Acquisition of FIM Services Ltd

RNS Number : 8256M

Gresham House PLC

02 May 2018

 

NEITHER THIS ANNOUNCEMENT NOR ANY PART OF IT CONSTITUTES AN OFFER TO SELL OR ISSUE OR THE SOLICITATION OF AN OFFER TO BUY, SUBSCRIBE OR ACQUIRE ANY SECURITIES IN ANY JURISDICTION IN WHICH ANY SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL AND THE INFORMATION CONTAINED HEREIN IS NOT FOR PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, NEW ZEALAND, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. 

THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFERING OF SECURITIES FOR SALE IN THE UNITED STATES OF AMERICA AND NO SECURITIES HAVE BEEN OR WILL BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT 1933, AS AMENDED (THE "SECURITIES ACT") OR UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION IN THE UNITED STATES OF AMERICA.

FOR IMMEDIATE RELEASE

2 May 2018

Gresham House Plc ("Gresham House" or "the Company")

(AIM: GHE)

Acquisition of FIM Services Ltd, a specialist manager in real assets investments,

and

Proposed Placing of new ordinary shares to raise approximately £15.0 million

and

Notice of General Meeting

Gresham House, the specialist alternative asset manager, is pleased to announce the proposed acquisition (the "Acquisition") of the entire issued share capital of FIM Services Limited ("FIM"), an alternative investment fund manager specialising in UK real assets, specifically sustainable forestry and renewable energy investments, by its wholly-owned subsidiary, Gresham House Holdings Limited ("GHH"), for a total consideration of up to £25.0 million on a cash-free, debt-free basis (subject to certain adjustments).

The Acquisition combines two leading firms in UK commercial forestry management and renewables, adding both assets under management ("AUM") and in-house investment expertise to Gresham House Forestry and Gresham House New Energy. Upon completion, Gresham House's AUM will be over £1.5 billion across five specialist alternative investment strategies: forestry, new energy, UK housing and infrastructure, private assets and strategic public equity.

On completion, Gresham House will pay an initial consideration of £21.0 million comprising £11.2 million in cash and £9.8 million in loan notes (such loan notes to be exchanged for new ordinary shares in Gresham House) (the "Consideration Shares"). Further deferred consideration of up to £4.0 million will be payable by the Company, subject to the satisfaction of certain performance targets being met over a two year period post-Completion.

Gresham House has a robust investment process when appraising balance sheet investments. The acquisition of FIM is expected by the Directors to provide financial returns which exceed its 15 per cent. return on capital hurdle in the short-medium term alongside material earnings enhancement before identified synergies. The historic acquisition multiple is 6.2x EBITDA, rising to 7.4x with full deferred payments, thereby accelerating the Company's profitable growth and increasing the potential to pay dividends.

In addition, Gresham House is pleased to announce the proposed conditional placing of new ordinary shares in the Company (the "Placing Shares") at a price of 410 pence per Placing Share (the "Placing Price") to raise approximately £15.0 million (before expenses) (the "Placing"). The proceeds of the Placing will be used to satisfy, in part, the cash consideration payable pursuant to the Acquisition.

The Placing is being conducted through an accelerated book building process (the "Accelerated Book Build") which will be launched immediately following the release of this announcement (the "Announcement") and which is expected to close no later than 4.00 p.m. (BST) today. Liberum Capital Limited ("Liberum Capital") is acting as financial adviser, nominated adviser, broker and sole bookrunner in relation to the Placing.  The Placing is not being underwritten.

Highlights

The Acquisition

•	The Acquisition combines two leading firms in UK commercial forestry management and renewables, adding both AUM and in-house investment expertise to Gresham House Forestry and Gresham House New Energy.
•	Upon completion of the Acquisition, Gresham House's AUM will be over £1.5 billion across five specialist alternative investment strategies: forestry, new energy, UK housing and infrastructure, private assets and strategic public equity.
•	The Acquisition should accelerate the Group's (as enlarged by the Acquisition) profitability growth and increase the potential to pay dividends.

Taurus London acted as lead adviser to Gresham House on the Acquisition.

The Placing

•	Gross proceeds of approximately £15.0 million (approximately £14.5 million net of expenses) to be raised via a proposed Placing at an issue price of 410 pence per Placing Share.
•	The Placing Price of 410 pence per Placing Share represents a 1.06 per cent. premium to the 30 day VWAP of 405.69 pence.
•	The Placing Shares represent, in aggregate, approximately 19.68 per cent. of the Company's issued share capital as enlarged by the issue of the New Ordinary Shares.
•	The proceeds of the Placing will, in addition to the Company's existing cash resources of approximately £13.5 million and cash acquired from FIM of approximately £6.0 million, be used:

◦	to satisfy the cash consideration payable pursuant to the Acquisition as well as restructuring costs and fees (of up to £22.8 million);
◦	for general corporate purposes, including seeding of new products and the provision of project development capital (approximately £5.0 million);
◦	to fund future acquisitions (approximately £3.7 million); and
◦	to provide general working capital, including satisfying regulatory and restructuring capital requirements (approximately £3.0 million).

•	Completion of the Placing will be conditional upon, inter alia, the approval by Shareholders at the General Meeting of the Resolutions and Admission occurring, details of which are set out below.

Anthony Dalwood, Gresham House CEO commented: 

"The acquisition of FIM will allow Gresham House to achieve scale and establish a market leading position as an investor in UK commercial forestry whilst also enhancing the Gresham House New Energy division. Over the last three years, we have rapidly established Gresham House as a platform for growth for specialist asset management teams. The strategic rationale, alongside the potential financial returns, are clear and exciting for Gresham House shareholders."

Richard Crosbie Dawson, Managing Director of FIM commented:

"Gresham House is the ideal home for FIM's next stage of growth. Tony and his team have a proven track record in successfully integrating businesses and our own integration planning is already underway. We have a complementary client base to Gresham House and our combined expertise and experience will facilitate new investment opportunities. We are excited about what the future holds."

The Accelerated Book Build

The Placing is being conducted by way of an Accelerated Book Build led by Liberum Capital as sole bookrunner. 

Completion of the Placing will be conditional upon, inter alia, the approval by Shareholders at the General Meeting of the Resolutions and Admission occurring.

Accordingly, the Company expects to publish a circular (the "Circular") in due course following the successful closure of the Accelerated Book Build, in order to convene the General Meeting to approve certain matters necessary to implement the Placing and the Acquisition (the "Resolutions").

The Company has today entered into the Placing Agreement with Liberum Capital which contains customary terms and conditions, described in more detail below. Pursuant to the Placing Agreement, Liberum Capital has conditionally agreed, as agent for the Company, to use its reasonable endeavours to procure Placees for the Placing Shares at the Placing Price.

Your attention is drawn to the detailed terms and conditions of the Placing described in the Appendix to this Announcement (which forms part of this Announcement).

The book for the Accelerated Book Build will open with immediate effect. The book is expected to close no later than 4.00 p.m. (BST) today. The timing of the closing of the book and the making of allocations may be accelerated or delayed at Liberum Capital's sole discretion. The Appendix to this Announcement contains the detailed terms and conditions of the Placing and the basis on which investors may participate in the Accelerated Book Build. The Placing is not being underwritten by Liberum Capital. Details of the number of Placing Shares conditionally placed with institutional and other investors pursuant to the Placing and gross proceeds will be announced as soon as practicable after the close of the Accelerated Book Build.

Qualifying investors who are invited, and who choose, to participate in the Accelerated Book Build by making an oral and legally binding offer to acquire Placing Shares, will be deemed to have read and understood this Announcement in its entirety, including the Appendix, and to be making such offer on the terms and subject to the conditions contained herein and to be making the representations, warranties, undertakings and acknowledgements contained in the Appendix to this Announcement.

The Placing Shares will be issued credited as fully paid and will rank pari passu with the existing ordinary shares in the capital of the Company (the "Ordinary Shares"), including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of such shares after the date of their issue.

Circular and Notice of General Meeting

The Company expects to publish the Circular in connection with the Placing and the Acquisition in due course, which will contain a notice convening the General Meeting in order to approve certain matters necessary to implement the Placing and the Acquisition. A copy of the Circular will be made available on the Company's website at www.greshamhouse.com. 

The General Meeting is expected to be convened for 11.00 a.m. on 21 May 2018 and will take place at the offices of the Company's solicitors, Eversheds Sutherland (International) LLP at One Wood Street, London EC2V 7WS. The actions that Shareholders should take to vote on the Resolutions will be set out in the Circular, along with the recommendation of the board of directors of the Company (the "Directors").

Admission

Application will be made for the New Ordinary Shares to be admitted to trading on AIM and it is expected that Admission will become effective and trading will commence in the Placing Shares at 8.00 a.m. on 22 May 2018.

Further details of the Placing and the Acquisition can be found below.

Defined terms used in this Announcement will have the meaning (unless the context otherwise requires) as set out in this Announcement and in the Circular to be posted to Shareholders in due course, which will be available on the Company's website www.greshamhouse.com.

This announcement is released by Gresham House Plc and contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 ("MAR"), encompassing information relating to, inter alia, the proposed Placing to raise approximately £15.0 million and the acquisition of FIM Services Ltd, a specialist manager in real assets investments described above, and is disclosed in accordance with the Company's obligations under Article 17 of MAR.

Enquiries
Gresham House Plc Anthony (Tony) Dalwood	[phone]
Liberum Capital Ltd (Financial adviser, nominated adviser, broker and sole bookrunner to the Placing) Neil Elliot/Jill Li Taurus London (Lead adviser to Gresham House) Peter Tracey/Tom Fyson/Thomas Marriage	[phone] [phone]
Montfort Communications Gay Collins/Rory King/Louis Supple	[e-mail] [phone]  [phone]
PMB Capital Ltd (Financial adviser to FIM) Richard Briance/Henrik Schliemann/Joff Evans	[phone]

IMPORTANT INFORMATION

This Announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "anticipates", "targets", "aims", "continues", "expects", "intends", "hopes", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not facts. They appear in a number of places throughout this Announcement and include statements regarding the Directors' intentions, beliefs or current expectations concerning, amongst other things, the Group's results of operations, financial condition, liquidity, prospects, growth, strategies and the industries in which the Group operates. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation: ability to find appropriate investments in which to invest and to realise investments held by the Group; conditions in the public markets; the market position of the Group; the earnings, financial position, cash flows, return on capital and operating margins of the Group; the anticipated investments and capital expenditures of the Group; changing business or other market conditions; changes in political or tax regimes, exchange rates and clients; and general economic conditions. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this Announcement based on past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Subject to any requirement under the Prospectus Rules, the Disclosure Guidance and Transparency Rules, the AIM Rules or other applicable legislation or regulation, neither the Company nor Liberum Capital undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Investors should not place undue reliance on forward-looking statements, which speak only as of the date of this Announcement.

No statement in this Announcement or incorporated by reference into this Announcement is intended to constitute a profit forecast or profit estimate for any period, nor should any statement be interpreted to mean that earnings or earnings per share will necessarily be greater or lesser than those for the relevant preceding financial periods for the Company.

This Announcement contains information regarding the Company's business and the markets in which it operates and competes, which the Company has obtained from various third party sources. Where information has been sourced from a third party it has been accurately reproduced and, so far as the Company is aware and is able to ascertain from the information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading. Such information has not been audited or independently verified.

Certain data in this Announcement, including financial, statistical and operating information, has been rounded. As a result of rounding, the totals of data presented in this Announcement may vary slightly from the actual arithmetic totals of such data. Percentages have also been rounded and accordingly may not add to 100 per cent.

This Announcement is for information purposes only and shall not constitute an offer to buy, sell, issue, or subscribe for, or the solicitation of an offer to buy, sell, issue, or subscribe for any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Liberum Capital or by any of its affiliates or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

Liberum Capital, which is a member of the London Stock Exchange, is authorised and regulated in the United Kingdom by the Financial Conduct Authority and is acting as financial adviser, nominated adviser, broker and sole bookrunner for the purposes of the AIM Rules for Companies exclusively for Gresham House in connection with the matters referred to in this Announcement and for no-one else and will not be responsible to anyone other than Gresham House for providing the protections afforded to the clients of Liberum Capital nor for providing any advice in relation to the contents of this Announcement or any transaction, arrangement or matter referred to herein.  The responsibilities of Liberum Capital, as nominated adviser, are owed solely to the London Stock Exchange and are not owed to the Company or to any director or any other person and accordingly no duty of care is accepted in relation to them. This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Liberum Capital or by any of its affiliates or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.

The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company or Liberum Capital that would permit an offering of such shares or possession or distribution of this 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 this Announcement comes are required by the Company and Liberum Capital to inform themselves about, and to observe such restrictions.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of the Appendix or this Announcement should seek appropriate advice before taking any action.

The Placing Shares to which this Announcement relates may be illiquid and / or subject to restrictions on their resale. Prospective purchasers of the Placing Shares should conduct their own due diligence on the Placing Shares. If you do not understand the contents of this Announcement you should consult an authorised financial adviser.

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, this Announcement.
 

FURTHER DETAILS OF THE PLACING, ACQUISITION AND NOTICE OF GENERAL MEETING

1                  Introduction

1.1              The Company is pleased to announce the entry into the Acquisition Agreement by Gresham House, its wholly-owned subsidiary, Gresham House Holdings Limited ("GHH"), and the FIM Vendors, pursuant to which GHH has agreed to acquire the entire issued share capital of FIM Services Limited ("FIM"), an alternative investment fund manager specialising in UK real assets, specifically sustainable forestry and renewable energy investments, for a total consideration of up to £25.0 million.

1.2              The Acquisition Agreement is conditional upon, inter alia, the passing of the Resolutions, the Placing Agreement having become unconditional in accordance with its terms (save for any condition relating to the completion of the Acquisition Agreement and Admission occurring) and the FCA having given notice in writing in accordance with section 189(4) of FSMA that it approves or has no objection to GHH and any other relevant person acquiring control (within the meaning of section 181 of FSMA) of FIM and such approval or non-objection not having been revoked prior to Completion.

1.3              The total consideration of up to £25.0 million referred to above is on a cash-free, debt-free basis (subject to certain adjustments). The consideration for the Acquisition comprises initial consideration of £21.0 million and, subject to the "Combined Forestry Group" achieving an agreed revenue target during the two years following Completion, deferred consideration of up to £4.0 million (depending on the actual revenue of the Combined Forestry Group).

1.4              The initial consideration of £21.0 million shall be satisfied by:

1.4.1      the payment of £11.2 million in cash to the FIM Vendors; and

1.4.2      the issue of £9.8 million of Consideration Loan Notes, which will be exchanged for the Consideration Shares pursuant to the terms of the Exchange Agreement.

1.5              The initial consideration will be adjusted following Completion if the cash/working capital of FIM exceeds the agreed normalised level of working capital. Any such excess cash shall be acquired for 94 pence per £1.

1.6              In addition to the initial consideration, a payment of £0.5 million shall be paid in cash to the FIM Vendors at Completion in respect of certain wind energy limited partnership investments (the "Wind LP Investments"). An additional amount may be payable to the FIM Vendors in respect of the Wind LP Investments if, prior to the date falling 24 months after Completion, there is a disposal of the Wind LP Investments for an amount which is, after the deduction of any costs incurred in relation to the disposal of the Wind LP Investments, in excess of £0.5 million.

1.7              The amount of deferred consideration payable will depend on the actual revenue generated by the Combined Forestry Group when compared to a forecast revenue target. The full £4.0 million of deferred consideration will be payable if the actual revenue generated by the Combined Forestry Group is equal to or greater than the forecast revenue target (such forecast revenue target having been determined and agreed in advance of Completion). If the actual revenue is less than the forecast revenue target, then the deferred consideration will decrease according to an agreed scale based on the amount by which the actual revenue varies from the forecast revenue target, with no deferred consideration being payable in the event that the actual revenue achieved differs adversely from the forecast revenue target by more than £1.0 million. The deferred consideration will be satisfied entirely in cash.

1.8              The principal FIM Vendors are acting as warrantors in the context of the Acquisition Agreement and are giving customary warranties about FIM, both on the date of the Acquisition Agreement and as at completion of the Acquisition Agreement. GHH has taken out warranty and indemnity insurance in respect of the warranties in the Acquisition Agreement, which reduces the exposure of the FIM Vendors in the event of a breach of warranty. This policy provides cover in the aggregate amount of £10 million for a period of two years for certain non-fundamental warranties and seven years for fundamental warranties and tax warranties and indemnities (subject to customary exclusions and limitations), effective from Completion. In respect of certain warranties for which cover is not provided by the warranty and indemnity insurance, certain FIM Vendors have separately given specific warranties in relation to such uninsured matters (subject to customary exclusions and limitations). In addition, certain of the FIM Vendors will be subject to customer and employee non-solicit and other restrictive covenants for a period of three years from Completion. Each of the FIM Vendors has also agreed to enter into a "lock-in agreement" with the Company with effect from Admission, whereby they agree that, subject to certain customary exceptions, they will not dispose of any Consideration Shares that they receive for a period of two years from the date of Admission.

1.9              The Company may terminate the Acquisition Agreement prior to Completion if there is a matter or event which:

1.9.1      causes, or is reasonably likely to cause, a material adverse change affecting FIM (not being an event affecting or likely to affect to a similar extent generally companies carrying on similar business in the United Kingdom);

1.9.2      is a material breach of any provision of the Acquisition Agreement at any time prior to Completion (and such material breach is not remedied, or is not remedial without material cost to FIM prior to Completion); or

1.9.3      would constitute a material breach of the warranties in the Acquisition Agreement if they were repeated immediately prior to Completion.

 

2                  Information on FIM

2.1              Founded in 1979, FIM is a UK asset manager specialising in sustainable UK real asset investments. As at 31 December 2017, it had AUM of approximately £893 million, encompassing:

2.1.1          83,000 hectares of forestry (£635 million of AUM); and

2.1.2          127MW of renewable energy generating assets in onshore wind farms and ground mounted solar parks (£258m of AUM).  FIM subsequently added a further 10MW in two ground mounted solar parks in January 2018.

2.2              FIM, which has 25 employees based in Oxford, accesses a wide range of investment opportunities for its clients, actively sourcing, structuring and executing transactions and providing a full asset management service at competitive fee levels. FIM's client base is complementary to that of Gresham House, with its clients including unlisted funds (accounting for approximately 62 per cent. of FIM's assets under management as at 31 December 2017), high net worth individuals (accounting for approximately 20 per cent. of FIM's assets under management as at 31 December 2017) and family offices (accounting for approximately 18 per cent. of FIM's assets under management as at 31 December 2017).

2.3              The existing FIM management team below will remain involved in the day-to-day operation of the business post-Completion:

Richard Crosbie Dawson (Managing Director)

Richard has guided the expansion of FIM over the past four decades. He is a chartered surveyor whose experience extends to dealing with all property issues. Richard's expertise includes complex documentation and due diligence matters, developing and implementing investment strategies, particularly those based on tax-efficient structures, and managing a wide range of investor contacts established through FIM's investment business.

Colin Lees-Millais (Director, Head of Forest and Land)

A chartered surveyor with 30 years' experience of investing in commercial forestry both in the UK and internationally, Colin has a strong track record in delivering sustained, long-term performance from forestry assets. He has particular expertise in the UK forestry market, woodland management and all silviculture issues and has longstanding experience of managing relationships with large family office clients.

Edward Daniels (Director, Executive Manager)

Edward is a chartered accountant and oversees the provision of fund management services to FIM's forestry funds and private clients. Prior to joining FIM, Edward worked for Ludgate Investments advising the Ludgate Environmental Fund, an AIM-quoted closed-ended fund, on investing development capital in cleantech and environmental technology companies. Previously, he was at Ernst & Young providing buy-side due diligence and related transaction services to private equity clients in New York and London.

Wayne Cranstone (Director, Renewables Chief Operating Officer)

Wayne is a chartered engineer and has a PhD in Engineering. He has 20 years of technical, commercial, stakeholder and general management experience in the energy sector. Prior to joining FIM, he was the Onshore Wind Development and Construction Director of RWE Innogy. He has overseen the construction of 16 wind farms (200MW) over the past eight years. 

2.4              FIM is authorised and regulated by the Financial Conduct Authority in the conduct of investment business to promote and operate unregulated collective investment schemes, being managed funds in forestry and renewable energy.

2.5              FIM, under its Responsible Investment Policy, seeks to ensure that investments meet strict environmental, social and governance criteria over the long-term. FIM believes that active management of these issues will deliver long-term benefits to both investors and the company. FIM is also a member of the UK Sustainable Investment and Finance Association.

2.6              The investment performance of FIM's two largest timber funds, FIM Sustainable Timber & Energy LP and FIM Forest Fund I LP, over their last four financial years is set out below:

	Total Return (%)				Average IRR (%)
	2017	2016	2015	2014	2017	2016	2015	2014	Since inception
FIM Sustainable Timber & Energy LP(1)	10.1	5.2	10.4	15.4	11.4	11.7	13.6	15.0	11.4
FIM Forest Fund I LP(2)	8.6	10.6	9.3	16.7	11.4	11.8	12.0	12.6	11.4

(1)        Inception: June 2010. Year end: May.

(2)        Inception: December 2008. Year end: November.

Source: FIM internal analysis and audited annual results for the financial years ended in 2014, 2015, 2016 and 2017.

3                  Background to, and reasons for, the Acquisition and the Placing

3.1              Acquisition rationale

The Directors believe that the Acquisition would further enhance Gresham House as a significant UK specialist alternative asset manager. In addition, the Group would manage more than 100,000 hectares of high grade commercial forestry. In particular, the Directors believe that the Acquisition would have the following financial and strategic benefits:

3.1.1          Financial benefits:

(a)           Shareholder value would be created through exceeding Gresham House's return on investment capital hurdle of 15 per cent. in the short-to-medium term.

(b)           The Acquisition would be expected to be immediately earnings enhancing in the first full year of Gresham House's ownership post-Completion, before any benefits of identified cost synergies are considered.

(c)           Gresham House's real and strategic equity assets under management would more than double to over £1.5 billion, laying the foundation for further profit growth. Of this, £918 million will be forestry assets and £344 million will be renewable energy assets.

(d)           The Acquisition would also increase Gresham House's renewable energy assets under management by approximately £258 million (to £344 million) across a range of wind and solar assets to complement its energy storage systems.

The financial benefits of the Acquisition are illustrated in the table below:

	Gresham House December 2017	FIM September 2017	Pro Forma Combined 2017(1)
Turnover	£6.5m	£6.3m	£12.8m
Adjusted PBT(2)	£(0.7)m	£3.3m	£2.6m
Adjusted operating margin	(10.8)%	51.6%	20.2%
AUM(3)	£649m	£893m	£1,542m

(1)           Pro forma combined includes Gresham House's audited annual financial results for FY2017 plus FIM's audited annual financial results for the financial year ended 30 September 2017.

(2)           Profit before tax, depreciation, amortisation, exceptional items and gains and losses on investments.

(3)           Fee-earning assets under management.

3.1.2          Strategic benefits:

(a)           UK forestry and renewable energy are well-proven asset classes and are relatively lowly correlated to listed mainstream investments, providing diversification within an investment portfolio.

(b)           The Acquisition therefore presents an opportunity to continue the execution of Gresham House's stated strategy to grow both organically and through acquisition and to scale its existing Forestry and New Energy divisions as well as providing a platform for international expansion.

(c)           FIM's forestry investment management expertise and the addition of its forestry assets will increase the Group's scale in the forestry investment management industry, creating a business of real scale in UK timber asset management with over £900 million of forestry assets under management.

(d)           The combination of FIM's renewable energy expertise and Gresham House's existing management and platform should deepen Gresham House's New Energy division's in-house investment expertise, thereby creating new opportunities and strengthening fundraising potential.

(e)           The Acquisition should broaden the Group's client base given the complementary nature of FIM's unlisted fund, high net worth individual, family office and institutional clients.

(f)            It is expected that the Group (as enlarged by the Acquisition) will create value for clients through economies of scale:

(i)              as processing companies become ever larger, bringing substantial volumes of timber to market will protect forest owners from the risk of being marginalised, providing more placing power and thus higher prices than smaller scale ownership; and

(ii)             further consolidation is expected in the forest management sector and the larger scale is expected to provide better purchasing power and help control cost for the Group's clients.

3.2              FIM's forestry business

3.2.1      As at 31 December 2017, FIM managed £635 million of forestry assets, covering 83,000 hectares.

3.2.2      The UK timber industry was valued at over £6.3 billion in 2015 (Source: Office for National Statistics). Investors in UK forest assets are able to benefit from stable and predictable returns linked to the long term biological growth of forestry assets, which has led to consistently strong returns for forestry as an asset class when compared to more "conventional" asset classes (as illustrated in the table below).

Index	1 Year (%)	5 Years (%)	10 Years (%)	24 Years (%)
IPD Annual UK Forestry Index	10.7	14.7	17.4	9.1
Equities	19.2	8.9	5.1	7.4
Gilts	7.9	3.9	6.5	7.0
Commercial Property	3.9	9.7	4.5	9.3

Source: MSCI, JP Morgan Cazenove, Forestry Commission, IPD UK Annual Property and Forestry Indices. Annualised rates, total return as at 31 December 2016.

3.2.3      In addition to the compounding returns from biological growth, the main driver of returns from forestry is rising timber prices, which, in turn, are impacted by demand for timber. Growth in timber demand has been consistent for domestic softwood from biomass and domestic sawmills with construction uses, particularly in housebuilding, expected to be a key component of growth in the next decade. The declining supply of UK domestic timber post-2030, largely due to a significant reduction in new planting since 1990, is therefore likely to cause timber prices to increase significantly, causing forestry values to rise and, in turn, enhancing the returns available to investors in forestry assets. There has also been significant investment in processing capacity by domestic sawmills and processors, which has resulted in a highly modernised and competitive industry with a large throughput of domestic timber.

3.2.4      Whilst not correlated to traditional asset classes, UK forestry returns are positively correlated to inflation, therefore protecting real returns. As part of a managed portfolio, UK forestry provides effective diversification and risk mitigation compared to mainstream asset classes.

3.2.5      Investment in commercial forestry is also currently subject to favourable taxation treatment in the UK. Under current UK tax law there is no liability to income tax, corporation tax or capital gains tax ("CGT") arising in relation to growing timber. As a consequence, a majority of income arising in relation to a forestry investment is anticipated to be taxed at nil value. Commercial forestry should qualify for 100 per cent. relief from inheritance tax ("IHT"), through Business Property Relief ("BPR") once held for two years.

3.2.6      It should be noted that HMRC is currently reviewing the simplification of the tax regime in areas including BPR and IHT. As at the date of this Announcement, it is not clear whether, or to what extent, this review could impact upon the tax reliefs currently available in respect of investments in forestry assets. Any adverse changes to, or the withdrawal of, the tax reliefs currently available in respect of forestry investments or other adverse changes to HMRC practice relating thereto arising as a consequence of this review could negatively impact valuations of UK forestry investments, including those of the enlarged Group, and, as a consequence, returns to investors and Shareholders.

3.3              FIM's renewable energy business

3.3.1      As at 31 December 2017, FIM managed 127MW of renewable energy generating assets in onshore wind farms and ground mounted solar parks (£258m of AUM).  FIM subsequently added a further 10MW in two ground mounted solar parks in January 2018.

3.3.2      The renewable energy market offers long term income streams and stable, often inflation-linked, returns. It is a very significant growth sector in the UK today, currently accounting for more than 25 per cent. of all UK power generation.

3.3.3      Solar energy - Solar energy is the cheapest form of renewable energy in many parts of the world and becoming cheaper every year. The Directors believe that solar energy could be the world's largest energy source by 2050.

3.3.4      Wind energy - The UK wind energy resource is considered to be the best in Europe. High capacity factors generate high levels of electricity output associated revenue.

3.3.5      Energy storage - The National Grid faces a challenge to maintain network stability as renewable power generation is less predictable than traditional gas/coal plants. Utility scale batteries combined with generators and load banks, called energy storage systems, at dedicated sites are used to help manage grid stability.

3.3.6      The Directors consider that the combination of FIM's renewable energy assets and Gresham House's existing platform should serve to achieve institutional scale, allowing for a broader target client pool and leading to increased funding and development opportunities. In addition, the combination of the Gresham House and FIM management teams should create the expertise and management capacity required to accelerate and realise the Group's growth opportunity.

3.4              Integration approach and ongoing operation of the FIM business

3.4.1      Gresham House is developing a detailed integration plan in respect of FIM which will be used to track projects, actions and progress. The Group's integration-planning is already underway and will follow a similar approach to previous acquisitions made by the Group with three internal teams drawn from both businesses focused on integration of the forestry and renewable energy businesses as well as central services, finance, marketing, risk and compliance. In addition, a new governance structure will be put in place, including a management committee that will oversee the strategic development of the business and an investment committee that will have oversight and accountability.

3.4.2      Gresham House has demonstrated its ability to deliver its acquisition strategy successfully. The Group's current Forestry business was formed through the identification and acquisition in 2015 of Aitchesse, a specialist forestry asset manager. The Group successfully integrated and rebranded Aitchesse as Gresham House Forestry and has grown the division's assets under management organically by more than £90.0 million (approximately 50 per cent.) between its acquisition and 31 December 2017, delivering against the Group's targeted return on capital of 15 per cent. per annum.

3.4.3      Gresham House Forestry managed approximately £283 million of assets as at 31 December 2017 and has a strong track record of delivering expert advice and long-term investment performance, its three client portfolios returning 18.6 per cent., 16.8 per cent. and 13.9 per cent. per annum since inception.

4                  Details of the Placing and Use of Proceeds

4.1              Gresham House is proposing to raise gross proceeds of approximately £15.0 million (approximately £14.5 million net of expenses) through the issue of Placing Shares pursuant to the Placing at 410 pence per Placing Share.

4.2              The proceeds of the Placing will, in addition to the Company's existing cash resources of approximately £13.5 million and cash acquired from FIM of approximately £6.0 million, be used:

4.2.1      to satisfy the cash consideration payable pursuant to the Acquisition as well as restructuring costs and fees (of up to £22.8 million);

4.2.2      for general corporate purposes, including seeding of new products and the provision of project development capital (approximately £5.0 million);

4.2.3      to fund future acquisitions (approximately £3.7 million); and

4.2.4      to provide general working capital, including satisfying regulatory and restructuring capital requirements (approximately £3.0 million).

4.3              The Placing Agreement and the issue of the Placing Shares are conditional, inter alia, upon:

4.3.1      the passing of the Resolutions;

4.3.2      the compliance by the Company with all of its obligations under the Placing Agreement to the extent that they are required to be performed on or prior to Admission;

4.3.3      the Placing Agreement not having been terminated prior to Admission;

4.3.4      the Acquisition becoming unconditional in all respects (save for any condition relating to the Placing Agreement having become unconditional in accordance with its terms) and not having been terminated; and

4.3.5      Admission occurring by no later than 8.00 a.m. on 22 May 2018 (or such later time and date as the Company and Liberum may agree (being not later than 8.00 a.m. on the Long Stop Date)).

4.4              The Placing Agreement provides, amongst other things, for payment by the Company to Liberum of certain commissions and fees in connection with its appointment.

4.5              The Company will bear all other expenses of and incidental to the Placing, including the fees of the London Stock Exchange, printing costs, registrar's fees, all properly incurred legal and accounting fees of the Company and Liberum and any other taxes and duties payable.

4.6              The Placing Agreement contains customary warranties and indemnities from the Company in favour of Liberum.

4.7              Liberum may (after consultation with the Company) terminate the Placing Agreement prior to Admission in certain circumstances, including, amongst other things, if the Company is in breach of any of its obligations under the Placing Agreement (including the warranties contained in the Placing Agreement) or under the Acquisition Agreement; if the Acquisition Agreement is terminated; if there is a material adverse change in the financial position or prospects of the Group; or if there is a material adverse change in national or international financial, monetary, economic, political, environmental, or stock market conditions which (in the reasonable opinion of Liberum acting in good faith) is or will be or is likely to be materially prejudicial to the Group or to the Placing or Admission.

4.8              The Placing Price represents a premium of 1.23 per cent. to the Company's closing share price on 1 May 2018 (being the latest practicable date prior to this Announcement). The Placing Shares will represent approximately 19.68 per cent. of the enlarged issued share capital of the Company following the Placing and Completion and issue of the Consideration Shares.

4.9              Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM and it is anticipated that dealings in the Placing Shares will commence on AIM at 8.00 a.m. on 22 May 2018.

5                  Consideration Shares

5.1              In addition to the cash consideration (to be funded, inter alia, by the net proceeds of the Placing), the Company also intends to issue the Consideration Shares to the FIM Vendors in exchange for the purchase by the Company from the FIM Vendors pursuant to the Exchange Agreement of the Consideration Loan Notes to be issued to them by GHH in part payment of the consideration payable to them pursuant to the Acquisition. The Consideration Shares will represent approximately 12.86 per cent. of the enlarged issued share capital of the Company following the Placing and Completion and issue of the Consideration Shares.

5.2              Application will be made to the London Stock Exchange for the Consideration Shares to be admitted to trading on AIM and it is expected that the Consideration Shares will be admitted to trading on AIM at 8.00 a.m. on 22 May 2018.

5.3              The Consideration Shares (and any additional Ordinary Shares the FIM Vendors receive as a consequence of their holding of Consideration Shares) (together, the "Restricted Shares") will be subject to a "lock-in" period of 24 months from the date of Admission (the "Lock-In Period"), during which the FIM Vendors have agreed, subject to certain customary exceptions, that they will not dispose of any Restricted Shares without the Company's consent. During the Lock-In Period, any disposals of Restricted Shares must be conducted through Liberum Capital (or the Company's corporate broker at the relevant time).

6                  Current trading and prospects

6.1              FY2017 represented a year of predominantly organic growth for Gresham House with a 79 per cent. increase in assets under management to £649 million (FY2016: £363 million) and the milestone of operating profitability being achieved in the second half of the year, ahead of expectations. In addition:

6.1.1      asset management revenue increased by 85 per cent. to £6.5 million (FY 2016: £3.5 million);

6.1.2      adjusted operating loss reduced to £0.7 million (FY 2016: £2.4 million loss);

6.1.3      operating profitability was achieved in the second half of FY 2017;

6.1.4      organic growth of £200 million (a 55 per cent. rise during the course of the year) was achieved, including the launch of the British Strategic Investment Fund and growth was also achieved across other existing strategies;

6.1.5      acquisition growth of £86.0 million (up 24 per cent.), as a consequence of the acquisition of Hazel Capital, the renewable energy asset manager, in October 2017 was also achieved;

6.1.6      the Group completed the disposal of its legacy property portfolio following the year-end, fully repaying debt in September 2017, providing it with a strong balance sheet with tangible/realisable assets of £24.4 million as at 31 December 2017. As the only investments now held are in funds managed by the Group in its capacity as an asset manager it is fully aligned with the interests of its clients. The Company has also been advised that, as a result of the above, it now qualifies for 100 per cent. BPR for inheritance tax purposes under current English tax law; and

6.1.7      trading since the beginning of the year remains in line with market expectations with cash inflows from the completion of the sale of the Newton-le-Willows site (£2.0 million) in February 2018 and the scheduled repayment of £1.6 million from Persimmon Homes Limited in March 2018.

6.2              The Group continues to see institutional investors increasing their allocations to alternatives as they seek long-term investment returns as well as achieving environmental, social and governance objectives. In addition, asset valuations on almost all traditional metrics suggest that peak margins with high multiples are likely to lead to relatively low medium-term equity returns. Indeed, should bond yields rise significantly from this point, then the Directors expect volatility and a decrease in asset valuations more broadly. The Directors therefore consider that Gresham House is well-positioned for growth, as a specialist alternative asset manager with a strong net cash balance sheet (allowing further identified capital deployment to support growth), a high quality management team and long-term contracts in areas where the Directors believe that superior investment returns can be potentially generated.

6.3              The Directors remain focused on growing the business and building the Gresham House brand as an "asset to covet". The ability to deliver on this will be determined by AUM growth, both organically and through the successful integration of acquisitions. The Group now has an offering in the new energy and infrastructure-related markets (the former being further enhanced by virtue of the Acquisition), which are some of the fastest growing and most sought-after market segments in the alternatives sector.

7                  Long-term incentivisation

The Company does not currently have an annual long-term incentive plan under which to allocate share awards. Accordingly, the Company intends to introduce the Gresham House plc Performance Share Plan 2018 (the "Plan") to continue to generate Shareholder alignment and to reward performance. The Plan will, as with all the Company's share incentive plans, be subject to the oversight and governance of the Remuneration Committee. The Company remains committed to the principle of long term incentive plans being restricted to an overall dilution of no more than 20 per cent. whilst recognising the need to generate commitment and alignment with the interests of Shareholders amongst the Company's senior management.

 

8                  General Meeting

8.1              A notice convening the General Meeting of the Company to be held at the offices of the Company's solicitors, Eversheds Sutherland (International) LLP, One Wood Street, London EC2V 7WS and expected to be held on 21 May 2018 at 11.00 a.m. will be contained in the Circular to be posted to Shareholders in due course, at which the Resolutions will be proposed.

8.2              In order to proceed, the issue of the Consideration Shares to the FIM Vendors in connection with the Acquisition will require the approval by the requisite majority of Resolution 1 at the General Meeting ("Resolution 1"), which will grant the Directors authority to allot the Consideration Shares. Resolution 1 will be proposed as an ordinary resolution and will require a simple majority of Shareholders present, in person or by proxy, to vote in favour in order to be passed. This authority will be in addition to the authority granted at the annual general meeting of Gresham House held on 18 May 2017 and, unless previously revoked or varied, will expire at the next annual general meeting of Gresham House.

8.3              Resolution 2 ("Resolution 2"), which will be conditional on and subject to the passing of Resolution 1, will dis-apply statutory pre-emption rights and grant the Directors authority to allot the Consideration Shares for cash in connection with the Acquisition without first offering them to Shareholders pro rata to their holdings, will be proposed as a special resolution and will require a majority of at least 75 per cent. of those present, in person or by proxy, to vote in favour to be passed. This authority will also be in addition to the authority granted at the annual general meeting of Gresham House held on 18 May 2017 and, unless previously revoked or varied, will expire at the next annual general meeting of Gresham House.

8.4              This Resolution will be required because the consideration for the allotment of the Consideration Shares to the FIM Vendors by Gresham House will be the receipt of the Consideration Loan Notes from the FIM Vendors by Gresham House pursuant to the exercise of the option(s) set out in the Exchange Agreement. Pursuant to section 583 of the Act, an allotment of shares in consideration for receipt of loan notes constitutes an "allotment for cash" and, in the case of the allotment of the Consideration Shares, therefore requires statutory pre-emption rights to be dis-applied before it can be effected.

8.5              The Placing, the proceeds of which will be used, in part, to fund the initial cash consideration payable to the FIM Vendors in connection with the Acquisition, will require the approval of Resolutions 3 and 4 at the General Meeting.

8.6              Resolution 3 ("Resolution 3"), which will be conditional on and subject to the passing of Resolutions 1 and 2, and which will grant the Directors authority to allot the Placing Shares, will be proposed as an ordinary resolution and will require a simple majority of Shareholders present, in person or by proxy, to vote in favour in order to be passed. This authority, which will be in addition to the authority to be granted pursuant to Resolution 1, will also be in addition to the authority granted at the annual general meeting of Gresham House held on 18 May 2017 and, unless previously revoked or varied, will expire at the next annual general meeting of Gresham House.

8.7              Resolution 4 ("Resolution 4"), which will be conditional on and subject to the passing of Resolutions 1, 2 and 3, will dis-apply statutory pre-emption rights and grant the Directors authority to allot the Placing Shares for cash in connection with the Placing without first offering them to Shareholders pro rata to their holdings, will be proposed as a special resolution and will require a majority of at least 75 per cent. of those present, in person or by proxy, to vote in favour to be passed. This authority, which will be in addition to the authority to be granted pursuant to Resolution 2, will also be in addition to the authority granted at the annual general meeting of Gresham House held on 18 May 2017 and, unless previously revoked or varied, will expire at the next annual general meeting of Gresham House.

8.8              In the event that any of the Resolutions is not passed by the requisite majority, then neither the Placing nor the Acquisition will proceed.

9                  Indications of Support

9.1              The Company has received written and verbal indications of support to vote (or procure the vote) in favour of the Resolutions from Shareholders holding Ordinary Shares representing approximately 53 per cent. of the Company's issued ordinary share capital as at 1 May 2018, being the latest practicable date prior to the publication of this Announcement.

9.2              Together with the Ordinary Shares held by Directors and senior managers of the Company who have declared their intention to vote, or procure the vote in respect of, their own beneficial shareholdings, in favour of the Resolutions, as set out above, the total indications of support for the Resolutions received by the Company amount to approximately 58 per cent. of the Company's issued ordinary share capital as at 1 May 2018, being the latest practicable date prior to the publication of this Announcement.

 

DEFINITIONS

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

"Accelerated Book Build"	an accelerated book building process
"Act"	the Companies Act 2006, as amended from time to time
"Acquisition"	the acquisition of the entire issued share capital of FIM by GHH on the terms of, and subject to the conditions set out in, the Acquisition Agreement
"Acquisition Agreement"	the conditional acquisition agreement in respect of the Acquisition dated 2 May 2018 between (1) GHH, (2) Gresham House and (3) the FIM Vendors, further details of which are set out in paragraph 1 of this Announcement
"Admission"	admission of the Placing Shares and the Consideration Shares to trading on AIM, which, subject to and conditional upon, inter alia, the passing of the Resolutions, is expected to occur at 8.00 a.m. on 22 May 2018
"AIM"	AIM, a market operated by the London Stock Exchange
"AIM Rules" or "AIM Rules for Companies"	the AIM Rules for Companies published by the London Stock Exchange from time to time
"Appendix"	means the appendix to this Announcement
"AUM"	assets under management
"Board" or "Directors"	the directors of the Company
"certificated" or "in certificated form"	a share or other security not held in uncertificated form (i.e. not in CREST)
"Circular"	the circular to be published by the Company following the successful closure of the Accelerated Book Build, in order to convene the General Meeting to approve certain matters necessary to implement the Placing and the Acquisition
"Company" or "Gresham House"	Gresham House plc, a company registered in England and Wales with registered number 871
"Completion"	completion of the Acquisition Agreement in accordance with its terms
"Consideration Loan Notes"	the loan notes to be issued by GHH to the FIM Vendors in the aggregate amount of £9.8 million and which will be exchanged by the FIM Vendors for the Consideration Shares at Admission pursuant to the terms of the Exchange Agreement
"Consideration Shares"	the 2,390,244 new Ordinary Shares to be allotted and issued to the FIM Vendors in connection with the Acquisition in accordance with the Acquisition Agreement and the Exchange Agreement
"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 Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001/3755) as amended from time to time
"Disclosure Guidance and Transparency Rules"	(a)       the disclosure guidance made by the UKLA in accordance with section 73A(3) of Part VI of FSMA relating to the disclosure of information in respect of financial instruments (and, where the context requires, the disclosure rules made by the UKLA in accordance with section 73A(3) of Part VI of FSMA relating to the disclosure of information in respect of financial instruments which have been admitted to trading on a regulated market or for which a request for admission to trading on such market has been made); and (b)       the transparency rules made by the UKLA under section 73A(6) of Part VI of FSMA in relation to major shareholdings and the notification and dissemination of information by issuers of transferable securities (and, in each case, as that guidance and those rules may be amended from time to time)
"EU"	the European Union
"Exchange Agreement"	the agreement providing for the grant of options to exchange the Consideration Loan Notes for the Consideration Shares entered into between the FIM Vendors and the Company at Completion
"Existing Ordinary Shares"	the 12,540,649 Ordinary Shares in issue as at the date of this Announcement
"FIM"	FIM Services Limited, a company registered in England and Wales with registered number 01418579
"FIM Vendors"	the shareholders in FIM
"Financial Conduct Authority" or "FCA"	the Financial Conduct Authority of the United Kingdom
"FSMA"	the Financial Services and Markets Act 2000 (as amended, modified, consolidated, re-enacted or replaced from time to time)
"FY2016"	the financial year ended 31 December 2016
"FY2017"	the financial year ended 31 December 2017
"General Meeting"	the general meeting of the Company expected to be convened for 11.00 a.m. on 21 May 2018 at the offices of Eversheds Sutherland (International) LLP, One Wood Street, London EC2V 7WS, notice of which will be set out at the end of the Circular
"GHH"	Gresham House Holdings Limited, a company registered in England and Wales with registered number 09514560, and a wholly-owned subsidiary of the Company
"Group"	the Company and its subsidiary undertakings from time to time
"Liberum Capital"	Liberum Capital Limited, the Company's financial adviser, nominated adviser, broker and sole bookrunner
"London Stock Exchange"	London Stock Exchange plc
"Long Stop Date"	29 June 2018
"MAR"	the EU Market Abuse Regulation (2014/596/EU)
"New Ordinary Shares"	the Consideration Shares and the Placing Shares
"Notice" or "Notice of General Meeting"	the notice of General Meeting to be set out at the end of the Circular
"Official List"	the official list of the Financial Conduct Authority
"Ordinary Shares"	ordinary shares of 25 pence each in the share capital of the Company
"Placing"	the conditional placing by Liberum, as agent for the Company, of the Placing Shares pursuant to the terms, and subject to the conditions, set out in the Placing Agreement (including the Placing Price)
"Placing Agreement"	the conditional agreement dated 2 May 2018 between the Company and Liberum relating to the Placing
"Placing Shares"	the new Ordinary Shares to be allotted and issued to institutional and other investors in connection with the Placing
"Prospectus Rules"	the prospectus rules made by the FCA in the exercise of its function as competent authority pursuant to Part VI of the FSMA, as amended from time to time
"Remuneration Committee"	the remuneration committee of the Board
"Resolutions"	the resolutions to be proposed at the General Meeting and as will be set out in the Notice of General Meeting
"Restricted Jurisdictions"	any jurisdiction where the extension or availability of an offer of Ordinary Shares, or the accessing of the Circular, or its publication, distribution or other dissemination, would be prohibited by, or would breach, any applicable law or regulation
"Shareholders"	holders of Ordinary Shares from time to time
"subsidiary"	as defined in section 1159 and Schedule 6 of the Act
"subsidiary undertaking"	as defined in section 1162 and Schedule 6 of the Act
"UK" or "United Kingdom"	the United Kingdom of Great Britain and Northern Ireland
"UK Listing Authority" or "UKLA"	the FCA, acting in its capacity as United Kingdom listing authority
"uncertificated" or "in uncertificated form"	recorded on the register of members of the Company as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred by means of the CREST system
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland
"United States" or "US"	the United States of America, its territories and possessions, any state of the United States of America and the District of Columbia
"US Securities Act"	the United States Securities Act of 1933, as amended

Unless otherwise stated, all times referred to in this Announcement are references to the time in London.

All references to legislation in this Announcement are to the legislation of England and Wales unless the contrary is indicated. Any reference to any provision of any legislation shall include any amendment, modification, re-enactment or extension thereof.

Words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender.

For the purpose of this Announcement, ''subsidiary'', ''subsidiary undertaking'' and ''undertaking'' have the meanings respectively given to them by the Companies Act and ''associated undertaking'' has the meaning given to it by paragraph 19 of schedule 6 of the large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (but ignoring for this purpose sub- paragraph 1(b) thereof).

References to ''£'', ''sterling'', ''p'' and ''pence'' are to the lawful currency of the United Kingdom.

 

APPENDIX

TERMS AND CONDITIONS OF THE PLACING

THIS ANNOUNCEMENT, INCLUDING THIS APPENDIX (TOGETHER, THE "ANNOUNCEMENT") AND THE INFORMATION IN IT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, NEW zealand, CANADA, JAPAN, OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

IMPORTANT INFORMATION ON THE PLACING FOR INVITED PLACEES ONLY.

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 WHO ARE IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA AND ARE "QUALIFIED INVESTORS" AS DEFINED IN ARTICLE 2.1(E) OF THE EU PROSPECTUS DIRECTIVE (WHICH MEANS DIRECTIVE 2003/71/EC AND INCLUDES ANY RELEVANT IMPLEMENTING DIRECTIVE MEASURE IN ANY MEMBER STATE) (THE "PROSPECTUS DIRECTIVE"); AND (B) IN THE UNITED KINGDOM, PERSONS WHO ARE ALSO: (I) "INVESTMENT PROFESSIONALS" WITHIN THE MEANING OF ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE "ORDER"); (II) PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.") OF THE ORDER; OR (III) PERSONS TO WHOM IT MAY OTHERWISE BE LAWFULLY COMMUNICATED (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS APPENDIX AND THE TERMS AND CONDITIONS SET OUT HEREIN 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. THIS APPENDIX DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT IS NOT AN OFFER OF OR SOLICITATION TO PURCHASE OR SUBSCRIBE FOR SECURITIES IN THE UNITED STATES. THE SECURITIES REFERRED TO HEREIN HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES, EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM, OR AS PART OF A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. NO OFFERING OF SECURITIES IS BEING MADE IN THE UNITED STATES. NO MONEY, SECURITIES OR OTHER CONSIDERATION FROM ANY PERSON INSIDE THE UNITED STATES IS BEING SOLICITED AND, IF SENT IN RESPONSE TO THE INFORMATION CONTAINED IN THIS ANNOUNCEMENT, WILL NOT BE ACCEPTED.

EACH PLACEE SHOULD CONSULT WITH ITS OWN ADVISERS AS TO LEGAL, TAX, BUSINESS AND RELATED ASPECTS OF AN INVESTMENT IN PLACING SHARES.

Persons who are invited to and who choose to participate in the Placing, by making (or on whose behalf there is made) an oral or written offer to subscribe for Placing Shares (the "Placees"), will be deemed to have read and understood this Announcement, including this Appendix, in its entirety and to be making such offer on the terms and conditions, and to be providing the representations, warranties, acknowledgements, and undertakings contained in this Appendix. In particular each such Placee represents, warrants and acknowledges to the Company and Liberum Capital that:

1.      it is a Relevant Person (as defined above) and undertakes that it will acquire, hold, manage or dispose of any Placing Shares that are allocated to it for the purposes of its business;

2.      in the case of any Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, (i) the Placing Shares acquired by it in the Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors or in circumstances in which the prior consent of Liberum Capital has been given to the offer or resale; or (ii) where Placing Shares have been acquired by it on behalf of persons in any member state of the EEA other than Qualified Investors, the offer of those Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons;

3.      it is acquiring the Placing Shares in an "offshore transaction" as defined in and pursuant to Regulation S under the Securities Act; and

4.      it understands (or if acting for the account of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in this Appendix.

The Company and Liberum Capital will rely upon the truth and accuracy of the foregoing representations, acknowledgements and agreements.

This Announcement does not constitute an offer, and may not be used in connection with an offer, to sell or issue or the solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction in which such offer or solicitation is or may be unlawful. This Announcement and the information contained herein is not for publication or distribution, directly or indirectly, to persons in the United States, Australia, New Zealand, Canada, Japan or the Republic of South Africa or in any other jurisdiction in which such publication or distribution is unlawful. Persons into whose possession this Announcement may come are required by the Company to inform themselves about and to observe any restrictions of transfer of this Announcement. No public offer of securities of the Company is being made in the United Kingdom, the United States or elsewhere.

In particular, the Placing Shares referred to in this Announcement have not been and will not be registered under the Securities Act or any laws of or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, pledged or otherwise transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and the securities laws of any state or other jurisdiction of the United States. The Placing Shares are being offered and sold only outside the United States in accordance with Regulation S.

The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada; no prospectus has been lodged with or registered by the Australian Securities and Investments Commission or the Japanese Ministry of Finance or the South African Reserve Bank; and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, New Zealand, Canada, Japan or the Republic of South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, New Zealand, Canada, Japan or the Republic of South Africa or any other jurisdiction outside the United Kingdom.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this Appendix or the Announcement of which it forms part should seek appropriate advice before taking any action.

This Announcement should be read in its entirety.  In particular, you should read and understand the information provided in the "Important Information" section of this Announcement.

By participating in the Placing, each person who is invited to and who chooses to participate in the Placing will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix.

In this Appendix, unless the context otherwise requires, "Placee" means a Relevant Person (including individuals, funds or others) on whose behalf a commitment to subscribe for Placing Shares has been given.

Details of the Placing Agreement and the Placing Shares

Liberum Capital has entered into the Placing Agreement with the Company under which Liberum Capital has conditionally agreed on the terms and subject to the conditions set out therein, as agent for the Company, to use its reasonable endeavours to place the Placing Shares at the Placing Price with certain institutional investors. The Placing is not being underwritten by Liberum Capital or any other person.

The number of Placing Shares at the Placing Price will be determined following completion of the Accelerated Book Build as set out in this Announcement.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with the existing ordinary shares, including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of the existing ordinary shares after the date of issue of the Placing Shares.

Application for admission to trading

Application will be made for admission of the New Ordinary Shares to trading on AIM. It is expected that settlement of any such shares and Admission will become effective on or around 8.00 a.m. on 22 May 2018 and that dealings in the New Ordinary Shares will commence at that time. The exact number of shares to be admitted will be advised in a further announcement.

Accelerated Book Build

Liberum Capital will today commence an Accelerated Book Building process in respect to the Placing to determine demand for participation in the Placing by any Placees at the Placing Price. This Appendix gives details of the terms and conditions of, and the mechanics of participation in, the Accelerated Book Build. No commissions will be paid to Placees or by Placees in respect of any Placing Shares.

Liberum Capital and the Company shall be entitled to effect the Placing (in whole or in part) by such alternative method to the Accelerated Book Build as they may, in their sole discretion, determine.

Participation in, and principal terms of, the Placing

1.    Liberum Capital is acting as financial adviser, nominated adviser, broker and sole bookrunner to the Placing, as agent for and on behalf of the Company.  Liberum Capital is authorised and regulated by the Finical Conduct Authority (the "FCA"), is acting exclusively for the Company and no one else in connection with the matters referred to in this Announcement and will not be responsible to anyone other than the Company for providing the protections afforded to the customers of Liberum Capital or for providing advice in relation to the matters described in this Announcement. 

2.    Liberum Capital is arranging the Accelerated Book Build and Placing as an agent of the Company.

3.    Participation in the Accelerated Book Build will only be available to persons who may lawfully be, and are, invited to participate by Liberum Capital. Liberum Capital and its affiliates are entitled to enter bids in the Accelerated Book Build as principal.

4.    The Accelerated Book Build will establish the number of Placing Shares to be issued at the Placing Price, which will be agreed between Liberum Capital and the Company following completion of the Accelerated Book Build. The number of Placing Shares will be announced on a Regulatory Information Service following the completion of the Accelerated Book Build.

5.    To bid in the Accelerated Book Build, prospective Placees should communicate their bid by telephone to their usual sales contact at Liberum Capital. 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 Liberum Capital on the basis referred to paragraph 9 below.

6.    The Accelerated Book Build is expected to close no later than 4.00 p.m. (London) today but may be closed earlier or later at the discretion of Liberum Capital. Liberum Capital may, in agreement with the Company, accept bids that are received after the Accelerated Book Build has closed.

7.    Each Placee's allocation will be confirmed to Placees orally, or by email, by Liberum Capital whom they contact following the close of the Accelerated Book Build and a trade confirmation or contract note will be dispatched as soon as possible thereafter. A bookrunner's oral or emailed confirmation to such Placee will constitute an irrevocable legally binding commitment upon such person (who will at that point become a Placee) in favour of Liberum Capital and the Company, under which it agrees 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 (which are deemed to be incorporated in such trade confirmation or contract note) and in accordance with the Company's Articles of Association.

8.    The Company will make a further announcement following the close of the Accelerated Book Build detailing the number of Placing Shares to be issued at the Placing Price.

9.    Subject to paragraphs 5 and 6 above, Liberum Capital may choose to accept or reject bids, either in whole or in part, on the basis of allocations determined at its discretion (in consultation with the Company) and may scale down any bids for this purpose on such basis as they may determine. Liberum Capital may also, notwithstanding paragraphs 5 and 6 above, subject to the prior consent of the Company: (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 Accelerated Book Build has closed to any person submitting a bid after that time.

10.  A bid in the Accelerated Book Build will be made on the terms and subject to the conditions in this Announcement and will be legally binding on the Placee on behalf of which it is made and, except with the consent of Liberum Capital, will not be capable of variation or revocation after the time at which it is submitted. Each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to Liberum Capital, to pay to Liberum Capital (or as Liberum Capital may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Placing Shares for which such Placee has agreed to subscribe. Each Placee's obligations will be owed to Liberum Capital.

11.  Except as required by law or regulation, no press release or other announcement will be made by Liberum Capital or the Company using the name of any Placee (or its agent), in its capacity as Placee (or agent), other than with such Placee's prior written consent.

12.  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 at the same time, on the basis explained below under "Registration and Settlement".

13.  All obligations under the Accelerated Book Build 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 under "Right to terminate under the Placing Agreement".

14.  By participating in the Accelerated Book Build, 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.

15.  To the fullest extent permissible by law and the applicable rules of the FCA, neither Liberum Capital nor any of its affiliates shall have any liability to Placees (or to any other person whether acting on behalf of a Placee or otherwise whether or not a recipient of these terms and conditions) in respect of the Placing. Each Placee acknowledges and agrees that the Company is responsible for the allotment of the Placing Shares to the Placees and Liberum Capital shall have no liability to the Placees for the failure of the Company to fulfil those obligations. In particular, neither Liberum Capital nor any of its affiliates shall have any liability (including to the extent permissible by law, any fiduciary duties) in respect of Liberum Capital's conduct of the Accelerated Book Build or of such alternative method of effecting the Placing (in whole or in part) as Liberum Capital and the Company may agree.

Conditions to the Placing

Completion of the Placing is conditional on, inter alia:

a)    the Company having complied with its obligations under the Placing Agreement which Liberum has, in good faith, deemed material to the extent that such obligations fall to be performed prior to Admission;

b)    none of the warranties or undertakings in the Placing Agreement being untrue, inaccurate or misleading; and

c)    the Acquisition Agreement becoming unconditional in all respects (save for any condition relating to the Placing Agreement having become unconditional in accordance with its terms (including Admission)) and not having been terminated; and

d)    the approval by Shareholders at the General Meeting of the Resolutions and Admission becoming effective by no later than 8.00 a.m. on 22 May 2018 (or such later date as the Company and Liberum Capital may agree (being not later than 8.00 a.m. on the Long Stop Date)).

If: (i) any of the conditions contained in the Placing Agreement in relation to the Placing Shares are not fulfilled or waived by Liberum Capital by the respective time or date where specified (or such later time or date as the Company and Liberum Capital may agree, but not being later than 8.00 am on the Long Stop Date); (ii) any of such conditions becomes incapable of being fulfilled; or (iii) the Placing Agreement is terminated in its entirety in the circumstances specified below, the Placing will lapse and 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 against Liberum Capital in respect thereof.

Liberum Capital may, at its discretion and upon such terms as it thinks fit, waive, or extend the period for, compliance by the Company with the whole or any part of any of the Company's obligations in relation to the conditions in the Placing Agreement save that the above condition relating to Admission taking place may not be waived. Any such extension or waiver will not affect Placees' commitments as set out in this Announcement.

Neither Liberum Capital nor the Company 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 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 Liberum Capital.

Right to terminate under the Placing Agreement

Liberum Capital is entitled, at any time before Admission, to terminate its obligations under the Placing Agreement by giving notice to the Company in certain circumstances, including, inter alia:

a)    a breach of the warranties given by the Company in the Placing Agreement or under the Acquisition Agreement; or

b)    a breach by the Company of any of its obligations under the Placing Agreement which Liberum has, in good faith, deemed material or under the Acquisition Agreement; or

c)    in Liberum Capital's opinion, there having been a material adverse change in the financial position and/or prospects of the Group; or

d)    the occurrence of a force majeure event which, in the opinion of Liberum Capital, will or is likely to be prejudicial to the Group or the Placing.

Following Admission, the Placing Agreement is not capable of termination to the extent that it relates to the Placing of the Placing Shares. The rights and obligations of the Placees shall terminate only in the circumstances described in these terms and conditions and will not be subject to termination by the Placee or any prospective Placee at any time or in any circumstances. By participating in the Placing, Placees agree that the exercise by Liberum Capital of any right of termination or other discretion under the Placing Agreement shall be within the absolute discretion of Liberum Capital, and that it need not make any reference to Placees and that it shall have no liability to Placees whatsoever in connection with any such exercise.

No Prospectus

The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require a prospectus in the United Kingdom or in any other jurisdiction. No offering document, admission document or prospectus has been or will be submitted to be approved by the FCA in relation to the Placing, and any Placees' commitments will be made solely on the basis of the information contained in the Announcement (including this Appendix) and the Exchange Information (as defined further below).

Each Placee, by accepting a participation in the Placing, agrees that the content of this Announcement is exclusively the responsibility of the Company and confirms that it has neither received nor relied on any other information (other than the Exchange Information), representation, warranty, or statement made by or on behalf of the Company or Liberum Capital or any other person and neither Liberum Capital nor the Company nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received and, if given or made, such information, representation, warranty or statement must not be relied upon as having been authorised by any of Liberum Capital, the Company, or their respective officers, directors, employees or agents.

Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Neither the Company nor Liberum Capital is making any undertaking or warranty to any Placee regarding the legality of an investment in the Placing Shares by such Placee under any legal, investment or similar laws or regulations. No Placee should consider any information in this Announcement to be legal, tax or business advice. Each Placee should consult its own solicitor, tax adviser and financial adviser for independent legal, tax and financial advice regarding an investment in the Placing Shares. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.

Registration and Settlement

Settlement of transactions in the Placing Shares (ISIN: GB0003887287) following Admission will take place within the system administered by Euroclear UK & Ireland Limited ("CREST") provided that, subject to certain exceptions, Liberum Capital reserves the right to require settlement for, and delivery of, the Placing Shares (or a portion thereof) to Placees by such other means that they deem necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this Announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction.

Following the close of the Accelerated Book Build, each Placee allocated Placing Shares in the Placing will be sent a trade confirmation or contract note in accordance with the standing arrangements in place with Liberum Capital, stating the number of Placing Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to Liberum Capital (in GBP) and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the standing CREST or certificated settlement instructions that it has in place with Liberum Capital.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two (2) percentage points above LIBOR as determined by Liberum Capital.

Each Placee is deemed to agree that, if it does not comply with these obligations, Liberum Capital may sell any or all of the Placing Shares allocated to that Placee on such Placee's behalf and retain from the proceeds, for Liberum Capital's account and benefit (as agent for the Company), an amount equal to the aggregate amount owed by the Placee plus any interest due. The relevant Placee will, however, remain liable for any shortfall below the aggregate amount owed by it and may be required to bear any stamp duty or stamp duty reserve tax or securities transfer tax (together with any interest or penalties) which may arise upon the sale of such Placing Shares on such Placee's behalf. By communicating a bid for Placing Shares, each Placee confers on Liberum Capital all such authorities and powers necessary to carry out any such sale and agrees to ratify and confirm all actions which Liberum Capital lawfully takes in pursuance of such sale.

If Placing Shares are to be delivered to a custodian or settlement agent, Placees should ensure that the trade confirmation or contract note is copied and delivered immediately to the relevant person within that organisation.

Insofar as Placing Shares are registered in a Placee's name or that of its nominee or in the name of any person for whom a Placee is contracting as agent or that of a nominee for such person, such Placing Shares should, subject as provided below, be so registered free from any liability to UK stamp duty or stamp duty reserve tax or securities transfer tax. Placees will not be entitled to receive any fee or commission in connection with the Placing.

Representations, Warranties and Further Terms

By participating in the Placing each Placee (and any person acting on such Placee's behalf) makes the following representations, warranties, acknowledgements, agreements and undertakings (as the case may be) to the Company and Liberum Capital:

1.    it represents and warrants that it has read and understood this Announcement, including the Appendix, in its entirety and that its subscription for Placing Shares is subject to and based upon all the terms, conditions, representations, warranties, acknowledgements, agreements and undertakings and other information contained herein and undertakes not to redistribute or duplicate this Announcement;

2.    it acknowledges that no offering document, admission document or prospectus has been prepared in connection with the Placing and represents and warrants that it has not received and will not receive a prospectus, admission document or other offering document in connection therewith;

3.    it acknowledges that the existing ordinary shares are admitted to trading on AIM, and the Company is therefore required to publish certain business and financial information in accordance with the AIM Rules and the Market Abuse Regulation (EU Regulation 596/2014) ("MAR") (collectively "Exchange Information");

4.    it acknowledges that none of Liberum Capital, the Company, any of their respective affiliates or any person acting on behalf of any of them has provided, and will not provide it, with any material regarding the Placing Shares or the Company other than this Announcement; nor has it requested any of Liberum Capital, the Company, any of their respective affiliates or any person acting on behalf of any of them to provide it with any such information;

5.    it acknowledges that the content of this Announcement is exclusively the responsibility of the Company, and that none of Liberum Capital, their respective affiliates or any person acting on behalf of any of them has or shall have any liability for any information, representation or statement contained in this Announcement or any information previously or concurrently published by or on behalf of the Company, and will not be liable for any Placee's decision to participate in the Placing based on any information, representation or statement contained in this Announcement or otherwise. Each Placee further represents, warrants and agrees that the only information on which it is entitled to rely and on which such Placee has relied in committing itself to acquire the Placing Shares is contained in this Announcement and any Exchange Information, such information being all that it deems necessary to make an investment decision in respect of the Placing Shares and that it has neither received nor relied on any other information given or representations, warranties or statements made by any of Liberum Capital or the Company, or, if received, it has not relied upon any such information, representations, warranties or statements (including any management presentation that may have been received by any prospective Placee) and neither Liberum Capital nor the Company will be liable for any Placee's decision to accept an invitation to participate in the Placing based on any other information, representation, warranty or statement. Each Placee further acknowledges and agrees that it has relied solely on its own investigation of the business, financial or other position of the Company in deciding to participate in the Placing and it will not rely on any investigation that Liberum Capital, its affiliates or any person acting on behalf of any of them has or may have conducted;

6.    it represents and warrants that it has neither received nor relied on any unpublished price sensitive information concerning the Company in accepting this invitation to participate in the Placing;

7.    it acknowledges that none of Liberum Capital, its affiliates or any person acting on behalf of any of them has or shall have any liability for the Exchange Information, any publicly available or filed information or any representation relating to the Company, provided that nothing in this paragraph excludes the liability of any person for fraudulent misrepresentation made by that person;

8.    it represents and warrants that it is acquiring the Placing Shares in an "offshore transaction" as defined in and pursuant Regulation S under the Securities Act;

9.    it acknowledges that it is acquiring the Placing Shares for its own account or for one or more accounts for which, in each case, it exercises sole investment discretion, for investment purposes and not with a view to any distribution or for resale in connection with, the distribution thereof in whole or in part, in the United States and that it has full power to make the acknowledgements, representations and agreements herein on behalf of each such account;

10.  it acknowledges that the Placing Shares have not been and will not be registered under the Securities Act or with any state or other jurisdiction of the United States, nor approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other United States regulatory authority, and agrees not to reoffer, resell, pledge or otherwise transfer the Placing Shares except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act;

11.  unless otherwise specifically agreed in writing with Liberum Capital, it represents and warrants that neither it nor the beneficial owner of such Placing Shares will be a resident of the United States, Australia, New Zealand, Canada, Japan or the Republic of South Africa;

12.  it acknowledges that the Placing Shares have not been and will not be registered under the securities legislation of the United States, Australia, New Zealand, Canada, Japan or the Republic of South Africa and, subject to certain exceptions, may not be offered, sold, taken up, renounced or delivered or transferred, directly or indirectly, within those jurisdictions;

13.  it represents and warrants that the issue to it, or the person specified by it for registration as holder, of Placing Shares will not give rise to a liability under any of sections 67, 70, 93 or 96 of the Finance Act 1986 (depositary receipts and clearance services) and that the Placing Shares are not being acquired in connection with arrangements to issue depositary receipts or to transfer Placing Shares into a clearance system;

14.  it represents and warrants that: (i) it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000 (as amended), the Terrorism Act 2006 and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 and (ii) it is not a person: (a) with whom transactions are prohibited under the Foreign Corrupt Practices Act of 1977 or any economic sanction programmes administered by, or regulations promulgated by, the Office of Foreign Assets Control of the U.S. Department of the Treasury; (b) named on the Consolidated List of Financial Sanctions Targets maintained by HM Treasury of the United Kingdom; or (c) subject to financial sanctions imposed pursuant to a regulation of the European Union or a regulation adopted by the United Nations (together, the "Regulations"); and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and, if making payment on behalf of a third party, that satisfactory evidence has been obtained and recorded by it to verify the identity of the third party as required by the Regulations and has obtained all governmental and other consents (if any) which may be required for the purpose of, or as a consequence of, such purchase, and it will provide promptly to Liberum Capital such evidence, if any, as to the identity or location or legal status of any person which Liberum Capital may request from it in connection with the Placing (for the purpose of complying with such Regulations or ascertaining the nationality of any person or the jurisdiction(s) to which any person is subject or otherwise) in the form and manner requested by Liberum Capital on the basis that any failure by it to do so may result in the number of Placing Shares that are to be purchased by it or at its direction pursuant to the Placing being reduced to such number, or to nil, as Liberum Capital may decide at its sole discretion;

15.  it represents and warrants that, to the extent it has received any inside information (for the purposes of MAR) and section 56 of the Criminal Justice Act 1993) in relation to the Company and its securities, it has not: (a) dealt (or attempted to deal) in the securities of the Company; (b) encouraged, recommended or induced another person to deal in the securities of the Company; or (c) unlawfully disclosed inside information to any person, prior to the information being made publicly available;

16.  if a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive, it represents and warrants that the Placing Shares purchased by it in the Placing will not be acquired on a non-discretionary basis on behalf of, nor will they be acquired with a view to their offer or resale to, persons in a Member State of the European Economic Area which has implemented the Prospectus Directive other than Qualified Investors, or in circumstances in which the prior consent of Liberum Capital has been given to the offer or resale;

17.  it represents and warrants that it will not make any offer to the public of the Placing Shares and has not offered or sold and will not offer or sell any Placing Shares to persons in the United Kingdom or elsewhere in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in the United Kingdom within the meaning of section 85(1) of the FSMA or an offer to the public in any EEA State within the meaning of the Prospectus Directive (which includes any relevant implementing measure in any EEA State);

18.  it represents and warrants that it has not offered or sold and will not offer or sell any Placing Shares to persons in the European Economic Area prior to Admission except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted in and which will not result in an offer to the public in any member state of the European Economic Area within the meaning of the Prospectus Directive;

19.  it represents and warrants that it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) relating to the Placing Shares in circumstances which do not require the approval of the communication by an authorised person under section 21(1) of the FSMA;

20.  it represents and warrants that it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Placing Shares in, from or otherwise involving, the United Kingdom;

21.  if in a Member State of the European Economic Area, unless otherwise specifically agreed with Liberum Capital in writing, it represents and warrants that it is a Qualified Investor within the meaning of the Prospectus Directive;

22.  if in the United Kingdom, it represents and warrants that it is a Qualified Investor within the meaning of the Prospectus Directive and is also a person: (i) who is an investment professional within the meaning of Article 19(5) of the Order; (ii) who falls within Article 49(2)(A) to (D) ("High Net Worth Companies, Unincorporated Associations, etc.") of the Order; or (iii) to whom this Announcement may otherwise be lawfully communicated;

23.  it represents and warrants that it and any person acting on its behalf is entitled to acquire the Placing Shares under the laws of all relevant jurisdictions and that it has all necessary capacity and has obtained all necessary consents and authorities and taken any other necessary actions to enable it to commit to this participation in the Placing and to perform its obligations in relation thereto (including, without limitation, in the case of any person on whose behalf it is acting, all necessary consents and authorities to agree to the terms set out or referred to in this Announcement) and will honour such obligations;

24.  where it is acquiring Placing Shares for one or more managed accounts, it represents and warrants that it is authorised in writing by each managed account: (a) to acquire the Placing Shares for each managed account; (b) to make on its behalf the representations, warranties, acknowledgements, undertakings and agreements in this Appendix and the Announcement of which it forms part; and (c) to receive on its behalf any investment letter relating to the Placing in the form provided to you by Liberum Capital;

25.  it undertakes that it (and any person acting on its behalf) will make payment for the Placing Shares allocated to it in accordance with this Announcement on the due time and date set out herein, failing which the relevant Placing Shares may be placed with other subscribers or sold as Liberum Capital may in its sole discretion determine and without liability to such Placee and it will remain liable for any shortfall below the net proceeds of such sale and the placing proceeds of such Placing Shares and may be required to bear the liability for any stamp duty or stamp duty reserve tax or security transfer tax (together with any interest or penalties due pursuant to or referred to in these terms and conditions) which may arise upon the placing or sale of such Placee's Placing Shares on its behalf;

26.  it acknowledges that none of Liberum Capital, its affiliates, or any person acting on behalf of any of them, is making any recommendations to it, advising it regarding the suitability of any transactions it may enter into in connection with the Placing and that participation in the Placing is on the basis that it is not and will not be treated for these purposes as a client of Liberum Capital and that Liberum Capital has no duties or responsibilities to it for providing the protections afforded to its clients or customers or for providing advice in relation to the Placing nor in respect of any representations, warranties, undertakings or indemnities contained in the Placing Agreement nor for the exercise or performance of any of its rights and obligations thereunder including any rights to waive or vary any conditions or exercise any termination right;

27.  it undertakes that the person whom it specifies for registration as the holder of the Placing Shares will be (i) itself or (ii) its nominee, as the case may be. Neither Liberum Capital nor the Company will be responsible for any liability to stamp duty or stamp duty reserve tax resulting from a failure to observe this requirement. Each Placee and any person acting on behalf of such Placee agrees to participate in the Placing and it agrees to indemnify the Company, Liberum Capital in respect of the same on the basis that the Placing Shares will be allotted to the CREST stock account of Liberum Capital who will hold them as nominee on behalf of such Placee until settlement in accordance with its standing settlement instructions;

28.  it acknowledges that these terms and conditions and any agreements entered into by it pursuant to these terms and conditions shall be governed by and construed in accordance with the laws of England and Wales and it submits (on behalf of itself and on behalf of any person on whose behalf it is acting) to the exclusive jurisdiction of the English courts as regards any claim, dispute or matter arising out of any such contract, except that enforcement proceedings in respect of the obligation to make payment for the Placing Shares (together with any interest chargeable thereon) may be taken by the Company or Liberum Capital in any jurisdiction in which the relevant Placee is incorporated or in which any of its securities have a quotation on a recognised stock exchange;

29.  it acknowledges that time shall be of the essence as regards to obligations pursuant to this Appendix to the Announcement;

30.  it agrees it will be bound by the terms of the Company's Articles of Association;

31.  it agrees that the Company, Liberum Capital, and their respective affiliates and others will rely upon the truth and accuracy of the foregoing representations, warranties, acknowledgements and undertakings which are given to Liberum Capital on their own behalf and on behalf of the Company and are irrevocable and are irrevocably authorised to produce this Announcement or a copy thereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby;

32.  it agrees to indemnify on an after-tax basis and hold the Company, Liberum Capital and their respective affiliates harmless from any and all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the representations, warranties, acknowledgements, agreements and undertakings in this Appendix and further agrees that the provisions of this Appendix shall survive after completion of the Placing;

33.  it acknowledges that no action has been or will be taken by any of the Company, Liberum Capital or any person acting on behalf of the Company or Liberum Capital that would, or is intended to, permit a public offer of the Placing Shares in any country or jurisdiction where any such action for that purpose is required;

34.  it acknowledges that it is an institution 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. It further acknowledges that it is experienced in investing in securities of this nature 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; and

35.  it acknowledges that its commitment to subscribe for Placing Shares on the terms set out herein and in the trade confirmation or contract note will continue notwithstanding any amendment that may in future be made to the terms of the Placing and that Placees will have no right to be consulted or require that their consent be obtained with respect to the Company's conduct of the Placing.

The representations, warranties, acknowledgments and undertakings contained in this Appendix are given to Liberum Capital for itself and on behalf of the Company and are irrevocable.

The agreement to settle a Placee's subscription (and/or the subscription of a person for whom such Placee is contracting as agent) free of stamp duty and stamp duty reserve tax depends on the settlement relating only to a subscription by it and/or such person direct from the Company for the Placing Shares in question. Such agreement assumes that the Placing Shares are not being subscribed for in connection with arrangements to issue depositary receipts or to transfer the Placing Shares into a clearance service. If there are any such arrangements, or the settlement relates to any other subsequent dealing in the Placing Shares, stamp duty or stamp duty reserve tax may be payable, for which neither the Company nor Liberum Capital will be responsible, and the Placee to whom (or on behalf of whom, or in respect of the person for whom it is participating in the Placing as an agent or nominee) the allocation, allotment, issue or delivery of Placing Shares has given rise to such UK stamp duty or stamp duty reserve tax undertakes to pay such UK stamp duty or stamp duty reserve tax forthwith and to indemnify on an after-tax basis and to hold harmless the Company and Liberum Capital in the event that any of the Company and/or Liberum Capital has incurred any such liability to UK stamp duty or stamp duty reserve tax. If this is the case, each Placee should seek its own advice and notify Liberum Capital accordingly.

In addition, Placees should note that they will be liable for any stamp duty and all other stamp, issue, securities, transfer, registration, documentary or other duties or taxes (including any interest, fines or penalties relating thereto) payable outside the UK by them or any other person on the subscription by them of any Placing Shares or the agreement by them to subscribe for any Placing Shares.

Each Placee, and any person acting on behalf of the Placee, acknowledges that Liberum Capital does not owe any fiduciary or other duties to any Placee in respect of any representations, warranties, undertakings or indemnities in the Placing Agreement.

Each Placee and any person acting on behalf of the Placee acknowledges and agrees that Liberum Capital or any of its affiliates may, at their absolute discretion, agree to become a Placee in respect of some or all of the Placing Shares.

When a Placee or person acting on behalf of the Placee is dealing with Liberum Capital, any money held in an account with Liberum Capital on behalf of the Placee and/or any person acting on behalf of the Placee will not be treated as client money within the meaning of the rules and regulations of the FCA made under the FSMA. The Placee acknowledges that the money will not be subject to the protections conferred by the client money rules; as a consequence, this money will not be segregated from Liberum Capital's money in accordance with the client money rules and will be used by Liberum Capital in the course of their own business and the Placee will rank only as a general creditor of Liberum Capital.

All times and dates in this Announcement may be subject to amendment. Liberum Capital shall notify the Placees and any person acting on behalf of the Placees of any changes.

No statement in this Announcement is intended to be a profit forecast, and no statement in this 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 price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares.  Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser.

The Placing Shares to be issued or sold pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange.

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, this Announcement.

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