InterQuest Group plc - Acquisition of Albany Beck Consulting Limited
Pubished 15th March 2018
Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). With the publication of this announcement, this information is now considered to be in the public domain.
15 March 2018
INTERQUEST GROUP PLC
("InterQuest", the "Company" or the "Group")
Acquisition of Albany Beck Consulting Limited
InterQuest Group plc, the specialist recruiter in the technology, analytics and digital market, is pleased to announce the conditional acquisition of up to 95 per cent. of the issued share capital of Albany Beck Consulting Limited ("Albany Beck") (the "Acquisition"). The consideration for the Acquisition will be satisfied through the issue of up to 13,273,400 new ordinary shares in the Company (the "Consideration Shares") to the relevant shareholders of Albany Beck.
Overview of the Acquisition
Albany Beck is a staffing and consulting firm based in London but operating in the UK and European financial markets. The Board of InterQuest believes the acquisition of the Albany Beck group presents a strong strategic fit:
- providing niche opportunities in the Risk, Regulatory and Compliance markets for other InterQuest brands;
- enabling Albany Beck to expand its operations in the US and Germany through InterQuest's local offices; and
- expanding "statement of work offerings" across all Group companies and locations.
The Albany Beck group consists of 3 companies:
- Albany Beck Consulting Limited
- IMS Worldwide Limited
- Interim Management Solutions Worldwide Limited
The shareholders of Albany Beck are James Constable who holds 45 per cent., James Pashley who holds 5 per cent. and Recruitment Capital Partners LLP ("RCP") which holds 50 per cent. of Albany Beck's issued share capital. The Group is acquiring shares in Albany Beck from RCP and James Constable (the "Selling Shareholders"). The owners of RCP include Gary Ashworth and Luke Johnson who are also directors and shareholders of Chisbridge Limited ("Chisbridge"), the majority shareholder of InterQuest Group Plc.
Completion of the Acquisition is conditional upon Albany Beck and the Selling Shareholders having complied with the transfer and pre-emption provisions contained in Albany Beck's articles of association and following such compliance being able to transfer not less than 50.01% of the ordinary shares in Albany Beck (the "Condition"). The transfer and pre-emption provisions require shares in the capital of Albany Beck to be offered to the existing shareholders of Albany Beck and for such offer to remain open for 21 days. The offer has been made and therefore, the offer period expires on 4 April 2018. If the Condition is satisfied and the shares in the capital of Albany Beck are available for transfer to InterQuest, completion of the Acquisition ("Completion") is expected to occur on that date. In the event that existing shareholders in Albany Beck decide to take up acquisition rights pursuant to the transfer and pre-emption provisions contained in Albany Beck's articles of association, then InterQuest will still complete the Acquisition over a lesser number of ordinary shares in Albany Beck, provided that such lesser number equates to at least 50.01% of Albany Beck's issued share capital.
The consideration payable for the Acquisition will be satisfied by the issue of between 6,986,001 Consideration Shares (if only 50.01 per cent. of the Albany Beck shares are acquired) and 13,273,400 Consideration Shares in the Company. Of this, 1,200,000 ordinary shares will be issued to Gary Ashworth to satisfy the repayment of an outstanding loan of £300,000 from Gary Ashworth to Albany Beck and 400,000 ordinary shares will be issued to Gary Ashworth pursuant to an agreement with James Constable in connection with the sale of IMS Worldwide Limited.
Assuming the maximum number of Consideration Shares are issued, the Consideration Shares will be issued as follows:
- RCP (in which Gary Ashworth has a 72 per cent. interest) 6,059,502 shares
- James Constable 5,613,898 shares
- Gary Ashworth 1,600,000 shares
Application will be made to the London Stock Exchange plc for the admission of up to 13,273,400 Consideration Shares to trading on AIM ("Admission"). The Consideration Shares will rank pari passu with the existing ordinary shares of the Group. Assuming satisfaction of the Condition, Admission of the new shares is expected to take place at 8.00am on 10 April 2018.
Assuming the maximum number of Consideration Shares are issued, following Admission, Gary Ashworth, will have an interest in 30,203,572 ordinary shares in the Company, equating to 58.16 per cent. of the voting rights in the Company. This includes the 22,544,070 ordinary shares held by Chisbridge, the Company's major shareholder. James Constable will have an interest in 5,613,898 ordinary shares, equating to 10.81 per cent. of the voting rights in the Company. The Selling Shareholders have agreed not to dispose of the Consideration Shares for two years following completion without the consent of the Company and Allenby Capital Limited, save in certain customary circumstances.
James Constable, the Managing Director of Albany Beck, will join the Operational Board of InterQuest with effect from Completion. On Completion, Albany Beck will have access to InterQuest's marketing/content origination and management coaching, as well as central services and will continue to trade under the name "Albany Beck".
Financial information on Albany Beck
Albany Beck has seen immediate growth in net fee income and profits, following a restructure and turnaround programme which took effect at the beginning of 2017. This has been largely due to the focus on higher value permanent and contract placements with investment banks focused on projects in the niche MIFID 2 regulation and compliance areas.
Based on Albany Beck's unaudited management accounts, prepared in accordance with UK GAAP, for the 12 months ended 31 December 2017, Albany Beck recorded revenue of £1.3 million and recorded a loss before taxation of £0.1 million. As at 31 December 2017, Albany Beck had gross assets of £0.5m and net liabilities of £0.2m. Albany Beck had an EBIT of £0.4m for the six months to 31 December 2017 (using Albany Beck's accounting policies) and the Directors expect it to make EBIT of £0.3m for the six months to 30 June 2018 (using the Company's accounting policies).
Albany Beck's unaudited management accounts have been prepared under UK GAAP. InterQuest's financial information is prepared under IFRS. Following completion of the Acquisition, Albany Beck's financial information will be prepared in accordance with InterQuest's accounting policies under IFRS.
Related Party Transactions
Gary Ashworth, Chairman of the Company, is a shareholder of RCP, a 50 per cent. shareholder of Albany Beck. In addition, Luke Johnson, a shareholder of RCP, is a shareholder of Chisbridge, the Company's major shareholder. As such, the Acquisition constitutes a related party transaction under rule 13 of the AIM Rules. David Higgins, the independent director, considers, having consulted with the Company's nominated adviser, Allenby Capital Limited, that the terms of the Acquisition are fair and reasonable insofar as the Company's shareholders are concerned.
In addition, Gary Ashworth, Chairman of the Company, will receive 1,200,000 ordinary shares in the Company to satisfy repayment of a loan from Gary Ashworth to Albany Beck and 400,000 ordinary shares will be issued to Gary Ashworth in connection with the sale of IMS Worldwide Limited. These ordinary shares will be deducted from the Consideration Shares payable to Albany Beck. David Higgins, the independent director, considers, having consulted with the Company's nominated adviser, Allenby Capital Limited, that the terms of the issue of the new ordinary shares to Gary Ashworth as repayment of his loan to Albany Beck and in connection with the sale of IMS Worldwide Limited are fair and reasonable insofar as the Company's shareholders are concerned.
Commenting on the acquisition Chris Eldridge, CEO at InterQuest said:
"Albany Beck is an excellent fit for InterQuest Group, adding specialist skills in the Risk, Regulation and Compliance sectors of the financial markets. We are excited about developing the Albany Beck brand, particularly in the US and European markets."
Following Admission, the issued share capital of the Company will consist of up to 51,931,129 ordinary shares, with one voting right per share. The Company holds 2,000 ordinary shares in treasury. Therefore, the total number of ordinary shares and voting rights in the Company will be up to 51,929,129. The figure of 51,929,129 may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the share capital of the Company under the FCA's disclosure Guidance and Transparency Rules.
This announcement contains inside information for the purposes of Article 7 of Regulation (EU) No 596/2014.
|InterQuest Group plc||Tel: +44 (0) 20 7025 0100|
|Chris Eldridge (CEO)|
|David Bygrave (CFO)|
|Allenby Capital Limited (Nomad)||Tel: +44 (0)20 3328 5656|
|John Depasquale and Asha Chotai|
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