Girovend Cashless - Acqns,Placing&Open Offer,etc.
29 Febrero 2000 - 1:10AM
UK Regulatory
RNS Number:3618G
Girovend Cashless Systems PLC
29 February 2000
GIROVEND CASHLESS SYSTEMS PLC
("GiroVend", "the Group" or "the Company")
3 ACQUISITIONS
#19.4M PLACING AND OPEN OFFER BY SINGER & FRIEDLANDER
- LAUNCH OF B2B INTERNET STRATEGY
- MOVE FROM OFFICIAL LIST TO AIM and CHANGE OF NAME TO
TRANSACSYS PLC
Key points :
* Girovend is raising up to #18.5m (net of costs) through a
Placing and Open Offer by Singer & Friedlander of 19.4 million
New Ordinary shares at 100p per share. The enlarged market
capitalisation will be #37.5m at the placing price following
completion of the Placing, Open Offer and acquisitions.
* These funds will be used to finance GiroVends B2B Internet
development plans including the creation of vertical market
hubs - or vortals.
* Plans for rapid expansion include acquisitions and joint
ventures.
* Recent deals include :
-the acquisition of Proactive Interactive which will become
part of a human resources vortal; and
- a joint venture agreement with Integrated Dental
Holdings to create the UKs first vortal for the dental
sector.
* Agreement for three acquisitions for an aggregate of #7m
has been announced today :
-Round, a customer relationship management consultancy which
will provide GiroVend with the technical resources to
develop its vortals both organically and through
acquisition;
-FMC, a specialist publisher of magazines for dental
practitioners with an existing Internet presence and
seminar business; and
-Mirage, a distributor of dental products which will be used
for fulfilment services for the dental vortal.
* Mick Newmarch (formerly Chief Executive of Prudential plc)
is joining the board as non-executive Deputy Chairman.
* The company proposes to change its name to Transacsys plc
with effect from 6 April 2000.
* At that time, Transacsys will transfer from the Official
List to AIM.
Paul McGrane, Chief Executive said:
"The European business-to-business Internet and e-commerce
market is large and offers substantial opportunities for rapid
growth. The funding, acquisitions and agreements announced
today and recently mean that Transacsys is well placed to
develop these opportunities."
Enquiries: Paul McGrane, Chief Executive 020 7-466-5000 today
Robin Fieth, Finance Director 01628 539000 thereafter
Ian Dighi at Singer & Friedlander 020 7-623-3000
Steve Liebmann at Buchanan Communications 020 7-466-5000
Placing and Open Offer of up to
19,373,881 New Ordinary Shares of 2 1/ 2 p each at an Issue
Price of 100p per share
Transfer from the Official List to
the Alternative Investment Market
Change of Name to Transacsys plc
Background
In the Company's previous interim statement the Board stated
it was confident that GiroVend was now firmly on track for
recovery. Subsequently your Board evaluated a number of growth
opportunities for the Group, consistent with stretching
targets for shareholder value, and in December 1999 your Board
announced its intention to develop the Group's transactional
technologies and marketing capabilities, which are currently
deployed in the corporate sector, towards the rapidly emerging
business to business ("B2B") internet marketplace. To this
end the Board announced at the same time its intention to
change the company name to Transacsys plc and raised
approximately #400,000 through a private placing to fund the
early stages of this development.
Since then the Board has developed its B2B internet strategy
in more detail, and at the beginning of February 2000 we
acquired Proactive Interactive Limited - a 360o management
profiling and training company with intellectual property
geared to the internet.
The new strategy, consistent with the demands of the emerging
internet marketplace, entails a business plan that is
principally revenue driven for some years ahead. Substantial
cash funds will be required, together with the ability to
issue new equity in the Company in order to attract and retain
key new management, and to acquire appropriate businesses
which can accelerate revenue growth. It is now appropriate to
seek shareholder approval for all these changes. The strategy
is in place; key management have been recruited; and a number
of strategic acquisitions have been identified.
In order to facilitate the Group's plans for both organic
growth and acquisition, your Board is pleased to announce that
it proposes to raise approximately #18.5 million (net of
expenses) by way of a Placing and Open Offer of up to
19,373,881 New Ordinary Shares at 100p per share.
B2B e-commerce
The Directors believe that the evolution of the internet and
the ability to communicate instantaneously throughout the
world has transformed the way in which businesses can operate.
However, the Directors also believe that businesses have yet
to exploit the internet to its full potential as there has
been a lack of focus on the B2B market.
The global B2B market is estimated to be three times larger
than the business to consumer markets and B2B e-commerce in
the US is projected to grow from US$ 43 billion in 1998 to US$
1.7 trillion by 2003 based on a forecast adoption rate of 10%
of total B2B commerce in the US (source Banc Boston Robertson
Stephens). Accordingly, the global market for B2B e-commerce
could be more than double the size of the US B2B e-commerce
market even assuming lower adoption rates (source: BancBoston
Robertson Stephens).
B2B vortals allow businesses operating in the same or
complementary industry sectors around the world to communicate
and trade with each other on-line, providing specific services
in core areas in the markets in which they operate, namely:
* provision of content;
* automating and facilitating transactions; and
* provision of access to shared services.
Revenues can be derived from many sources, for example,
commissions on transactions, subscription fees, access to
specialised databases, addition of value added content and
advertising revenues.
Strategy
GiroVend intends to invest in the creation or acquisition of
B2B vortals.
The Directors have proposed to change the name of the Company
to reflect the new strategy of the Company more accurately.
However the GiroVend brand name will be retained for use by
the Groups cashless systems business. Following the change of
name of the Company, it is intended that each vortal will be
branded with the letter "t" followed by the name of the
industry sector in which the vortal is located, for example,
"t-dental".
The Directors intend that GiroVend will operate vortals in a
number of different industry sectors utilising shared
technology. Each vortal will provide access to a broad range
of content, and be a medium for transactions and other
services, the vortals will be complemented by the provision of
horizontal services.
Currently, there are few fully operational multi-industry B2B
vortals operating within Europe. The Directors are aware that
certain corporations have recently announced intentions to
operate such vortals but, as yet, given the infancy of the
market, little brand loyalty exists to any particular B2B
vortal operator. The Group's roots are based in the provision
of corporate services to major corporations and the Group also
has a recognised existing brand that has engendered brand
loyalty. The Board believes that GiroVend is well positioned
to take advantage of the opportunities that exist to create
and operate B2B vortals.
B2B vortal development and acquisitions
The following criteria have been identified by the Directors
as being necessary when identifying suitable industry sectors
for creation or acquisition of B2B vortals:
* a large number of buyers and sellers in the sector;
* fragmented markets on both the supply and demand sides;
* defined market providing the opportunity to deliver supply
chain efficiencies;
* ability to provide swift access to information or services;
and
* rapid and significant product evolution.
GiroVend has already enlarged its management team to enable it
to begin to create and/or acquire B2B vortals.
The Company has now entered into a conditional agreement to
acquire Round, a customer relationship management consultancy.
Round advises clients on the application of technology in
relation to customer relationship management. The Directors
intend to use Round's customer recognition and personalisation
skills to develop vortals in the Group's chosen industry
sectors. The Directors believe that this will be a source of
differentiation for the Group's vortals.
The Directors consider that there is an opportunity to create
vortals for dispersed professional groups, who have demanding
information requirements and that such groups may also be
sophisticated users of the Internet who are receptive to the
opportunity to have access to information which may previously
have been difficult or expensive to locate or to communicate
with fellow professionals.
In pursuit of this strategy, the Company has already announced
a co-operation agreement with IDH, to create a vortal for the
dental industry. IDH is the UK's largest operator of dental
practices, currently owning over 80 dental practices and
engaging more than 350 dentists. Matthew Allen is a non-
executive director and shareholder in IDH. As a result of
entering into this co-operation agreement, the Company has
entered into a conditional agreement to acquire FMC, a
specialist publisher of journals and organiser of seminars for
the dental profession.
The directors intend that FMC shall be the initial component
of a dental vortal within the medical and chemical sector. FMC
publications currently carry advertising from the major
suppliers of dental products to dental practitioners in the UK
and with whom FMC has well established contacts. The dental
vortal will be managed by IDH under a management agreement.
GiroVend has also entered into a conditional agreement to
acquire from Mirage from A-Z Dental Holdings Limited, a wholly
owned susidiary of IDH. Mirage is a dental products
distribution business. The Directors consider that this
acquisition offers a potential fulfilment mechanism for the
dental vortal.
In early February 2000, the Company completed the acquisition
of Proactive Interactive Limited, whose principal activity is
the development and sale of management profiling and training
products geared to internet sales. The Directors intend that
Proactive Interactive Limited shall be the initial component
of a human resources vortal and that its products will be
offered across other vortals as a horizontal service.
Structure
The Directors intend that the Group's information technology
infrastructure will be applicable across all its vortals
providing potential for economies of scale. The Group does not
intend to commission bespoke software and will instead acquire
and integrate off the shelf or third party hosted software.
The Directors intend that functional elements of the software
will include components to manage the user base and support
transactions within a secure environment together with
administrative components relating to the provision of content
and communication services.
Management changes and appointments
In pursuit of the proposed new strategy to transform GiroVend
into Transacsys, there are a number of changes involving
existing GiroVend personnel:
* Paul McGrane (age 48) - currently CEO of GiroVend will
remain as CEO of Transacsys. Paul has held a number of
senior marketing positions at board level, notably Marketing
Director, Guinness Brewing Worldwide and Marketing and
Strategy Director, Prudential UK. In the latter position, he
devised, championed and led the development project which
became Egg, and was a Board Director of PruTech. He also has
hands on experience of building his own marketing services
group in the 1980's and of turnaround situations with
Carlton Communications. This wide marketing, commercial and
technological background makes him well qualified to build
Transacsys as proposed.
* Blackett Ditchburn (age 43) - has worked alongside Paul
since July 1999 in turning GiroVend around. Initially
responsible for regenerating the sales effort, he has more
recently focussed on improving performance in Customer
Service and Manufacturing. In January 2000 he was appointed
Chief Executive of GiroVend Ltd and is responsible to the
Board for the day to day management of the core cashless
systems business. He has extensive experience in marketing
communications and has advised on the potential of the
internet for a variety of clients as a board director of
Carat Insight Ltd.
Immediately following Admission, GiroVend will appoint the
following Directors to the Board :
* Clare Salmon (age 36), who joins from Avis Europe where she
was responsible for developing that group's European e-
commerce capabilities. Originally with the Boston Consulting
Group, Clare has also worked as a consultant to Virgin
Direct on its e-commerce strategy, and was the Consumer
Marketing Director for Prudential Retail including
responsibility for that group's internet strategy project.
Clare will be responsible for the commercial development of
GiroVend's vortal business.
* Wayne Grundy (age 33), is currently an associate at the
business technology office of McKinsey & Co. Wayne was
previously Interactive Systems Director for British Airways
(Airmiles) and Multimedia Development Director for the
Automobile Association, in both cases with responsibility
for their web sites. Wayne will be responsible for the
technological development of GiroVends vortal business.
* Peter Massey (age 43), was a founding partner, majority
shareholder and director of Round - one of GiroVend's
proposed acquisitions - having previously built and sold a
successful customer relationship management consultancy
business, Aspen Consultancy. Peter will be responsible,
along with Paul McGrane, for the identification and
development of new vortal opportunities.
* Michael Newmarch (age 61), had a long career with the
Prudential culminating in his role as chief executive. Since
leaving in 1995 he has pursued a number of business
interests including several non- executive directorships.
Mick will serve as non-executive deputy chairman.
Reasons for the Placing and Open Offer
The Directors intend that the proceeds of the Placing and Open
Offer will be used to provide working capital for the
expansion of the Group through organic growth and through
acquisitions, investment in the infrastructure required
relating to the change in strategy of the Group, technical
costs and employee costs.
The Placing and Open Offer is conditional, inter alia, upon
Admission, the passing of the Resolutions and the Placing
Agreement having become unconditional in all respects and not
being terminated in accordance with its terms prior to 7 April
2000 (or such later date, being not later than 21 April 2000,
as the Company, Collins Stewart or Singer & Friedlander may
agree).
The Company intends to raise #16 million by way of a Placing
of 16,000,000 New Ordinary Shares at the Issue Price of 100p
per share to institutional clients of Collins Stewart, the
Company's nominated broker.
Qualifying Shareholders are being offered the opportunity to
participate in the fund raising at the same price as the
institutional investors in the Placing through an Open Offer
to raise approximately #3.4 million.
Terms of the Open Offer
Qualifying Shareholders will be offered New Ordinary Shares
pro rata to their existing shareholdings on the basis of:
1 New Ordinary Share for every 5 Existing Shares
held by them on the Record Date and so in proportion for any
other number of Existing Shares then held, rounded down to the
nearest whole number of New Ordinary Shares. Fractions of New
Ordinary Shares will not be allotted to Qualifying
Shareholders under the Open Offer.
The Open Offer Shares, when issued and fully paid, will rank
pari passu in all respects with the existing Ordinary Shares.
Qualifying Shareholders may apply for any number of Open Offer
Shares up to or in excess of their guaranteed entitlement as
set out in the Application Form. Applications in excess of
Qualifying Shareholders' guaranteed entitlements will be
satisfied only to the extent that corresponding applications
by other Qualifying Shareholders are made for less than their
guaranteed entitlements and may therefore be scaled down.
Allocations of Open Offer Shares in respect of excess
applications will be made pro rata to Qualifying Shareholders'
entitlements to Open Offer Shares under the Open Offer.
Due to the number of Existing Shares held by members of your
Board, the Directors, due to their personal financial
circumstances are unable to take up their full entitlement
under the Open Offer. However, irrevocable undertakings to
subscribe for in aggregate 74,000 Open Offer Shares
(representing 2.19 per cent. of the Open Offer Shares) have
been received from Paul McGrane, Blackett Ditchburn, Robin
Fieth, Matthew Allen and Ron Clark, being all those members of
your Board who are Shareholders with the exception of Jacques
Gahagnon, who is unable to take up his entitlement.
A circular and application form is expected to be posted on
the 29 February 2000; application forms are personal to the
shareholder(s) named on the form and may not be assigned or
transferred, except to satisfy bona fide market claims
pursuant to the rules of the London Stock Exchange.
The latest time and date for receipt from Qualifying
Shareholders of the completed Application Forms and payment in
full in respect of the Open Offer is 3.00pm on Wednesday 5
April 2000.
Transfer to AIM
The Board believes that it is appropriate for GiroVend's
listing to be transferred to AIM to afford the Company greater
flexibility to implement its strategy of expansion.
The AIM Rules require that the Company appoints a nominated
adviser and nominated broker before its Ordinary Shares are
admitted to trading on AIM. Singer & Friedlander has agreed to
act as nominated adviser and Collins Stewart has agreed to act
as nominated broker.
The admission of the Ordinary Shares to trading on AIM will
not affect the way in which Shareholders buy or sell Ordinary
Shares.
The Board is aware that circumstances which may apply to
certain Shareholders may prohibit them from investing in AIM
Shares. Such Shareholders are advised to review their position
in this respect as soon as possible.
It is expected that the Ordinary Shares and the New Ordinary
Shares will be admitted to trading on AIM and that dealings
will commence on Friday 7 April 2000. The listing of the
Ordinary Shares on the Official List will be cancelled at the
same time.
Extraordinary General Meeting
An EGM will be held at the offices of Singer & Friedlander
Limited, 21 New Street, Bishopsgate, London, EC2M 4HR at 9.00
a.m. on 6 April 2000.
Expected Timetable of Principal Events
Record date for the Open OfferClose of business on Tuesday 22
February 2000
Latest time and date for splitting Application Forms 3.00pm on
Monday 3 April 2000
(to satisfy bona fide market claims only)
Latest time and date for receipt of Application Forms and 3.00
pm on Wednesday 5 April 2000
payment in full under the Open Offer
Latest time and date for receipt of completed Proxy Forms 9.00
am on Tuesday 4 April 2000
Extraordinary General Meeting 9.00am on Thursday 6 April 2000
Expected time and date of commencement of dealings on 8.00am
on Friday 7 April 2000
AIM in Ordinary Shares and New Ordinary Shares
Expected time and date of delivery into CREST of Friday 6 April 2000
New Ordinary Shares to be held in uncertificated form
Expected date of despatch of definitive share certificates in
respect of New Ordinary Shares to be held in certificated form
Friday 14 April 2000
Statistics
* Issue Price 100p
* Number of Ordinary Shares currently in issue 14,469,408
* Number of Deferred Shares currently in issue 2,400,000
* Number of New Ordinary Shares to be issued pursuant to the
Placing and Open Offer
up to 19,373,881
* Number of New Ordinary Shares to be issued pursuant to the
acquisitions of Round and FMC
3,700,000
* Number of Ordinary Shares in issue following the Placing and
Open Offer up to 37,543,289
* Enlarged market capitalisation at the Issue Price #37.5m
* Estimated net proceeds of the Placing and Open Offer #18.5m
END
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