Acquisition and Placing to raise up to £21.2m

THIS ANNOUNCEMENT IS RESTRICTED AND IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OR ANY OF ITS TERRITORIES, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR AUSTRALIA OR ANY OTHER STATE OR JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF REGULATION (EU) 596/2014. ON PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

13 November 2017

 

Warpaint London PLC

("Warpaint", the "Company" or the "Group")

 

 

Acquisition of Retra Holdings Limited

 

And

 

Placing of up to 11,157,894 new ordinary shares by way of an accelerated bookbuild to raise up to £21.2 million

 

Warpaint London PLC (AIM: W7L), the specialist supplier of colour cosmetics and owner of the W7 brand, is pleased to announce the proposed acquisition of Retra Holdings Limited ("Retra") and a placing ("Placing") of up to 11,157,894 new ordinary shares at a price of 190p per ordinary share of 25p each ("Ordinary Share") by way of an accelerated bookbuild to raise up to £21.2 million.

 

 

Highlights

 

·    Agreement for the acquisition of Retra (the "Acquisition") for a maximum consideration of £18.2 million to be satisfied from the proceeds of the Placing and the issue of 1,052,631 Consideration Shares to certain of the Vendors of Retra

 

·     Retra is a UK colour cosmetics business with a significant focus on the gifting market (51% of sales in 2016) principally for high street retailers and supermarkets including Boots, Superdrug and Asda

 

·     Retra owns three major brands: Technic, Body Collection and Man's Stuff, in addition to white label cosmetics produced for several major high street retailers including Asda and Matalan

 

·     Retra recorded profit before tax of £2.3 million on sales of £17.5 million in the year to 31 December 2016

 

·     The Acquisition is expected to be immediately earnings enhancing before anticipated (but not quantified) synergies

 

·     Placing of up to 11,157,894 new Ordinary Shares at 190p per Ordinary Share to be implemented by an accelerated bookbuild by Stockdale acting as bookrunner to raise up to £21.2 million

 

·     The Placing and the Acquisition are subject to the passing of resolutions at a general meeting of the Company to authorise the Directors to allot and issue the Placing Shares and the Consideration Shares on a non-pre-emptive basis

 

·     The Directors of Warpaint have indicated that they intend to participate in the Placing for a total of up to £670,000

 

·     Early indications of interest from institutional investors have shown strong support for the Placing

 

·     Over 94% of the Consideration Shares to be locked-in for 12 months

 

 

Commenting, Sam Bazini and Eoin Macleod, Joint Chief Executives of Warpaint, said: "We are very pleased to announce the proposed acquisition of Retra.  This acquisition will provide Warpaint with access to new customers and suppliers, increased numbers of product development personnel and additional exposure to the gifting market, an area of increasing focus for Warpaint.

 

"The Acquisition will help to accelerate Warpaint's growth both domestically and internationally.  We look forward to welcoming the Retra team into Warpaint and combining the businesses to derive new opportunities and synergies.

 

"Warpaint remains on track to meet management expectations this year and we look forward to the future with confidence."

 

Enquiries:

 

Warpaint London PLC     Sam Bazini - Joint Chief Executive Officer Eoin Macleod - Joint Chief Executive Officer Neil Rodol - Chief Financial Officer	020 3053 8671
Stockdale Securities Limited (Nominated Adviser and Broker) Andy Crossley, Antonio Bossi, Ed Thomas - Corporate Finance Fiona Conroy - Corporate Broking	020 7601 6100
IFC Advisory Limited (Financial PR & IR) Tim Metcalfe Graham Herring Heather Armstrong Miles Nolan	020 3053 8671

 

 

About Warpaint London PLC

 

Warpaint London is a colour cosmetics business, based in Iver, Buckinghamshire. It is made up of two divisions: close-out and own-brand. The second and larger own-brand division consists primarily of the Group's flagship brand, W7 - an extremely creative, design-focused cosmetic brand proposition with a focus on the 16-30 age range, delivering high-quality cosmetics at affordable prices. The W7 brand has grown organically since its inception in 2002 and now contains over 500 items which are sold into high street retailers and independent beauty shops across the UK, Europe, Australia and the US. In 2016, W7 was supplied to over 250 customers in more than 50 countries.

 

 

 

 

Acquisition of Retra Holdings Limited ("Retra")

 

And

 

Placing of up to 11,157,894 new ordinary shares by way of an accelerated bookbuild to raise up to £21.2 million

 

 

1.         Introduction

 

The Company announces that it has agreed terms for the acquisition of Retra, a UK colour cosmetics company based in Yorkshire, for a maximum consideration of £18.2 million.

 

Warpaint also announces the Placing of up to 11,157,894 new Ordinary Shares to raise up to £21.2 million at a price of 190p per Ordinary Share. The Placing will be implemented via an accelerated bookbuild process (the "ABB") which will be carried out by Stockdale acting as bookrunner. The ABB will open immediately and Appendix I to this Announcement contains the terms and conditions of the Placing. Members of the public are not eligible to take part in the Placing.

 

The Placing will be subject to approval of the Resolutions to grant the Directors authorities to allot and issue the Placing Shares and the Consideration Shares at the General Meeting of Shareholders which is being convened for 29 November 2017.

 

Completion of the Acquisition and settlement and Admission to trading on AIM of the Placing Shares and the Consideration Shares are expected to occur on 30 November 2017.

 

Retra is a colour cosmetics business focusing on the gifting market (51% of sales in 2016) principally for high street retailers and supermarkets including Boots, Superdrug and Argos. Retra owns three major brands: Technic, Body Collection and Man's Stuff. It also produces white label cosmetics for several major high street retailers including Asda and Matalan.

 

Retra recorded profit before tax of £2.3 million on sales of £17.5 million in the year to 31 December 2016.

 

The consideration payable to the Vendors for the entire issued and to be issued share capital of Retra will be a maximum of £18.2 million. This is comprised of a maximum of £16.2 million payable in cash on Completion from the proceeds of the Placing and £2.0 million to be satisfied by the issue of 1,052,631 new Ordinary Shares.

 

Subject to the Resolutions being passed at the General Meeting, Completion of the Acquisition, Admission and the commencement of dealings in the Placing Shares and the Consideration Shares on AIM are expected to occur at 8.00 a.m. on 30 November 2017.

 

2.         Background to and reasons for the Acquisition and Placing

 

The Directors believe that the Acquisition presents an opportunity to accelerate the growth of Warpaint through the acquisition of an established UK business which will be highly complementary in terms of products, customer relationships and geographic spread and will provide both Warpaint's and Retra's businesses with access to new distribution channels. It will also expand the range of products and customer segments targeted, including men and older consumers.

 

Retra will provide Warpaint with a significantly increased customer base, with limited overlap between Retra's and Warpaint's existing customer bases. In particular, Retra distributes through UK supermarkets, grocery stores and high street health and beauty shops including Boots, Superdrug and Asda which are currently unserved by Warpaint.

 

Retra has a strong sales and new product development team which will support the growth of the Enlarged Group.

 

The Acquisition is expected to be immediately earnings enhancing, before any benefits of anticipated, but not quantified, synergies are considered.

 

The net proceeds of the Placing will, in addition to satisfying the cash consideration payable for the Acquisition, be used in part to reduce Retra's reliance on its current funding arrangements and the Enlarged Group is as a result expected to remain net debt free.

 

3.         Information on Retra

 

Retra, which is based in Silsden, West Yorkshire, was acquired by its current owners in 2006 and has grown from sales of c.£5 million in 2007 to c.£17.5 million in the year to 31 December 2016.

 

It has 56 employees including around 10 overseas staff based at its offices in Germany, Hong Kong and China. Whilst Retra trades principally in colour cosmetics including gift sets which represented 51% of sales in 2016, it has recently diversified into bath, tanning and men's grooming products and accessories.

 

Gift sets comprise packaged cosmetic and bath & body collections, with significant focus on the Christmas market; this segment has recently been a strong growth area for Warpaint. Orders for Christmas gift sets are typically placed in Q1 and Q2 each year providing visibility over H2 trading.

 

Exports represented 42% of Retra's sales in 2016 and were mainly to Europe (37%). Retra has no current presence in Australia (Warpaint's largest export market) and its US business is relatively undeveloped.

 

Retra owns three major brands, which make up most of its core branded product offering and are sold as "singles" and through gift sets:

 

-      Technic - flagship colour cosmetics and makeup accessories brand, with over 300 products in its range

-      Body Collection - more traditional cosmetics and body range

-      Man's Stuff - new male grooming range covering products from shower gels and shampoo to beard oils and shaving gels.

 

White label cosmetic and toiletry ranges, which represented 10% of Retra's sales in 2016, are supplied to several major high street retailers, including Asda and Matalan.

 

Financial information

 

The trading record of Retra for the two years ended 31 December 2015 and 31 December 2016 as extracted from Retra's financial statements is summarised below:

 

	Retra Holdings Ltd
	Year ended 31 Dec 2016	Year ended 31 Dec 2015	Growth %
Revenue	£17.5m	£12.4m	41.2%
Gross Profit Margin	33.0%	30.0%
Operating Profit	£2.7m	£0.9m	203.8%
Operating Margin	15.6%	7.2%
Profit before tax	£2.3m	£0.3m	705.2%
Net cash / (debt)	£(5.4)m	£(5.2)m

 

 

4.         Terms of the Acquisition

 

The Acquisition will be made pursuant to the Sale and Purchase Agreements. Under these, the Company has agreed to acquire the entire issued and to be issued share capital of Retra for a total consideration comprising £16.2 million in cash and the issue of the Consideration Shares (except that, if EBITDA 2017 is less than £2.85 million, the Vendors must pay to Warpaint six times the amount by which EBITDA 2017 is less than £3 million, thereby reducing the cash element of the total consideration). Under the Share Purchase Agreements, the Acquisition is conditional, inter alia, on the Placing being successfully completed, the Resolutions being passed at the General Meeting and Admission. The Share Purchase Agreements contain usual warranties in relation to Retra in favour of Warpaint and certain restrictive covenants on the part of some of the Vendors.

 

Kai Arter and Linda Arter (who are receiving over 94% of the Consideration Shares) have each agreed to enter into a lock-in agreement pursuant to which they have undertaken to the Company and Stockdale that, subject to certain limited exceptions, they will not sell or otherwise dispose of, or agree to sell or dispose of, any of their respective interests in the Ordinary Shares held by them and their connected persons at any time during the period of 12 months following Admission. In addition, certain orderly market provisions will apply for a further period of 12 months after expiry of the 12 month lock-in period.

 

 

5.         Details of the Placing

 

The Company is proposing to raise up to £21.2 million (before expenses) through the issue of the Placing Shares at the Placing Price in order to fund the cash portion of the consideration, being a maximum of £16.2 million, the transaction expenses and in order to reduce Retra's reliance on its current funding arrangements. The Placing Price represents a discount of approximately 8 per cent. to the closing mid-market price of 206.5p per Ordinary Share on 10 November 2017, being the Last Practicable Day prior to the publication of this announcement. The Placing Shares will represent approximately 15 per cent. of the Enlarged Share Capital.

 

Stockdale has entered into the Placing Agreement with the Company whereby Stockdale has agreed, as agent for and on behalf of the Company, to use its reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price conditionally upon, inter alia:

 

a.    the Placing Agreement becoming unconditional and not being terminated by Stockdale in accordance with its terms; and

 

b.    Admission of the Placing Shares and the Consideration Shares becoming effective by not later than 8.00 a.m. on 30 November 2017 (or such later time and/or date as Stockdale and the Company may agree, but not later than 8.00 a.m. on 22 December 2017).

 

Stockdale may in its absolute discretion waive the conditions referred to above, other than that relating to Admission.

 

Under the Placing Agreement, certain warranties have been given by the Company to Stockdale concerning, inter alia, the accuracy of this Announcement, the Circular and the presentation to potential investors (together, the "Placing Documents"), the affairs of the Company and certain taxation and other matters, and certain indemnities have been given by the Company in relation to Stockdale's involvement in the Placing and Admission.

 

The Placing Agreement will be capable of being terminated by Stockdale at its absolute discretion at any time before Admission if, inter alia, (i) any statement in the Placing Documents has become untrue, inaccurate or misleading or matters have arisen which would, if the Placing Documents were issued at that time, constitute an omission from them; or (ii) there has been a breach of any of the warranties in the Placing Agreement; or (iii) there have occurred certain events, as specified in the Placing Agreement, which would render any of the warranties materially untrue or incorrect, and certain other force majeure events which in the reasonable opinion of Stockdale has or will or is likely to have an adverse effect on the financial or trading position or the business or prospects of the Company and its subsidiaries which is material in the context of the Group as a whole or which renders the Placing impracticable or inadvisable.

 

The terms and conditions of the Placing, upon which Stockdale will use its reasonable endeavours to procure subscribers for Placing Shares, are set out in Appendix 1 to this Announcement.

 

For the avoidance of doubt, Stockdale is not underwriting the Placing.

 

6.         Warpaint's current trading

 

Warpaint is currently trading in line with management's expectations.

 

 

7.         Forward-looking statements

 

This announcement may contain forward-looking statements relating to the Company's expected operations that are based on management's current expectations, estimates and projections. Words such as "expects", "intends", "plans", "projects", "believes", "estimates" and similar expressions are used to identify such forward-looking statements. These statements are not warranties or guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. By their nature forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may occur in the future. Although the Company believes the expectations reflected in such statements are reasonable, no assurance can be given that such expectations will prove to be correct. There are a number of factors, many of which are beyond the control of the Company, which could cause actual results and developments to differ materially from those expressed or implied by forward-looking statements.

 

 

 

 

 

 

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

 

	2017
Announcement of the Placing	13 November
Despatch of the Circular and the Form of Proxy	13 November
Latest time and date for receipt of Forms of Proxy for the General Meeting	9:30 a.m. on 27 November
General Meeting	9:30 a.m. on 29 November
Admission of Placing Shares and Consideration Shares to trading on AIM1	8:00 a.m. on 30 November
New Ordinary Shares in uncertificated form expected to be credited to accounts in CREST (uncertificated holders only)	30 November
Expected despatch of definitive share certificates for the New Ordinary Shares (certificated holders only)	By 15 December

 

Notes:

 

Each of the times and dates set out in the above timetable and mentioned in this announcement is subject to change by the Company (with the agreement of Stockdale), in which event details of the new times and dates will be notified to the London Stock Exchange and the Company will make an appropriate announcement to a Regulatory Information Service.

 

             References to times in this announcement are to London times unless otherwise stated.

 

(1)        Assumes the passing of the Resolutions at the Company's General Meeting to be convened for 29 November 2017.

 

 

 

APPENDIX I

 

Terms and Conditions of the Placing ("Terms and Conditions")

 

 

WARPAINT LONDON PLC 

 

Conditional placing by Stockdale of up to 11,157,894 million new Ordinary Shares at a price of 190p per share to raise up to £21.2 million before expenses for the Company.

 

Ordinary Shares ISIN: GB00BYMF3676     Ticker: W7L                        

 

IMPORTANT INFORMATION REGARDING THE PLACING FOR PLACEES ONLY

 

The distribution of the Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted or prohibited by law or regulation. Persons distributing the Announcement must satisfy themselves that it is lawful to do so.  No action has been taken by the Company or Stockdale that would permit an offering of such shares or possession or distribution of the Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession the Announcement comes are required by the Company and Stockdale to inform themselves about, and to observe, such restrictions.

 

No statement in the Announcement is intended to be a profit forecast or estimate, and no statement in the Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

 

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the AIM market operated by the London Stock Exchange.

 

Each Placee should consult with its own advisers as to legal, tax, business and related aspects of an investment in Placing Shares.

 

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, the Announcement.

 

Eligible participants

 

The Announcement and the information contained herein is restricted and is not for release, publication or distribution, in whole or in part, directly or indirectly, in, into or from the United States or any of its territories, Australia, Canada, Japan, the Republic of South Africa or any other jurisdiction in which such release, publication or distribution would be unlawful.

 

Members of the public are not eligible to take part in the Placing. This Appendix and the terms and conditions set out herein are for information purposes only and are directed only at:

 

 a)  persons in member states of the European Economic Area who are 'qualified investors' as defined in section 86(7) of the Financial Services and Markets Act 2000, as amended, ("qualified investors") being persons falling within the meaning of article 2(1)(e) of the EU Prospectus Directive (which means directive 2003/71/EC, as amended from time to time, and includes any relevant implementing directive measure in any member state) (the "Prospectus Directive"); and

 

 b)  in the United Kingdom, qualified investors who are persons who (i) have professional experience in matters relating to investments falling within article 19(1) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"); (ii) are persons falling within article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc) of the Order; or (iii) are persons to whom it may otherwise be lawfully communicated, (all such persons in (a) and (b) together being referred to as "relevant persons").

 

This Appendix and these Terms and Conditions must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this Appendix and the terms and conditions set out herein relates is available only to relevant persons and will be engaged in only with relevant persons.

 

The Announcement (including this Appendix) is for information purposes only and does not itself constitute an offer for sale or subscription of any securities in the Company.

 

Bookbuild

 

Stockdale will immediately following the Announcement commence a bookbuild process to determine demand for participation in the Placing by Placees. This Appendix gives details of the terms and conditions of, and the mechanics of participation in the prospective Placing. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

 

Stockdale and Warpaint shall be entitled to effect the Placing by such alternative method to the Bookbuild as it may, in its sole discretion, determine.

 

Participation in, and principal terms of, the Placing

 

1.    Stockdale is acting as bookrunner for and agent of Warpaint.

 

2.    Participation in the Placing will only be available to persons who may lawfully be, and are, invited to participate by Stockdale. Stockdale is itself entitled to enter bids in the Bookbuild as principal.

 

3.    The Bookbuild will establish the number of Placing Shares to be issued and the allocation of Placing Shares will be agreed between Stockdale and Warpaint following completion of the Bookbuild. The Placing Price is 190p per Placing Share. The number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Bookbuild.

 

4.    To bid in the Bookbuild, Placees should communicate their bid by telephone to their usual sales contact at Stockdale. Each bid should state the number of Placing Shares which the prospective Placee wishes to subscribe for at the Placing Price. Bids may be scaled down by Stockdale on the basis referred to in paragraph 9 below.

 

5.    The Bookbuild is expected to close no later than 12.30 p.m. (London time) on 13 November 2017 but may be closed earlier or later at the discretion of Stockdale. Stockdale may, in agreement with Warpaint, accept bids that are received after the Bookbuild has closed. Warpaint reserves the right (upon the agreement of Stockdale) to reduce or seek to increase the amount to be raised pursuant to the Placing, in its absolute discretion.

 

6.    Each prospective Placee's allocation will be confirmed orally by Stockdale as agent of Warpaint following the close of the Bookbuild. That oral confirmation will constitute an irrevocable legally binding commitment upon that person (who will at that point become a Placee) in favour of Stockdale and Warpaint to subscribe for the number of Placing Shares allocated to it at the Placing Price on the terms and conditions set out in this Appendix and in accordance with the Articles.

 

7.    Each prospective Placee's allocation and commitment will be evidenced by a confirmation note issued to such Placee by Stockdale. The terms of this Appendix will be deemed to be incorporated in that confirmation note.

 

8.    Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to Warpaint and Stockdale as agent of Warpaint, to pay to Stockdale (or as it may direct) in cleared funds, an amount equal to the product of the Placing Price and the number of Placing Shares allocated to such Placee as confirmed to it by Stockdale.

 

9.    Stockdale may choose to accept bids, either in whole or in part; and may scale down any bids on such basis as it may determine. Stockdale may also, notwithstanding paragraphs 4 and 5 above, (i) allocate Placing Shares after the time of any initial allocation to any person submitting a bid after that time and (ii) allocate Placing Shares after the Bookbuild has closed to any person submitting a bid after that time.

 

10.  A bid in the Bookbuild will be made on these Terms and Conditions and will be legally binding on the prospective Placee on behalf of whom it is made, and except: (i) as regards allocation (as referred to in paragraph 9 of these Terms and Conditions); and (ii) with the consent of Stockdale, when made, will not be capable of variation or revocation after the time at which it is submitted.  Each Placee will be deemed to have read and consented to the Terms and Conditions set out in this Appendix in their entirety.

 

11.  Irrespective of the time at which a Placee's allocation pursuant to the Placing is confirmed, settlement for all Placing Shares to be acquired pursuant to the Placing will be required to be made on the basis explained below under "CREST delivery-versus-payment". Stockdale reserves the right to require settlement for and/or delivery to any Placee of any Placing Shares by such other means as it may deem appropriate if delivery or settlement is not possible or practicable within the CREST system within the timetable set out in the Announcement.

 

12.  All obligations under the Bookbuild and Placing will be subject to fulfilment of the conditions referred to below under "Conditions of the Placing" and to the Placing not being terminated on the basis referred to below.

 

13.  By submitting a bid in the Bookbuild, each Placee agrees that its rights and obligations in respect of the Placing will terminate only in the circumstances described below and will not be capable of rescission or termination by the Placee.

 

14.  To the fullest extent permissible by law, Stockdale shall not have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise). In particular, Stockdale shall not have any liability (including, to the fullest extent permissible by law, any fiduciary duties) in respect of Stockdale's conduct of the Bookbuild or of such alternative method of effecting the Placing as Stockdale and Warpaint may agree.

 

15.  A Placee whose Placing Shares are to be delivered to a custodian or settlement agent should ensure that the written confirmation is copied and delivered promptly to the appropriate person within that organisation.

 

Conditions of the Placing

 

The obligations of Stockdale under the Placing Agreement are conditional on, amongst other things:

 

·           the passing of the Resolutions at the General Meeting of the Company to be convened for 29 November 2017;

 

·        Admission of the Placing Shares and the Consideration Shares taking place by 8.00 a.m. (London time) on 30 November 2017 (or such later time and/or date as Warpaint and Stockdale may otherwise agree, being no later than 22 December 2017); and

 

·           the Placing Agreement becoming unconditional in all other respects.

 

If any of the conditions contained in the Placing Agreement in relation to the Placing are not fulfilled, or waived by Stockdale, by the respective time or date where specified (or such later time and/or date as Warpaint and Stockdale may agree), the Placing will not proceed. The Placee's rights and obligations hereunder in relation to the Placing Shares shall cease and terminate at such time and each Placee agrees that no claim can be made by the Placee in respect thereof.

 

Stockdale may, at its discretion and upon such terms as it thinks fit, waive compliance by Warpaint with the whole or any part of any of Warpaint's obligations in relation to the conditions in the Placing Agreement, save that the conditions in the Placing Agreement relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in these Terms and Conditions.

 

None of Stockdale, Warpaint or any other person shall have any liability to any Placee (or to any other person whether acting on behalf of a Placee or otherwise) in respect of any decision they may make as to whether or not to waive or to extend the time and/or the date for the satisfaction of any condition to the Placing nor for any decision they may make as to the satisfaction of any condition or in respect of the Placing generally, and by participating in the Placing each Placee agrees that any such decision is within the absolute discretion of Stockdale.

 

The Placing Agreement may be terminated by Stockdale at any time prior to Admission in certain circumstances including, among other things, following a breach of the Placing Agreement by the Company or the occurrence of certain force majeure events.

 

Upon such termination, the parties to the Placing Agreement shall be released and discharged (except for any liability arising before or in relation to such termination) from their respective obligations under or pursuant to the Placing Agreement subject to certain exceptions.

 

By participating in the Placing, Placees agree that the exercise by Stockdale of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Stockdale and that they need not make any reference to Placees and that they shall have no liability to Placees whatsoever in connection with any such exercise or failure so to exercise.

 

Agreement to subscribe Placing Shares

 

Conditional on:

 

·     Admission taking place by 8.00 a.m. (London time) on 30 November 2017 (or such later time and/or date as Warpaint and Stockdale may otherwise agree, being no later than 22 December 2017);

 

·     the Placing Agreement becoming otherwise unconditional in all respects and not having been terminated on or before Admission (or such later time and/or date, not being later than 22 December 2017 as Stockdale and the Company may agree); and

 

·     Stockdale confirming to Placees their allocation of Placing Shares,

 

a Placee agrees to become a member of the Company and agrees to subscribe for those Placing Shares allocated to it by Stockdale at the Placing Price.

 

To the fullest extent permitted by law, each Placee acknowledges and agrees severally, and not jointly nor jointly and severally, that it will not be entitled to exercise any remedy of rescission at any time. This does not affect any other rights the Placee may have.

 

Contract

 

Following oral acceptance of a firm Placing participation, Placees will receive a confirmation note following closing of the Bookbuild and prior to Admission of the Placing Shares notifying them of the number of Placing Shares they will receive, together with a request for such Placee's CREST participant details and contact details. Dealings in the Placing Shares will not be permitted prior to Admission.

 

Oral acceptance of a Placing participation, on the terms and subject to the conditions of these Terms and Conditions and the Announcement (and subject to the Articles), will constitute a legally binding contract, inter alia, to subscribe for that Placing participation at the Placing Price.

 

 

 

Payment for Placing Shares

 

Each Placee must pay the Placing Price for the Placing Shares allocated to the Placee in the manner and by such time as directed by Stockdale. If any Placee fails to pay as so directed and/or by the time required by Stockdale, the relevant Placee's application for Placing Shares may, at the discretion of Stockdale, be rejected.

 

Background

 

Shareholder approval is required to give the Directors of the Company authority to allot and issue the Placing Shares and the Consideration Shares and the Company is today dispatching the Circular containing a notice of General Meeting at which the Resolutions will be put to the Shareholders.

 

It is expected that, subject to the passing of the Resolutions at the General Meeting and Completion of the Acquisition, Admission will become effective and that dealings in the Placing Shares and Consideration Shares on AIM will commence, at 8.00 a.m. on 30 November 2017.

 

Please note that all references to times and dates in these Terms and Conditions are references to UK time. Terms and expressions defined in the Announcement (unless expressly provided to the contrary) have the same meaning in these Terms and Conditions.

 

Placing Agreement

 

Stockdale as AIM nominated adviser and broker (as defined under the AIM Rules) to the Company, has entered into the Placing Agreement with the Company whereby Stockdale has agreed, as agent for and on behalf of the Company, to use its reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price conditionally upon, inter alia:

 

·     the Placing Agreement becoming unconditional and not being terminated by Stockdale in accordance with its terms;

 

·     Admission of the Placing Shares and the Consideration Shares becoming effective by not later than 8.00 a.m. on 30 November 2017 (or such later time and/or date as Stockdale and the Company may agree, but not later than 8.00 a.m. on 22 December 2017); and

 

·     Completion of the Acquisition.

 

Stockdale may in its absolute discretion waive the conditions referred to above, other than that relating to Admission.

 

Under the Placing Agreement, certain warranties have been given by the Company to Stockdale concerning, inter alia, the accuracy of the Announcement, the Circular and the presentation to potential investors, the affairs of the Company and certain taxation and other matters, and certain indemnities have been given by the Company in relation to Stockdale's involvement in the Placing and Admission.

 

The Placing Agreement will be capable of being terminated by Stockdale at its absolute discretion at any time before Admission if, inter alia, (i) any statement in the Placing Documents has become untrue, inaccurate or misleading or matters have arisen which would, if the Placing Documents were issued at that time, constitute an omission from them; or (ii) there has been a breach of any of the warranties in the Placing Agreement; or (iii) there have occurred certain events, as specified in the Placing Agreement which would render any of the warranties materially untrue or incorrect, and certain other force majeure events which in the reasonable opinion of Stockdale is or will or is likely to have an adverse effect on the financial or trading position or the business or prospects of the Company and its subsidiaries which is material in the context of the Group as a whole or which renders the Placing impracticable or inadvisable.

 

For the avoidance of doubt, Stockdale is not underwriting the Placing.

 

 

Placing participation

 

Each Placee which confirms its agreement to Stockdale (acting as agent on behalf of the Company) to purchase Placing Shares will be bound by these Terms and Conditions and will be deemed to have accepted them severally, and not jointly nor jointly and severally.

 

Placing Shares are subscribed subject to these Terms and Conditions and on the basis of the Announcement and the Articles. Placing Shares are subscribed at the Placing Price (free of commission) payable in cleared funds in full and in accordance with the settlement obligations set out below.

 

A Placee's participation in the Placing is conditional upon, inter alia, the Placing Agreement becoming unconditional in all respects and not being terminated by Stockdale in accordance with its terms. In the event that the Placing Agreement does not become unconditional in all respects or is terminated, the Placing will not proceed and all funds delivered by a Placee pursuant to these Terms and Conditions will be returned to the Placee at the Placee's risk, without interest.

 

No commissions are payable to Placees in respect of their participation in the Placing.

 

A Placee's Placing participation is expected to be free of stamp duty and stamp duty reserve tax in accordance with the paragraph entitled "Stamp Duty" below.

 

Dealings and Admission to trading on AIM

 

Application will be made to London Stock Exchange for all of the Placing Shares and the Consideration Shares to be admitted to trading on AIM. Subject to the fulfilment of the conditions of the Placing Agreement, it is expected that Admission of the Placing Shares and the Consideration Shares will become effective and that dealings in the Placing Shares and the Consideration Shares will commence at 8.00 a.m. on 30 November 2017 (or such later time and/or date as the Company and Stockdale may agree, not being later than 22 December 2017).

 

As applicable, it is expected that, in relation to a Placee's Placing participation, CREST accounts will be settled with Placing Shares on a delivery-versus-payment basis on 30 November 2017.

 

The Placing Shares will be issued fully paid and, when issued, will rank pari passu in all respects with the existing Ordinary Shares of the Company in issue immediately prior to Admission, and will rank in full for any dividends and other distributions declared, paid or made on the Enlarged Share Capital of the Company after Admission.

 

Conditions and Termination

 

These Terms and Conditions, which are legally binding, confirm the Placing Price and the terms and conditions on which each Placee confirms its agreement to Stockdale on behalf of the Company to participate in the Placing.

 

Stockdale will have the right to terminate the Placing Agreement, exercisable at any time prior to Admission, in certain circumstances, including if any warranties given by the Company in the Placing Agreement are untrue, inaccurate or misleading in any material respect.

 

A Placee's rights and obligations under the Placing are not conditional (except that the allotment and issue of the Placing Shares are subject to the passing of certain resolutions at the General Meeting) and will not be capable of termination or rescission by a Placee in any circumstances, save in respect of fraud.

 

Each Placee severally, and not jointly nor jointly and severally, irrevocably confirms its agreement with Stockdale and the Company on the terms and subject to the conditions set out herein and subject to the Announcement, the Placing Agreement and the Articles, to subscribe for those Placing Shares allocated to it by Stockdale at the Placing Price and to comply with these Terms and Conditions.

 

Each Placee's individual and separate agreement to subscribe for Placing Shares also constitutes an acknowledgment that its commitment has been made solely on the basis of the information contained in the Announcement and these Terms and Conditions and that accordingly none of the Company, its Directors, or any person acting on behalf of any of them shall have any liability to a Placee for any information or representation, other than as is contained in the Announcement and these Terms and Conditions.

 

Each Placee's participation in the Placing is conditional upon, inter alia, the Placing Agreement being executed and becoming or being declared unconditional in all respects and not being terminated by Stockdale in accordance with its terms.

 

If Placees do not provide any CREST details or if Placees provide insufficient CREST details for the delivery of Placing Shares to their CREST account, their Placing participation will be delivered in certificated form provided payment has been made in terms satisfactory to Stockdale and all other conditions in relation to the Placing have been satisfied or waived.

 

The right is reserved to issue Placing Shares in certificated form should Stockdale or the Company consider this to be necessary or desirable. This right is only likely to be exercised in normal circumstances in the event of any interruption, failure or breakdown of CREST or any part of CREST or on the part of the facilities and/or system operated by the Company's registrars in connection with CREST.

 

The person named for registration purposes (which term shall include the holder of the relevant CREST account) must be:

 

(a)          the person procured by the Placee to subscribe for or acquire the relevant Placing Shares; or

(b)          the Placee itself; or

(c)           a nominee of any such person, as the case may be.

 

 

Settlement - CREST delivery-versus-payment

 

Settlement will be effected on a matching delivery-versus-payment basis within CREST from Stockdale's settlement agent's CREST account (LAMAY).

 

Stamp Duty

 

Whilst Stockdale does not believe there to be any liability to stamp duty or stamp duty reserve tax in respect of the issue of Placing Shares, should any such stamp duty or stamp duty reserve tax be payable it will be entirely for the Placee's account and neither the Company nor Stockdale will have any liability in respect thereof.

 

Money Laundering

 

To ensure compliance with the Money Laundering Regulations 2007, the money laundering provisions of the Criminal Justice Act 1993, the Anti-Terrorism Crime and Security Act 2001 and the Proceeds of Crime Act 2002 (together with the provisions of the Money Laundering Sourcebook of the Financial Conduct Authority and the manual of guidance produced by the Joint Money Laundering Steering Group in relation to financial sector firms), all together "Relevant Anti-Money Laundering Procedures", Stockdale may, in its absolute discretion, require verification of a Placee's identity to the extent that the Placee has not already provided the same. Pending the provision to Stockdale of evidence of identity, Placing Shares may be retained and/or delivery may be delayed at Stockdale's absolute discretion. If within a reasonable time after a request for verification of identity Stockdale has not received evidence satisfactory to it, it may, at its absolute discretion, terminate a Placing participation in which event the monies payable on acceptance of the subscription will, if paid, be returned without interest to the account of the drawee bank from which they were originally debited.

 

Alternatively, if Placing Shares have already been allotted to a Placee, Stockdale may (at its discretion) sell them on the Placee's behalf and hold the proceeds of sale (net of expenses) or an amount equal to the original payment (whichever is the lower) on trust for the Placee. In these circumstances neither Stockdale nor the Company shall (save in the event of fraud or wilful default) be responsible for, or have any liability for, any loss or damage arising as a result.

 

Representations and Warranties

 

Stockdale is acting exclusively for the Company and no-one else in connection with the Placing and Admission and will not regard itself as owing duties under the rules and regulations of the Financial Conduct Authority to any other person or regard any other person as its client.

 

By agreeing to subscribe for Placing Shares, each Placee which enters into a contract with Stockdale to subscribe for Placing Shares will (for itself and any person(s) procured by it to subscribe for Placing Shares and any nominee(s) for any such person(s)) be deemed to represent and warrant severally, and not jointly nor jointly and severally, to Stockdale and the Company that:

 

•          it has read and understood the Announcement in its entirety and it agrees to and accepts all the Terms and Conditions set out in this Appendix;

 

•       its application for Placing Shares is irrevocable and its rights and obligations in respect of the Placing will terminate only in the circumstances referred to in this Appendix and will not be subject to rescission or termination by it in any circumstances;

 

•          it is not relying, or entitled to rely, on any information (including, without limitation, any information contained in any investor presentation given in relation to the Placing) other than that contained in the Announcement;

 

•          it may lawfully acquire Placing Shares;

 

•          it is not relying, or entitled to rely, on any information (including, without limitation, any information contained in any management presentation given in relation to the Placing) other than that contained in the Announcement (including the Terms and Conditions);

 

•          it has not received a prospectus or other offering document in connection with the Placing and acknowledges that no prospectus or other offering document is required under the Prospectus Directive or has been or will be prepared in connection with the Placing;

 

•          it is subscribing for the Placing Shares for its own account, it does not have any contract, understanding or arrangement with any person to sell, pledge, transfer, or grant a participation therein to such person or any third person with respect to any Placing Shares; save that if it is a private client stockbroker or fund manager it confirms that in acquiring the Placing Shares it is acting under the terms of one or more discretionary mandates granted to it by private clients and is not acting on an execution only basis or under specific instructions to acquire the Placing Shares for the account of any third party;

 

•          it is not a national, citizen or resident of the US, Canada, Australia, Republic of South Africa or Japan or any other jurisdiction in which this offer is or would be unlawful, and that it has not, and will not offer, sell, renounce or deliver as principal or agent, directly or indirectly, Placing Shares in, into or within the US, Canada, Australia, Republic of South Africa or Japan or any other jurisdiction in, into or within which such action is or would be unlawful, or to or for the benefit of any person who is a citizen of, or taxpayer to, or is resident in any of those territories or to any person purchasing such shares with a view to their re-offer, sale or transfer in or into any such territory;

 

•          it is: if in the UK (i) a person who having professional experience in matters relating to investments, is deemed sufficiently expert or sufficiently substantial to understand the risks involved and as such falls within the definition of investment professionals as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), (ii) a high net worth company, partnership or the trustees of high value trusts or unincorporated associations as defined in Article 49(2)(a) to (d) of that Order, or (iii) it is a person who may lawfully receive these Terms and Conditions and the Announcement (each a "Relevant Person"); or a person who is a "Qualified Investor" within the meaning of the Prospectus Directive (Directive 2003/71/EC and amendments thereto, including Directive 2010/73/EU, to the extent implemented in the relevant member state of the EEA) and any implementing measure in each relevant member state of the European Economic Area. Any investment or investment activity to which these Terms and Conditions relate is only available to and will only be engaged in with (i) in the UK, Relevant Persons; and (ii) in any other member state of the EEA, Qualified Investors. Each Placee severally, and not jointly nor jointly and severally, represents and warrants that it is either a Relevant Person or a Qualified Investor;

 

•          it is entitled to subscribe for the Placing Shares comprised in its Placing participation under the laws of all relevant jurisdictions which apply to it, that it has fully observed and will fully observe such laws and has obtained all governmental and other consents which may be required thereunder and complied with all necessary formalities and it has paid any issue, transfer or other taxes due in connection with its acceptance in any jurisdiction and that it has not taken any action or omitted to take any action which will or may result in Stockdale or the Company or any of their respective directors, officers, agents, employees or advisers acting in breach of the legal and regulatory requirements of any jurisdiction in connection with the Placing or the Placee's acceptance of the Placing participation;

 

•          it has not relied on, and will not rely on, any information given or any representations, warranties or statements made at any time by any person in connection with Admission, the Placing, the Company, the Placing Shares or otherwise, other than the information contained in the Announcement and these Terms and Conditions; and that in making its application under the Placing it will be relying solely on the information contained in the Announcement and these Terms and Conditions;

 

•          it will pay the full subscription sum at the Placing Price as and when required in respect of all Placing Shares for which it is required to subscribe under its Placing participation and will do all things necessary on its part to ensure that payment for such shares and their delivery to it or at its direction is completed in accordance with the standing CREST instructions (or, where applicable, standing certificated settlement instructions) that it has in place with Stockdale or puts in place with Stockdale;

 

•          its obligations under the Placing are valid, binding and enforceable and that it has all necessary capacity, consents and authority, and has obtained all necessary consents and authorities to enable it to commit to participation in the Placing and to perform its obligations in relation thereto and will honour its obligations;

 

•          it does not expect Stockdale to have any duties or responsibilities towards it for providing protections afforded to Stockdale's clients under the rules set out in The Financial Conduct Authority Handbook (the "FCA Handbook") or under the regulatory system (as defined in the Glossary to the FCA Handbook) (the "Rules") or advising it with regard to the Placing Shares and that it is not a client of Stockdale as defined by the Rules. It agrees that any payment by it will not be treated as client money governed by the Rules;

 

•          any exercise by Stockdale of any right to terminate the Placing Agreement shall be within Stockdale's absolute discretion in accordance with its terms and that Stockdale shall not have any liability to it whatsoever in relation to any decision to exercise or not to exercise such right;

 

•          it is in Stockdale's absolute discretion to agree to extend the time or waive the requirement for the satisfaction of all or any of the conditions of the Placing Agreement in accordance with its terms and otherwise to adjust the timetable for implementation of the Placing and Stockdale shall have no liability or duty to Placees whatsoever in connection with such extension or waiver. All times and dates referred to in these Terms and Conditions or in the accompanying Announcement are therefore subject to adjustment in accordance with that reservation;

 

•          it does not expect Stockdale to have any duty to it similar or comparable to the "best execution", "suitability" and "risk warning" rules in the Rules and that it is not relying on Stockdale to advise whether or not the Placing Shares are in any way a suitable investment for it;

 

•          it is not relying on any representations, warranties, statements or agreements by Stockdale or the Company or by any director, employee or agent of Stockdale or the Company or any other person except as set out in the Announcement or these Terms and Conditions;

 

•          it will (or will procure that its nominee will), if applicable, make notification to the Company of the interest in its ordinary shares in accordance with the Companies Act 2006 and Chapter 5 of the Disclosure Guidance and Transparency Rules made under the Financial Services and Markets Act 2000;

 

•          it is not (and is not applying on behalf of) a person who falls within the special charge to stamp duty reserve tax (broadly, persons or nominees or agents for persons, whose business is or includes using depository receipts or the provision of clearance services) nor who attracts a higher rate of stamp duty (including, without limitation, under section 67, 70, 93 or 96 of the Finance Act 1986);

 

•          it is liable for all and any stamp duty or stamp duty reserve tax and any related costs, fines, penalties and interest arising in respect of the delivery and settlement in respect of the Placing Shares comprised in its Placing participation;

 

•          these Terms and Conditions and any contract which may be entered into between a Placee and Stockdale pursuant hereto shall be governed by and construed in accordance with the laws of England and that it submits to the exclusive jurisdiction of the English Courts as regards any claim, dispute or matter arising out of or relating to these Terms and Conditions or any such contract;

 

•          it has complied with its obligations under the Relevant Anti-Money Laundering Procedures and it acknowledges that it is a term of its Placing participation that, to ensure compliance with all the Relevant Anti-Money Laundering Procedures, Stockdale may, in its absolute discretion, require verification of a Placee's identity. Pending the provision to Stockdale of evidence of identity, definitive certificates for the Placing Shares may be retained at Stockdale's absolute discretion;

 

•          it is aware of its obligations in connection with the Criminal Justice Act 1993 and the Market Abuse Regulation (EU)596/2014 and it has complied and will comply with those obligations;

 

•          time is of the essence as regards its obligations under this Appendix;

 

•          its participation in the Placing would not give rise to an offer being required to be made by it or any person with whom it is acting in concert pursuant to Rule 9 of the City Code on Takeovers and Mergers;

 

•          it is an institution or other investor that has knowledge and experience in financial, business and international investment matters as is required to evaluate the merits and risks of subscribing for the Placing Shares and it is experienced in investing in securities of this nature and in this sector and is aware that it may be required to bear, and it, and any accounts for which it may be acting, are able to bear, the economic risk of, and is able to sustain, a complete loss in connection with the Placing. It has relied upon its own examination and due diligence of the Company and its associates taken as a whole, and the terms of the Placing, including the merits and risks involved;

 

•          all notices, remittances and documents of title are sent to it or its agent at its own risk;

 

•          it acknowledges and agrees that Stockdale is entitled to exercise any of its rights under the Placing Agreement or any other right in its absolute discretion without any liability to Placees; and

 

•          it irrevocably appoints any director of Stockdale or the Company as its agent for the purpose of executing and delivering to the Company and/or its registrars any and all documents, and taking such other action, on its behalf necessary to enable it to be registered as the holder of any Placing Shares in its Placing participation.

 

The above warranties, representations, confirmations, acknowledgements and agreements will survive completion of the Placing. Stockdale shall be entitled to exercise any of its rights under the Placing Agreement or any other right in its absolute discretion without any liability to Placees including, without limitation, the extension of any time limit, waiver in full or in part of any condition or term in the Placing Agreement or the termination of the Placing Agreement if any condition therein has not been satisfied.

 

To the extent that a Placee fails to pay Stockdale the subscription monies relating to its participation in the Placing in accordance with the settlement arrangements set out above, then Stockdale shall be entitled to:

 

a)    delete its name from the list of Placees; or

b)    notify the Placee that its Placing participation will remain on such list but will be sold by Stockdale on its behalf and Stockdale shall proceed immediately to sell such shares at such price as Stockdale may determine (which may be less than the Placing Price), in which event the sale proceeds received, net of costs of sale (including any taxes), shall be paid to Stockdale. To the extent that such net proceeds are less than the aggregate Placing Price in relation to its final Placing participation, a Placee shall continue to be liable for such difference and Stockdale may demand and seek payment of the same from it. By a Placee's acceptance of these Terms and Conditions, it hereby appoints Stockdale as its agent to sign all documents required to give effect to this paragraph.

 

Neither the Announcement nor these Terms and Conditions constitute an offer to sell, or the solicitation of an offer to buy, Placing Shares in any jurisdiction in which such an offer or solicitation is unlawful. The Placing Shares have not been and will not be registered or qualified for sale under the securities laws of the US or any of its states or possessions, Canada, Australia, the Republic of South Africa or Japan. Accordingly, the Placing Shares may not be offered or sold, directly or indirectly, in, into or within the US or to US Persons (as defined below) or within or to persons in or resident in or citizens of, or taxpayers to, the US, Canada, Australia, the Republic of South Africa or Japan or any other jurisdiction in or into which such actions are or would be unlawful, and neither the Announcement nor these Terms and Conditions may be distributed in or into or within the US, Canada, Australia, the Republic of South Africa or Japan or any other jurisdiction in which such distribution is or would be unlawful, except in the case of the US, pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act of 1933, as amended. By making an oral confirmation of a firm Placing participation, a Placee confirms, represents and warrants severally, and not jointly nor jointly and severally, that it is not a US Person or a person resident in Canada, Australia, the Republic of South Africa or Japan or any other jurisdiction in which this offer is or would be unlawful, and it is not acquiring Placing Shares on behalf of, or with a view to re-sale directly or indirectly to any US Person or a person resident in Canada, Australia, the Republic of South Africa or Japan or any other jurisdiction in which such actions are or would be unlawful, or to any other person whom it has reason to believe is purchasing or subscribing for such Placing Shares for the purposes of such re-offer or re-sale. "US Person" means a citizen or resident of the US, a citizen or partnership or other entity created or organised in or under the laws of the US or any sub-division thereof or therein and any estate or trustee which is subject to US federal income taxation regardless of its source.

 

Any decision in connection with any proposed purchase of Placing Shares must be made solely on the basis of the information contained in the Announcement and these Terms and Conditions. Any presentation materials supplied to Placees were for their own information and may not be reproduced, further distributed to any other person or published, in whole or in part, for any purposes whatsoever. In particular, they must not be distributed to any person with an address in the US, its territories or possessions, or Canada, Australia, the Republic of South Africa or Japan or to any national or resident of the US, Canada, Australia, the Republic of South Africa or Japan or any corporation, partnership, or other entity created or authorised under the laws of the US, Canada, Australia, the Republic of South Africa or Japan. Any such distribution could result in a violation of the laws of the US, Canada, Australia, the Republic of South Africa or Japan.

 

Any presentation and accompanying materials distributed by the Company were directed solely at persons who are either Relevant Persons and/or Qualified Investors and it is not intended that they should be acted upon in any way and nor should they be disclosed in any way to any person who is not a Relevant Person or a Qualified Investor.

 

No offering document, prospectus or admission document has been or will be submitted to be approved by the FCA or submitted to the London Stock Exchange in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in the Announcement and these Terms and Conditions released by Warpaint today and any information previously published by the Company by notification to a Regulatory Information Service, and subject to the further terms set forth in the confirmation note to be provided to individual Placees.

 

Any forward looking statements, including any projections, contained in any presentation and presentation materials are for the internal planning purposes of the Company and its senior management only, have not been commented or reported on by the Company's auditors and accordingly may not necessarily be on a basis that is consistent with the Company's accounting policies. Actual results may differ substantially from figures used for planning purposes only and, accordingly, any such forward looking statements or projections should not be relied on in any manner whatsoever.

 

Stockdale confirms that, in relation to the arrangements referred to herein, it is acting in the provision of corporate finance services to the Company for its own account, within the meaning of the Rules, and Stockdale is an authorised person for the purposes of the Financial Services and Markets Act 2000 (as amended).

 

Stockdale is acting as broker and bookrunner to the Company in relation to the Placing and Admission. Stockdale will receive a fee and a commission in relation to its services to the Company in the Placing. As stated above, a Placee will not be treated as a client of Stockdale in respect of transactions entered into under these Terms and Conditions. The value of shares and the income derived therefrom may go down as well as up. Past performance of investments is not a guarantee of future returns. An investment will be made on the basis of the contents of these Terms and Conditions and the Announcement.

 

All times and dates in these Terms and Conditions and the Announcement may be subject to amendment. Stockdale shall notify Placees of any changes.

 

 

 

APPENDIX II

 

DEFINITIONS

 

 

 

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

 

Acquisition	the proposed acquisition by Warpaint of the entire issued and to be issued share capital of Retra pursuant to the terms of the Sale and Purchase Agreements;
Admission	admission of the New Ordinary Shares to trading on AIM and such admission becoming effective in accordance with the AIM Rules for Companies;
AIM	the AIM market operated by the London Stock Exchange;
AIM Rules for Companies	the rules of AIM as set out in the publication entitled 'AIM Rules for Companies' published by the London Stock Exchange from time to time;
Announcement	this announcement, together with the appendices, dated 13 November 2017;
Articles	the articles of association of the Company;
Bookbuild	the bookbuild process to determine demand for the Placing and which will open immediately after the issue of this Announcement;
Business Day	any day (excluding Saturdays and Sundays) on which banks are open in London for normal banking business and the London Stock Exchange is open for trading;
certificated or in certificated form	the description of a share or other security which is not in uncertificated form (that is not in CREST);
Circular	the circular expected to be posted to Shareholders on or around 13 November 2017;
Closing Price	the closing middle market quotation of an Ordinary Share as published by the London Stock Exchange;
Company or Warpaint	Warpaint London Plc a company incorporated in England and Wales with registered number 10261717 and having its registered office at Units B&C, Orbital Forty Six, The Ridgeway Trading Estate, Iver, Buckinghamshire, SL0 9HW;
Completion	completion of the Acquisition in accordance with the terms of the proposed Sale and Purchase Agreements, expected to occur on 30 November 2017;
Consideration Shares	the 1,052,631 new Ordinary Shares to be allotted and issued under the terms of the Sale and Purchase Agreements;
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 participant	a person who is, in relation to CREST, a system participant (as defined in the CREST Regulations);
CREST Regulations	the Uncertificated Securities Regulations 2001, as amended;
Directors or the Board	the directors of Warpaint;
EBITDA 2017	Retra's consolidated earnings before interest, taxation, depreciation and amortisation for the year ending 31 December 2017;
Enlarged Group	the Group, as enlarged by the Acquisition;
Enlarged Share Capital	the issued share capital of the Company immediately following Admission, assuming all of the New Ordinary Shares are allotted and issued;
EU	the European Union;
Euroclear	Euroclear UK & Ireland Limited;
Existing Ordinary Shares or Existing Share Capital	the 64,538,600 Ordinary Shares in issue as at the Last Practicable Date;
FCA	the Financial Conduct Authority;
Form of Proxy	the form of proxy accompanying the Circular for use in connection with the General Meeting;
FSMA	the UK Financial Services and Markets Act 2000, as amended;
General Meeting or GM	the general meeting (or any adjournment thereof) of the Shareholders of the Company to be convened for 29 November 2017 pursuant to the Notice of General Meeting;
Group	the Company and its subsidiary undertakings at the date of this announcement (as defined in sections 1159 and 1160 of the Companies Act 2006);
Last Practicable Date	10 November 2017, being the latest practicable date prior to publication of this document;
London Stock Exchange	London Stock Exchange plc;
Money Laundering Regulations	the Money Laundering Regulations 2007 (as amended and supplemented from time to time);
New Ordinary Shares	the Placing Shares and the Consideration Shares;
Notice of General Meeting	the notice convening the General Meeting, set out at the end of the Circular;
Ordinary Shares	ordinary shares of 25 pence each in the capital of the Company;
Placees	the persons who have conditionally agreed to subscribe for the Placing Shares;
Placing	the conditional placing of the Placing Shares by Stockdale, as agent on behalf of the Company, with the Placees pursuant to the Placing Agreement;
Placing Agreement	the conditional agreement dated 13 November 2017 between the Company and Stockdale in relation to the Placing;
Placing Price	190 pence;
Placing Shares	the up to 11,157,894 Ordinary Shares to be issued by the Company under the Placing;
Prospectus Rules	the Prospectus Rules published by the FCA;
Regulatory Information Service	has the meaning given in the AIM Rules for Companies;
Resolutions	the resolutions to be proposed at the General Meeting which are set out in full in the Notice of General Meeting;
Retra	Retra Holdings Limited, a company incorporated in England and Wales whose registered number is 00762818 and having its registered office at Holden Beck Barn, Hainsworth Road, Silsden, Keighley, West Yorkshire BD20 0LU ;
Sale and Purchase Agreements	the sale and purchase agreements dated 13 November 2017 between the Vendors and the Company relating to the Acquisition;
Shareholders	holders of Existing Ordinary Shares;
Stockdale	Stockdale Securities Limited, a company incorporated in England and Wales with registered number 00762818 and having its registered office at Beaufort House, 15 St. Botolph Street, London, EC3A 7BB;
Uncertificated or in uncertificated form	recorded on a register of securities maintained by Euroclear UK & Ireland Limited in accordance with the CREST Regulations as being in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of CREST;
UK or United Kingdom	the United Kingdom of England, Scotland, Wales and Northern Ireland;
US or United States	the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia; and
Vendors	Kai Arter, Linda Arter, Steven Richardson and Finance Yorkshire Equity L.P.

 

 

 

All references in this announcement to "£" or "p" are to the lawful currency of the United Kingdom.