Amendment to Share Purchase Agreements

8 September 2020

The Panoply Holdings PLC

("The Panoply", or the "Group")

Amendment to Share Purchase Agreements

The Panoply (AIM: TPX), the technology-enabled services group focused on digital transformation, announces that the Group has entered into various agreements to amend the terms of a number of its historical share purchase agreements ("SPA"). The details of these amendments are set out below.

In line with the Group's strategy, as announced in its recent Annual Report, to consolidate its end-to-end propositions under two full stack brands, The Panoply has agreed to accelerate the end of the earn-out periods in respect of FutureGov and Ameo with a view facilitating full integration into the Group. Ameo is becoming part of FutureGov, supercharging its change delivery and opening new doors within local and central Government for even bigger impact. Ameo supports its clients through full stack change delivery to build the best outcomes for citizens with long term impact. Both Ameo and FutureGov continue to trade strongly in line with expectations.

The result of these changes, together with the other amendments detailed below, is to increase the total deferred consideration now known to be payable by The Panoply to £20,835,794.  The maximum further shares to be issued as a result of this consideration is 26,395,283, which reduces to 18,719,658 assuming the share price remained constant at 130p, being the closing mid market price on the day prior to this announcement.

SPA for the acquisition of the entire issued share capital of FutureGov Ltd ("FG") dated 11 June 2019 (the "FG SPA")
 

The parties to the FG SPA have agreed that the FG sellers will receive deferred earn-out consideration equal to a fixed amount of £1,249,290 in respect of the 12 month period ending on 31 March 2021.

The FG SPA has been amended so that this amount is to be paid in substitution for amounts that were previously to have been determined by a calculation that was predominantly based on FG's EBITDA performance for the period to 31 March 2021 ("FG Reference Period").  Otherwise the terms of the original FG SPA are not substantially changed, including in respect of the proportion of consideration payable as ordinary shares in the Panoply (96%) ("Panoply Shares") and cash (4%).

Further, the number of Panoply Shares to be issued and allotted continues to be calculated by dividing the earn-out price payable by the greater of 83.125 pence and the volume-weighted average mid-market price ("VWAP") over the 30 business days prior to the issue of the relevant Panoply Shares. The timing of the issue and allotment of these Panoply Shares also remains unchanged, being in four tranches following the publication of the accounts of the Panoply for the relevant FG Reference Period.

The cash element of the deferred earn-out consideration, being £121,136.40, will be paid by the Panoply within 10 business days of this announcement. 

SPA for the acquisition of the entire issued share capital of AMEO Professional Services Limited ("Ameo") dated 10 March 2020 (the "Ameo SPA")

The parties to the Ameo SPA have agreed that the Ameo sellers will receive deferred earn-out consideration equal to fixed amounts of: 

1.     £416,460 in respect of the 17 month period ending on 31 March 2021 and; 

2.     £889,710 in respect of the 12 month period ending on 31 March 2022.  

The Ameo SPA has been amended so that these amounts are to be paid in substitution for amounts that were previously to have been determined by a calculation that was predominantly based on Ameo's EBITDA performance for each of these periods (each an "Ameo Reference Period"). Otherwise the terms of the Ameo SPA are not substantially changed and the number of Panoply Shares to be issued and allotted remains calculated by dividing the earn-out price payable by  the greater of 82 pence and the VWAP over the 30 business days prior to the issue of the relevant Panoply Shares. The timing of the issue and allotment of these Panoply Shares also remains unchanged, being in one tranche following the publication of the Panoply's accounts for the relevant Ameo Reference Period. 

SPA for the acquisition of the entire issued share capital of Greenshoot Labs Limited ("GSL") dated 11 February 2019 (the "GSL SPA")

The parties to the GSL SPA have agreed that the GSL sellers will receive deferred earn-out consideration equal to a fixed amount of £500,000 in respect of the 12 month period ending on 31 March 2020 (the "First GSL Reference Period"), in substitution for an amount that would have been previously determined by a calculation predominantly based on GSL's EBITDA performance for the First GSL Reference Period. This is to reflect the value of GSL's revenue growth during the period.

The calculation for the amount of deferred earn-out consideration in respect of the 12 month period ending on 31 March 2021 (the "Second GSL Reference Period") will remain based on the financial performance of GSL for the Second GSL Reference Period. In addition, the GSL deferred earn-out consideration remains payable by the Panoply by the issue of the relevant number of Panoply Shares (calculated in accordance with the GSL SPA) in one tranche following the publication of the Panoply's accounts for the First and Second GSL Reference Period (as applicable).

SPA for the acquisition of the entire issued share capital of Deeson Group Holdings Limited ("DGHL") dated 18 December 2018 (the "DGHL SPA")

The maximum total amount of consideration that can be payable under the DGHL SPA has been increased to £4,580,000. This a reflection of the strong financial performance of DGHL.

Agreement between Neal Gandhi and Maxine Tolfrey 

Neal Gandhi ("NG") has entered into an agreement (the "Agreement") with Maxine Tolfrey ("MT") in relation to MT's rights and obligations pursuant to the share purchase agreement for the acquisition of the entire issued share capital of Questers dated 11 May 2018 (the "Questers SPA"). 

Pursuant to the Agreement, MT has agreed that she will transfer to NG any further consideration she may receive pursuant to the Questers SPA. The Agreement has been entered into in compliance with the divorce settlement between NG and MT.

Related party transactions

The entry into the amendment agreements with the shareholders of FG, Ameo, GSL and DGHL each constitute related party transactions under the AIM Rules for Companies. The Directors of The Panoply (who are all independent in relation to these matters), having consulted with Stifel, consider that the terms of those various amendment agreements are fair and reasonable insofar as the Group's shareholders are concerned.

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About The Panoply

The Panoply is a digitally native technology services company, built to service clients' digital transformation needs. Founded in 2016, with the aim of identifying and acquiring best-of-breed specialist information technology, design and innovation consulting businesses, the Group collaborates with its clients to deliver the technology outcomes they're looking for at the pace that they expect and demand.

The Group is being increasingly recognised as a leading alternative digital transformation provider to the UK public services sector, with c. 70% of its client base representing the public sector and c. 30% representing the commercial sector.

More information is available at www.thepanoply.com