Amendment to Enables IT Disposal Agreement
1Spatial plc (AIM: SPA)
("1Spatial", the "Company" or the "Group")
Amendment to Enables IT Disposal Agreement
1Spatial, the global geospatial software and solutions company, announces that it has entered into an agreement (the "Amendment Agreement") to amend the terms of the share purchase agreement dated 14 March 2018 (the "SPA") relating to the disposal by 1Spatial of 80.1 per cent. of the issued share capital of Enables IT Group Limited ("Enables") to Champall Consultancy Limited ("Champall") (an entity owned and controlled by Michael Walliss, the managing director of Enables, and his wife, Erica Walliss) (the "Disposal").
Under the original terms of the SPA, Champall was granted an option (the "Option") to acquire 1Spatial's remaining 19.9 per cent. interest in Enables for an exercise price of £100,000 (the "Call Option Price"). Pursuant to the terms of the Amendment Agreement, the Call Option Price has been reduced to £20,000 and it will become payable on the earlier of: (i) the final business day of January 2020; (ii) the sale by Champall of all or part of its holding in Enables; and (iii) the disposal of all or a substantial part of the business or assets of Enables or its subsidiary, Enables IT Limited (the "Subsidiary").
Furthermore, subject to the Subsidiary achieving an EBITDA margin of not less than 10 per cent. for the financial year ending 30 June 2020 (the "2020 Financial Year"), Champall will make an additional one-off payment to 1Spatial being equal to 15 per cent. of the Subsidiary's EBITDA figure for the 2020 Financial Year. This one-off payment will be paid within 30 business days of the date of publication of the Subsidiary's accounts for the 2020 Financial Year. In addition, under the terms of the Amendment Agreement, Champall has released 1Spatial from any claims that Champall may have against 1Spatial under the tax covenant and warranties in the SPA. Finally, the Subsidiary has provided 1Spatial with an indemnity for any loss that it may suffer as a result of the statutory guarantees in respect of audit exemptions provided by 1Spatial to: (a) Enables in relation to audit exemptions in respect of its annual accounts for the 2016 and 2017 financial years and (b) the Subsidiary in relation to an audit exemption in respect of its annual accounts for the 2016 financial year.
The amendments reflected in the terms of the Amendment Agreement will take effect subject to a bona fide arm's length third party investor completing an investment of at least £100,000 in Enables (the "Investment"). It is expected that Champall will exercise the Option immediately following completion of the Investment.
As Michael Walliss has been a director of a subsidiary of the Group within the past 12 months, entry into the Amendment Agreement constitutes a related party transaction for the purpose of AIM Rule 13. The Directors consider, having consulted with the Company's nominated adviser, N+1 Singer, that the terms of the transaction are fair and reasonable insofar as the shareholders are concerned.
Claire Milverton, CEO of 1Spatial commented:
"In line with our strategy, the disposal allows us to fully focus on our core Global Geospatial business whilst removing future potential liabilities. 1Spatial remains well positioned to deliver against its strategy of selling innovative spatial solutions to our customers across our three key sectors."
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For further information, please contact:
1Spatial plc 01223 420 414
Andrew Roberts / Claire Milverton
N+1 Singer 020 7496 3000
Shaun Dobson / Lauren Kettle (Corporate Finance)
Tom Salvesen (Corporate Broking)
FTI Consulting LLP 020 3727 1000
Dwight Burden / Alex Le May
LEI Code: 213800VG7OZYQES6PN67
About 1Spatial
1Spatial is a software solutions provider and global leader in managing geospatial data. We work with our clients to deliver real value by making data current, complete and consistent through the use of automated processes - ensuring that decisions are always based on the highest quality information available.
Our unique, rules-based approach delivers enterprise-scale, cross-platform, automation to all stages of the data lifecycle. It builds confidence in the data while reducing the time and cost of stewardship. Our global clients include national mapping and land management agencies, utilities, transportation organisations, government departments, emergency services, defence and census bureaus.
A leader in our field, we have a wealth of experience and a record of continual innovation and development. We partner with some of the leading technology vendors including, Esri and Oracle.
For more information visit www.1spatial.com
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