGROUND TO THE TRANSACTION

Roger Bullen became Chief Executive in June 2016 and since that time the Board's strategic focus has been on developing a multi-purpose dynamic data architecture and building a scalable technology platform.  The Board believes that the Company's platform is now technologically advanced with deep functionality such that it is scalable for a variety of modules and capabilities. 

Whilst Rosslyn has attracted a number of important partnerships and is being increasingly recognised as a key player in the data analytics space this has not been matched by sales traction.  A limited sales resource, long sales cycles and unpredictable partner revenues have all, the Board believes, been contributing factors to the Company's revenue performance over the last three years.  This has led to an extended period of negative cash flow within the Group which, in turn, has put pressure on the Company's balance sheet.

In light of these challenges and the resources the Directors believe that additional data streams and applications are needed to bring the Group to critical mass, the Board's strategy is to accelerate the development of the Group both organically and inorganically. In addition, the Directors believe that a significant consolidation opportunity exists for Rosslyn to acquire companies that are heavily geared towards sale and delivery and that could leverage the Rosslyn platform. The Directors believe that the Proposed Acquisition represents the first step towards building a dynamic data analytics group. Rosslyn's principal expertise is in the extraction, transformation, integration, cleansing, enrichment and visualization of structured data sources, primarily from complex financial and enterprise resource planning systems.

Integritie is a UK based, on premise, data mining company which principally uses third party platforms, including but not limited to IBM Filenet, to capture and interrogate large customer data sets.  It specializes in unstructured and semi-structured data processing and has a blue chip customer base which the Directors believe is highly complementary to Rosslyn's. Integritie has its own proprietary analysis tools for extracting data from unstructured sources.

2.1          Reasons for the Proposed Acquisition

Rosslyn's strategy is to complement organic growth with the acquisition of suitable companies to enhance its product and customer base. The Directors believe that there is a strong opportunity to become a leading consolidator of data analytics companies and that the Proposed Acquisition will be a key step in this process and at the same time increase Rosslyn's critical mass and scale.  The Directors believe that the Proposed Acquisition is strategically compelling for the following reasons:

·      Integritie's customer base is complementary to that of Rosslyn. The Directors therefore believe that the Proposed Acquisition will add scale to Rosslyn and will allow the cross sale of unstructured/structured data services to an enlarged customer base.

·      The Directors believe that the Proposed Acquisition will generate a substantial increase in Rosslyn's recurring revenues, thereby enhancing the Group's quality of earnings and reducing overall risk from the reliance on the sale of cumbersome revenue items, the timing of which is always difficult to predict. The Directors believe that an enlarged recurring revenue base will be more closely aligned to the Group's cost base.

·      The Directors have identified cost savings/synergies of approximately £0.8 million that they expect Rosslyn to be able to make within a year from completion of the Proposed Acquisition. In due course the Directors expect that there will be further synergies in respect of platform and development costs.

·      The Directors believe that the Proposed Acquisition will enable the enlarged group to offer unstructured and structured data mining on Rosslyn's platform in the cloud and will allow Rosslyn to position itself as one of the foremost providers of technologies that enable enterprises to harness their structured and unstructured data simultaneously in one place. In addition to the separate companies' inherent growth prospects on a standalone basis, the addition of Integritie to the Group would offer a strong opportunity to cross-sell and leverage Rosslyn's platform

·      The Directors believe that the combination of the Integritie and Rosslyn sales teams will enable the enlarged Group to sell both RDT's existing products and Integritie's current offering as part of a complete and comprehensive suite. The Directors also believe that the increase in scale that Integritie would bring to the Group would drive cost savings and synergies in administration, development, data and project management.

2.2          Information on Integritie

Integritie is an information capture and management company based in Portsmouth.  It principally uses on-premises (non-cloud) IBM solutions to handle unstructured and semi structured data and deal with many varied sources and document types. 

Integritie is a private limited company incorporated in England and Wales (with registration number 03842863). Integritie was founded by Michael Veenswyk in 2000 and has developed a suite of image, social media and email capture automation solutions. Integritie has a broad range of content management solutions and  has delivered capture and content solutions in a number of jurisdictions. 

2.3          Financial information on Integritie

The trading record of Integritie for the three years ended 31 December 2015, as extracted from Integritie's consolidated financial statements is summarized below:

	Year ended 31 December 2013 £ millions (audited)	Year ended 31 December 2014 £ millions (audited)	Year ended 31 December 2015 £ millions (unaudited)
Revenues	5.9	5.4	3.0
Operating Profit/(Loss)	0.6	1.0	(2.0)
Profit/(Loss) before tax	0.6	0.9	(2.4)
Net assets	1.4	2.3	0.7

 

2.4          Terms of the Proposed Acquisition

Under the terms of the Acquisition Agreement Rosslyn has conditionally agreed to acquire the entire issued share capital of Integritie from its shareholders, Electronic Archive Solutions Holdings Limited, Peter James Lewis and Bernard Paul Quinn.  Electronic Archive Solutions Holdings Limited is owned by a family trust, one of the beneficiaries of which is Michael Veenswyk. 

The initial consideration for the Proposed Acquisition is £55,000, together with the assumption and repayment of debt of £2.533 million, making a total of £2.588 million.  In addition, there is an earn-out element to the consideration, based on the achievement of recognised revenue between £5 million and £7 million during the earn-out period (of 12 calendar months), which might become payable.  If any earn-out is payable, the maximum amount that Rosslyn would have to pay is £750,000, payable in Ordinary Shares (at a price per Ordinary Share ranging from 7.9 pence to a maximum of 26 pence). Therefore, the total payable for the Proposed Acquisition could be £3.339 million.

It is anticipated that the initial £2.588 million payable for the Proposed Acquisition on completion thereof will  be allocated  as follows:

·      approximately £1.267 million to repay certain outstanding debt and loan notes of Integritie;

·      the assumption (by way of retention by Rosslyn) of approximately £1.266 million of loans on Integritie's balance sheet ("Retained Integritie Debt"); and

·      the allotment and issue of the Consideration Shares at the Placing Price.

There may also be an adjustment to the consideration (upwards or downwards) if, and to the extent to which, the net working capital (which includes, as a current liability, a line item for deferred income equal to approximately £1.287 million) and/or the debt of Integritie is different from the agreed target figures in the Acquisition Agreement.  Any potential upwards adjustment to the consideration as described above shall be capped at £1,000,000.

Approximately £628,000 of the Retained Integritie Debt shall be amended such that, to the extent it remains outstanding on the second anniversary of completion of the Proposed Acquisition, it shall, along with any interest accrued but unpaid, be capable of being converted into new Ordinary Shares in the Company on the basis of one new Ordinary Share for every 25 pence owed to a creditor.

It is expected that post completion of the Proposed Acquisition, Michael Veenswyk, the founder of Integritie, will be appointed to the board of Rosslyn as an executive director (a sales director). Mr Veenswyk will have an employment contract with Rosslyn (the "Contract"). This Contract includes a fee of £120,000 per annum and is for an initial term of 12 months. The Company is entitled to terminate the Contract on 60 days' notice.  A further announcement with regard to his appointment will be made when he is appointed to the board of Rosslyn.

2.5          Lock-Ins and Orderly Market Agreements

Electronic Archive Solutions Holdings Limited, one of the Sellers, has undertaken to the Company and Cenkos that, without the prior written consent of the Company or Cenkos and subject to certain limited exceptions:

(a)           it shall not sell, transfer or otherwise dispose of, or grant any, interest in or engage in any hedging transaction with respect to its Consideration Shares (each a "Transfer" and collectively "Transfers") at any time during the twelve (12) month period commencing on the date on which Consideration Shares are issued and allotted to it ("First Lock-up Period");

(b)           during the period commencing after the First Lock-up Period and ending on the second anniversary of the date on which Consideration Shares are issued and allotted to it (the "Second Lock-up Period"), it may Transfer up to one-third of the Consideration Shares issued and allotted to it pursuant to the Proposed Acquisition;

(c)           during the period commencing after the Second Lock-up Period and ending on the third anniversary of the date on which Consideration Shares are issued and allotted to it (the "Third Lock-up Period" and together with the First Lock-up Period and the Second Lock-up Period, the "Lock-up Periods"), it may Transfer up to two-thirds of the Consideration Shares issued and allotted to it pursuant to the Proposed Acquisition; and.

(d)           after the Third Lock-up Period, it may freely Transfer any Consideration Shares issued and allotted to it pursuant to the Proposed Acquisition.

3.             CURRENT TRADING AND OUTLOOK OF THE COMPANY

On 26 January 2017 Rosslyn announced its unaudited interim results for the six months to 31 October 2016, an extraction of which is included in the table below:

	6 months ended 31 October 2016 £ millions (unaudited)	6 months ended 31 October 2015 £ millions (unaudited)	Year ended 30 30 April 2016 £ millions (audited)
Revenues	1.67	1.82	3.87
Operating Loss	1.10	1.32	2.39
Loss before tax	1.08	1.32	2.37
Net assets	1.63	3.19	2.44

On 1 March 2017 the Company announced a Pilot Project with a leading UK Financial Services Firm which marked an important milestone for the Group being RDT's first inroad into the financial services market and, the Board believes, validates the versatility and applicability of the Rosslyn platform across different verticals outside of the spend analytics arena.

The Company's sales pipeline remains healthy and the Directors were pleased that the Group's US subsidiary recently won a contract from a US Global Industrials Metals Company.  The contract is phased with a $100,000, three month proof of value, followed, if successful, with a further $200,000 implementation and annual subscription fee, giving a first year value of approximately $300,000. 

As reported in the Company's interim results, the Group remains in contract negotiations with a number of large enterprises. The Board continues to expect opportunities to be converted into contract wins during the current financial year and, in some cases, work has already commenced in relation to these projects. The Company takes a prudent approach and does not recognise any revenue until the contracts have been signed. Management continue to work hard to ensure that three contracts, which together are worth more than £1 million, are signed by the end of April. Should none of these contracts be signed in time to be recognised in the 2016/17 financial year, it would have a consequential effect on Group revenues for 2016/17, which would then be at or around the same level as the previous year. The Company will update Shareholders should any of the contacts be signed before the end of the financial year. The Directors remain confident in the long term growth prospects of the Company and believe that the Proposed Acquisition would provide additional and diversified routes to growth and reduce the Group's exposure to large contract wins.

4.             THE VCT/EIS PLACING, FIRM PLACING AND OPEN OFFER

The Board believes that raising the majority of the equity finance using the flexibility provided by a non-pre-emptive placing is the most appropriate and optimal structure for the Company at this time.  This combined with the Open Offer (which is on a pre-emptive basis) allows both existing Shareholders and new institutional and other investors the opportunity to participate in the equity financing. The maximum amount to be raised by the Open Offer is below the threshold which would require a prospectus, which is a costly and time consuming process.

Subject to the satisfaction of the conditions referred to below, the Company will issue and allot the VCT/EIS Placing Shares first, then the Firm Placing Shares, the Offer Shares and, finally, the Consideration Shares. The use of proceeds raised from the VCT/EIS Placing and the Firm Placing are detailed below in paragraph 4.3.

The New Ordinary Shares when issued will rank pari passu with the Existing Ordinary Shares and will rank in full for any dividends and distributions paid or made in respect of the Ordinary Shares.

4.1          Details of the VCT/EIS Placing and the Firm Placing

The Company is proposing to raise approximately £4.5 million (before fees and expenses) by way of the VCT/EIS Placing and the Firm Placing at the Placing Price.  The Placing Price represents a discount of approximately 42.9 per cent. from the closing mid-market price of 7.88p on 25 April 2017, , being the latest practicable date prior to the announcement of the Transaction.

In order to broaden the Company's institutional shareholder base and to minimise the time and transaction costs of the VCT/EIS Placing and the Firm Placing, the VCT/EIS Placing Shares and the Firm Placing Shares are only being placed by Cenkos with a limited number of existing and new institutional shareholders.  The VCT/EIS Placing Shares and the Firm Placing Shares are not being made available to the public.

In accordance with the terms of the Placing Agreement, both the VCT/EIS Placing and the Firm Placing are conditional, inter alia, upon:

(a)           Shareholders approving the Resolutions at the General Meeting that will grant to the Directors the authority to allot the New Ordinary Shares and the Warrants and the power to disapply pre‑emption rights in respect of such securities;

(b)           the Placing Agreement becoming or being declared unconditional in all respects and not having been terminated in accordance with its terms prior to Admission; and

(c)           Admission becoming effective by no later than 8.00 a.m. on 15 May 2017, or such later time and/or date (being no later than 8.00 a.m. on 23 May 2017) as Cenkos and the Company may agree;

The VCT/EIS Placing Shares and the Firm Placing Shares will be issued credited as fully paid and will be identical to and rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all future distributions, declared, paid or made in respect of the Ordinary Shares following the date of Admission.

Application will be made to the London Stock Exchange for the VCT/EIS Placing Shares, the Firm Placing Shares, the Offer Shares, and the Consideration Shares to be admitted to trading on AIM.  Subject, inter alia, to the passing of the Resolutions at the General Meeting, it is expected that admission to AIM will become effective in respect of, and that dealings on AIM will commence in, the VCT/EIS Placing Shares and the Firm Placing Shares, on or around 15 May 2017, or such later time and/or date (being no later than 8.00 a.m. on 23 May 2017) as Cenkos Securities and the Company may agree.

It is expected that CREST accounts of the investors in the VCT/EIS Placing Shares and the Firm Placing Shares who hold their Ordinary Shares in CREST will be credited with their VCT/EIS Placing Shares and their Firm Placing Shares on 15 May 2017.  In the case of investors in the VCT/EIS Placing Shares and Firm Placing Shares holding their Ordinary Shares in certificated form, it is expected that, where applicable, certificates will be dispatched within 10 business days of Admission.  Pending dispatch of the share certificates or the crediting of CREST accounts, the Registrar will certify any instruments of transfer against the register.

4.2          Details of the Open Offer

The Company is proposing to raise up to approximately £0.5 million before expenses under the Open Offer. A total of 11,142,031 new Ordinary Shares are available to Qualifying Shareholders pursuant to the Open Offer at the Placing Price, payable in full on acceptance. Any Offer Shares not subscribed for by Qualifying Shareholders will be available to Qualifying Shareholders under the Excess Application Facility.

Qualifying Shareholders may apply for Offer Shares under the Open Offer at the Placing Price on the following basis:

5 Offer Shares for every 34 Existing Ordinary Shares

and so in proportion for any number of Existing Ordinary Shares held on the Record Date.

Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Offer Shares. Fractional entitlements which would otherwise arise will not be issued to the Qualifying Shareholders but will be aggregated and made available under the Excess Application Facility. The Excess Application Facility enables Qualifying Shareholders to apply for Excess Shares in excess of their Open Offer Entitlement. Not all Shareholders will be Qualifying Shareholders. Shareholders who are located in, or are citizens of, or have a registered office in certain overseas jurisdictions will not qualify to participate in the Open Offer.

Application has been made for the Open Offer Entitlements to be admitted to CREST. It is expected that such Open Offer Entitlements will be credited to CREST on 27 April 2017. The Open Offer Entitlements will be enabled for settlement in CREST until 11.00 a.m. on 11 May 2017. Applications through the CREST system may only be made by the Qualifying CREST Shareholder originally entitled or by a person entitled by virtue of bona fide market claims. The Offer Shares must be paid in full on application. The latest time and date for receipt of completed Application Forms or CREST applications and payment in respect of the Open Offer is 11.00 a.m. on 11 May 2017.

The Open Offer is conditional on the VCT/EIS Placing and the Firm Placing becoming or being declared unconditional in all respects and not being terminated before Admission (as the case may be).

Accordingly, if the conditions of the Placing Agreement are not satisfied or waived (where capable of waiver), the Open Offer will not proceed and the Offer Shares will not be issued and all monies received by Capita will be returned to the applicants (at the applicants' risk and without interest) as soon as possible, but within 14 days thereafter. Any Open Offer Entitlements admitted to CREST will thereafter be disabled.

Application will be made for the Offer Shares to be admitted to trading on AIM.  It is expected that dealings in the Offer Shares will commence on AIM on 15 May 2017.

Part 3 and Part 4 of the Circular contain further necessary information on the Open Offer.

4.3          Use of net proceeds

The net proceeds from the VCT/EIS Placing will be used to further develop the Company's platform and to grow the Company's sales and marketing capabilities both in the UK and USA.

The net proceeds of the Firm Placing and the Open Offer are expected to be approximately £4.47 million and it is proposed that such proceeds shall be used as follows:

(a)           £1.767 million partially to fund the Proposed Acquisition, of which £1.267 million is for the repayment of loans and £0.5 million is for immediate working capital requirements; and

(b)           £2.703 million for working capital and ongoing development of the Company's existing product set.

4.4          Placing Agreement and the Warrants

In connection with the VCT/EIS Placing and the Firm Placing, the Company has entered into the Placing Agreement pursuant to which Cenkos has conditionally agreed to act as placing agent to the Company and to use reasonable endeavours to procure placees to acquire the VCT/EIS Placing Shares and the Firm Placing Shares at the Placing Price. The VCT/EIS Placing and the Firm Placing have not been underwritten.

The Placing Agreement contains certain warranties from the Company in favour of Cenkos in relation to, inter alia, the accuracy of the information contained in this document and certain other matters relating to the Group and its business.  In addition, the Company has given certain undertakings to Cenkos and has agreed to indemnify Cenkos in relation to certain liabilities they may incur in respect of the VCT/EIS Placing and the Firm Placing. 

Cenkos has the right to terminate the Placing Agreement prior to Admission, in certain circumstances including, inter alia: (i) for certain force majeure events or other events involving certain material adverse changes or prospective material adverse changes relating to the Group; or (ii) in the event of a breach of the warranties or other obligations of the Company set out in the Placing Agreement.

The Warrants are exercisable at any time from the first anniversary of Admission up to the fifth anniversary of Admission, provided that the closing mid-market price for the Company's Ordinary Shares shall be at least 8 pence per Ordinary Share.

The terms of the Warrants are subject to adjustment in certain circumstances including a share capital reorganisation of the Company.

4.5          Directors' dealings

Certain of the Directors have indicated that they intend to subscribe for, in aggregate, up to 5,111,110 new Ordinary Shares under the Open Offer, if such amount is available.  A further announcement with regard to their participation in the Open Offer will be made in due course.

5.             GENERAL MEETING

A notice convening the General Meeting is set out at the end of the Circular.  A summary and explanation of the Resolutions to be proposed at the General Meeting is set out below.  Please note that the summary and explanation is not the full text of the Resolutions and Shareholders should review the full text of the Resolutions before deciding whether or not to approve them.

The first and second Resolutions propose to grant to the Directors a general authority pursuant to section 551 of the Act to allot shares in the Company or to grant rights to subscribe for or convert any security into shares in the Company.

The third Resolution proposes to confer upon the Directors a general power under section 570 of the Act to allot equity securities on a non pre-emptive basis pursuant to the authority granted to the Directors by the first and second Resolutions. The third Resolution is a special resolution.  Accordingly, for the third Resolution to be passed, not less than 75 per cent. of votes cast must be in favour.

If passed, the Resolutions will confer upon the Directors the authority to issue the New Ordinary Shares and the Warrants as well as certain additional shares as described therein.  The Transaction is conditional upon the passing of the Resolutions and, accordingly, if the Resolutions are not passed, the Transaction will not complete.  If the Resolutions are passed, the authority and power conferred will, to the extent not used, expire at the end of the next annual general meeting of the Company to be held in 2017.

The Directors do not, at present, intend to issue any share capital other than in connection with the Transaction and the Warrants.

6.             RECOMMENDATION AND IRREVOCABLE UNDERTAKINGS

The Directors recommend that you vote in favour of the Resolutions to be proposed at the General Meeting, as they intend to do in respect of their own beneficial holdings amounting collectively to approximately 33,454,729 Ordinary Shares representing approximately 44 per cent. of the existing issued ordinary share capital of the Company.

 

Expected timetable of key events

 

Record Date for the Open Offer	close of business on 24 April 2017
Announcement of the Transaction, posting of the Circular, the Application form  and Form of Proxy	26 April 2017
Ex-entitlement Date	26 April 2017
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts of Qualifying CREST Shareholders	27 April 2017
Recommended latest time and date for requesting withdrawal of Open Offer Entitlements and Excess CREST Open Offer Entitlements from CREST	4.30 p.m. on 8 May 2017
Latest time and date for depositing Open Offer Entitlements and Excess CREST Open Offer Entitlements in CREST	3.00 p.m. on 9 May 2017
Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 10 May 2017
Latest time and date for receipt of completed Forms of Proxy to be valid at the General Meeting	10:30 a.m. on 10 May 2017
Latest time and date for acceptance of the Open Offer and receipt of completed Application Forms and payment in full under the Open Offer or settlement of relevant CREST instructions (if appropriate)	11.00 a.m. on 11 May 2017
General Meeting	10.30 a.m. on 12 May 2017
Announcement of result of General Meeting and Open Offer	12 May 2017
Admission and commencement of dealings in the VCT/EIS Placing Shares, Firm Placing Shares, Offer Shares and Consideration Shares on AIM	8.00 a.m. on 15 May 2017
VCT/EIS Placing Shares, Firm Placing Shares and Offer Shares credited to CREST members' accounts	15 May 2017
Despatch of definitive share certificates for Offer Shares in certificated form	Within 10 business days of Admission

 

 

DEFINITIONS

The following definitions apply throughout this announcement, unless the context otherwise requires:

"Acquisition Agreement"	the acquisition agreement entered into on 26 April 2017 between Rosslyn (as buyer) and the Sellers for the acquisition of the entire issued share capital of Integritie;
"Act"	the Companies Act 2006;
"Admission"	admission of the VCT/EIS Placing Shares, Firm Placing Shares, Offer Shares and Consideration Shares to trading on AIM becoming effective in accordance with rule 6 of the AIM Rules;
"AIM"	the market of that name operated by London Stock Exchange;
"AIM Rules"	the rules published by London Stock Exchange entitled "AIM Rules for Companies";
"Application Form"	the application form which accompanies the Circular for Qualifying Non-CREST Shareholders for use in connection with the Open Offer;
"Board" or "Directors"	the directors of the Company;
"Capita Asset Services"	a trading name of Capita Registrars Limited;
"Cenkos" or "Cenkos Securities"	Cenkos Securities plc;
"Company", "RDT" or "Rosslyn"	Rosslyn Data Technologies plc;
"Consideration Shares"	means 1,222,222 new Ordinary Shares to be issued to the shareholders of Integritie as part of the Proposed Acquisition;
"CREST"	the relevant system (as defined in the CREST Regulations) in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in the CREST Regulations);
"CREST member"	a person who has been admitted by Euroclear UK & Ireland as a system-member (as defined in the CREST Regulations);
"CREST participant"	a person who is, in relation to CREST, a system participant (as defined in the CREST Regulations);
"CREST payment"	shall have the meaning given in the CREST Manual issued by Euroclear UK & Ireland;
"CREST Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755), as amended, and any applicable rules made under those regulations;
"CREST sponsor"	a CREST participant admitted to CREST as a CREST sponsor;
"CREST sponsored member"	a CREST member admitted to CREST as a sponsored member (which includes all CREST Personal Members);
"EBITDA"	earnings before interest, tax, depreciation and amortization;
"EIS"	the Enterprise Incentive Scheme under Part 5 of the Income Tax Act 2007;
"enabled for settlement"	in relation to Open Offer Entitlements or entitlements to Excess Shares, enabled for the limited purpose of settlement of claim transactions and unmatched stock event transactions (each as described in the CREST Manual issued by Euroclear UK & Ireland);
"Enlarged Share Capital"	the entire issued share capital of the Company following completion of the VCT/EIS Placing, Firm Placing, Open Offer and Admission, assuming the Open Offer is fully subscribed;
"Euroclear UK & Ireland" or "Euroclear"	Euroclear UK & Ireland Limited, the operator of CREST;
"Excess Application Facility"	the arrangement pursuant to which Qualifying Shareholders may apply for Offer Shares in excess of their Open Offer Entitlements;
"Excess CREST Open Offer Entitlement"	in respect of each Qualifying CREST Shareholder, the entitlement to apply for Offer Shares in addition to his Open Offer Entitlement credited to that Shareholder's stock account in CREST, pursuant to the Excess Application Facility, which is conditional on the Shareholder taking up their Open Offer Entitlement in full and which may be subject to scaling back in accordance with the provisions of the Circular;
"Excess Open Offer Entitlement"	an entitlement for each Qualifying Shareholder to apply to subscribe for Offer Shares in addition to his Open Offer Entitlement pursuant to the Excess Application Facility which is conditional on him taking up his Open Offer Entitlement in full and which may be subject to scaling back in accordance with the provisions of the Circular;
"Excess Shares"	Offer Shares in addition to the Open Offer Entitlement for which Qualifying Shareholders may apply under the Excess Application Facility;
"Ex-entitlement Date"	the date on which the Existing Ordinary Shares are marked "ex" for entitlement under the Open Offer, being 26 April 2017;
"Existing Ordinary Shares"	all issued Ordinary Shares as at the date of the Circular;
"FCA"	the UK Financial Conduct Authority;
"Firm Placing"	the placing by Cenkos, as agent for the Company, of the Firm Placing Shares at the Placing Price with certain institutional and other investors on the terms and subject to the conditions set out in the Placing Agreement;
"Firm Placing Shares"	50,955,000 new Ordinary Shares to be issued pursuant to the Firm Placing;
"FSMA"	the Financial Services and Markets Act 2000 (as amended);
"General Meeting"	the general meeting of the Company convened for 10.30 a.m. on 12 May 2017 to approve the Resolutions (or any adjournment thereof), notice of which is set out at the end of the Circular;
"Form of Proxy"	the form of proxy for use in connection with the General Meeting accompanying the Circular;
"Group"	the Company and its subsidiaries and subsidiary undertakings as defined in the Act;
"Integritie"	Integritie (UK) Limited;
"ISIN"	International Securities Identification Number;
"London Stock Exchange"	London Stock Exchange plc;
"Money Laundering Regulations"	the Money Laundering Regulations 2007 (as amended);
"New Ordinary Shares"	the VCT/EIS Placing Shares, the Firm Placing Shares, the Offer Shares and the Consideration Shares;
"Open Offer"	the conditional invitation made by the Company to Qualifying Shareholders to apply to subscribe for the Offer Shares at the Placing Price on the terms and subject to the conditions set out in Part 3 of the Circular and, where relevant, in the Application Form;
"Open Offer Entitlement"	the individual entitlements of Qualifying Shareholders to apply to subscribe for Offer Shares allocated to Qualifying Shareholders pursuant to the Open Offer;
"Offer Shares"	up to 11,142,031 new Ordinary Shares being made available to Qualifying Shareholders pursuant to the Open Offer;
"Ordinary Shares"	ordinary shares of £0.005 each in the capital of the Company;
"Overseas Shareholders"	Shareholders who are resident in, or who are citizens of, or who have registered addresses in, territories other than the United Kingdom;
"participant ID"	the identification code or membership number used in CREST to identify a particular CREST member or other CREST participant;
"Placees"	subscribers for new Ordinary Shares pursuant to the VCT/EIS Placing or Firm Placing as the case may be;
"Placing Agreement"	the placing agreement dated on or around the date of the Circular between the Company and Cenkos in connection with the VCT/EIS Placing and the Firm Placing;
"Placing Price"	4.5 pence per New Ordinary Share;
"Prospectus Rules"	the prospectus rules made by the FCA pursuant to section 73A of FSMA;
"Proposed Acquisition"	the proposed acquisition by the Company pursuant to the Acquisition Agreement;
"Qualifying CREST Shareholders"	Qualifying Shareholders holding Existing Ordinary Shares in a CREST account;
"Qualifying Non-CREST Shareholders"	Qualifying Shareholders holding Existing Ordinary Shares in certificated form;
"Qualifying Shareholders"	holders of Existing Ordinary Shares on the register of members of the Company at the Record Date (but excluding, subject to certain exceptions, any Overseas Shareholder who is located or resident or who has a registered address in, or who is a citizen of, the United States of America or any other Restricted Jurisdiction);
"Receiving Agent"	Capita Asset Services, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU;
"Record Date"	5.00 p.m. on 24 April 2017 in respect of the entitlements of Qualifying Shareholders under the Open Offer;
"Registrars"	Capita Asset Services, the Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU;
"Regulatory Information Service"	has the meaning given in the AIM Rules;
"Resolutions"	the resolutions to be proposed at the General Meeting;
"Restricted Jurisdiction"	the United States, Canada, Australia, New Zealand, the Republic of South Africa, Japan or the Republic of Ireland, and any of their territories or possessions;
"Securities Act"	the United States Securities Act of 1933, as amended;
"Sellers"	means Electronic Archive Solutions Holdings Limited, a company incorporated in the British Virgin Islands (with registered number 403543), Peter James Lewis, a non-executive director of Integritie, and Bernard Paul Quinn, the chairman of Integritie;
"Shareholder"	a holder of Ordinary Shares;
"Transaction"	the VCT/EIS Placing, Firm Placing, Open Offer, and the Proposed Acquisition;
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland;
"United States" or "US"	the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia;
"VCT"	a Venture Capital Trust under Part 6 of the Income Tax Act 2007;
"VCT/EIS Placing"	the placing by Cenkos, as agent for the Company, of the VCT/EIS Placing Shares at the Placing Price with certain institutional and other investors on the terms and subject to the conditions set out in the Placing Agreement;
"VCT/EIS Placing Shares"	up to 49,045,000 new Ordinary Shares to be issued pursuant to the VCT/EIS Placing;
"Warrants"	the warrants to be issued by the Company to Cenkos to subscribe for up to such number of Ordinary Shares as amounts to 6 per cent of the aggregate nominal value of the ordinary share capital of the Company in issue on Admission at the Placing Price and exercisable at any time from the first anniversary of Admission up to the fifth anniversary of Admission provided that the closing mid market price for the Company's Ordinary Shares shall be at least 8 pence per Ordinary Share;
"£", "pence", "p" or "sterling"	the lawful currency of the United Kingdom; and
"$", "US$" or "dollar"	the lawful currency of the United States.