Placing, board changes and change of name
11 May, 2015
Shellshock Limited
Placing of new ordinary shares raising £5.2m, proposed board changes and change of name to Marlowe Holdings Limited
Shellshock Limited (AIM: SHOK) ("Shellshock" or the "Company") today announces the successful placing of 8.6 million new ordinary shares at 60 pence per share (the "Placing").
Summary
· The Placing has increased the Company's cash deposits by £5.2m to £8.3m which will be used for investment opportunities
· The Company will focus on generating shareholder value through targeted acquisitions in the business services sector
· A new Board has been proposed with a track record in value creation
· The Company has the backing and support of Lord Ashcroft KCMG PC
· The Company has changed its name to Marlowe Holdings Limited (AIM ticker: MRL)
Investment Strategy
The Company, in line with its existing investment policy, will focus its search for investment targets within the business services sector in areas where:
· there is sufficient opportunity to acquire both controlling stakes in unquoted businesses and possible carve-outs of non-core subsidiaries of larger businesses;
· businesses possess annuity-type recurring revenues, typically with long term contracts, low capital intensity and a degree of operational complexity that may provide attractive margins and high barriers to entry;
· the markets are fragmented and the potential exists for swiftly executed consolidation with acquisitions, including businesses that private equity might consider too small, providing opportunities for operational improvements and economies of scale.
Board Changes
The Company also announces proposed changes to the Board which will take effect the day after the commencement of trading of the shares to be allotted pursuant to the placing which is expected to take place on or around 14 May 2015.
Alex Dacre, Chief Executive, has a background in the quoted business-to-business services sector and an expertise in executing buy-and-build growth strategies. Most recently he directed Impellam Group plc's ("Impellam") corporate development activities, completing a number of significant acquisitions including the transformational £73m acquisition of Lorien Resourcing, a UK market leader in technology recruitment with £350m in revenues. During an 18 month period of acquisitions, Impellam saw its market capitalisation more than double to over £400m today and it became the UK's second largest temporary staffing business. Prior to this, he worked with Charles Skinner to turn around AIM-listed Restore plc into one of the UK's leading office services companies and a leading consolidator in the document management and commercial relocation sectors.
Derek O'Neill, Finance Director, was Chief Executive and a majority shareholder of Lorien Resourcing, a £350m revenue market leader in technology recruitment, until its recent sale to Impellam Group plc. He has previously been on the Board of two listed companies including Deltron Electronics plc. He spent 12 years as an executive director of a number of private equity backed businesses and also as an executive director in a diverse range of sectors, including house building, electronics, engineering, telecommunications, logistics and recruitment. He is currently a non-executive director of Impellam.
Charles Skinner, Non-Executive Director, is Chief Executive of Restore plc, the AIM-listed provider of office services. Under his leadership its market capitalisation has grown from £1m to over £200m today. He was previously Chief Executive of Johnson Services Group plc and Brandon Hire plc, prior to which he was at SG Warburg, 3i plc and was Editor of Management Today. Charles has 16 years' experience as Chief Executive of quoted companies, all operating in the business to business service sector.
Peter Gaze will continue as a Non-Executive Director, a role he has held since 2006. He is also the Chief Financial Officer and a Director of BCB Holdings Limited and of Waterloo Investment Holdings Limited.
The new Board will not be receiving any remuneration until such time as the first acquisition is undertaken by the Company. It is proposed that Philip Johnson and Philip Osborne will step down from the Board at the same time as the new appointments take effect.
Details of the Placing and use of Proceeds
The Company has received firm commitments from new and existing investors to subscribe for an aggregate of 8,584,998 new ordinary shares of 50p each ("The Placing Shares") at a price of 60p per share (the "Placing Price").These commitments are conditional on admission of the Placing Shares to Trading on AIM. Application has been made for the Placing Shares to be admitted to trading on AIM ("Admission") and it is expected that Admission will occur on or around 14 May 2015. The Placing Shares will, upon issue, rank pari passu in all respects with the existing issued ordinary shares. Following Admission, the Company will have 14,584,998 ordinary shares of 50p each admitted to trading on AIM ('Enlarged Share Capital'). No shares are held in treasury and so the above figure (14,584,998) may be used by shareholders as denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the Financial Conduct Authority's Disclosure and Transparency Rules.
The Placing Price represents a 15.4% premium to the net asset value per share of 52 pence at September 30, 2014 and a discount of 37.5% to the Company's closing mid-market price of 82.5p on 8 May 2015, being the latest practicable date prior to this announcement. The Placing has raised £5.2 million, prior to expenses, to provide capital for future investments. The Placing was oversubscribed.
The Company has the support of Lord Ashcroft KCMG PC both as the existing principal shareholder and as a significant investor in the Placing. Lord Ashcroft has subscribed for 3,333,333 Placing Shares at the Placing Price, conditional on Admission. Following Admission Lord Ashcroft will hold 7,813,933 ordinary shares in the Company, representing 53.6% of the Enlarged Share Capital.
Alex Dacre, Chief Executive, has subscribed for 3,333,333 Placing Shares at the Placing Price, conditional on Admission. Following Admission, Alex will hold 3,333,333 ordinary shares in the Company, representing 22.9% of the Enlarged Share Capital.
Derek O'Neill, Charles Skinner and Peter Gaze have subscribed for 416,667, 333,333 and 160,000 Placing Shares respectively at the Placing Price, conditional on Admission. Following Admission Derek O'Neill will hold approximately 2.9%, Charles Skinner will hold 2.3% and Peter Gaze will hold 1.5% of the Enlarged Share Capital.
Philip Osborne and Philip Johnson, who will be stepping down from the Board following Admission, have subscribed for 75,000 and 250,000 Placing Shares respectively at the Placing Price, conditional on Admission. Following Admission Philip Osborne will hold approximately 0.7% and Philip Johnson will hold 1.9% of the Enlarged Share Capital.
Following the Placing, the Company will have approximately £8.3 million in funds available for investment.
An acquisition by the Company in future may constitute a reverse takeover under the AIM Rules, which would require the approval of the Company's shareholders. It should be noted that, owing to his controlling shareholding, Lord Ashcroft could determine the outcome of any such process.
Related Party Transactions
The conditional agreements entered into by Lord Ashcroft, Alex Dacre, Derek O'Neill, Charles Skinner, Peter Gaze, Philip Osborne and Philip Johnson to subscribe for Placing Shares are classified as related party transactions for the purposes of the AIM Rules. In the absence of an independent director, Cenkos Securities plc, the Company's Nominated Adviser, considers that the terms of the transaction are fair and reasonable insofar as the Company's shareholders are concerned.
Financial Performance
The audited financial statements of the Company for the year ended 31 March 2014 were published on 30 September 2014 and the interim statement for the six months ended 30 September 2014 was published on 30 December 2014. Both are available on the Company's web site. On 30 September 2014 the net assets of the Company amounted to £3.1 million, or £0.52 per share. There has been no material change in the financial condition of the Company from 30 September 2014 up to the point of the Placing.
Change of name to Marlowe Holdings Limited
The Company is changing its name to Marlowe Holdings Limited which is expected to become effective by 15 May 2015, following approval by the relevant authorities. The directors believe that the new name is more suited to the Company's investing policy. The Company's new EPIC will be MRL. A further announcement will be made in due course once the change of name is effective. The Company's ISIN remains unchanged.
Change of Website
The Company plans to change its website. The new website, which will contain all information required in accordance with AIM Rule 26, will be found at www.marloweplc.com. A further announcement will be made in due course once the new website is live, until which point information can be found at www.shellshocklimited.com.
Enquires and further information
Marlowe Holdings Limited
Alex Dacre IR@marloweplc.com
Cenkos Securities
Nicholas Wells +44 207 397 8922
Further information pursuant to Schedule 2, paragraph (g) of the AIM Rules for Companies:
Derek O'Neill, aged 52, is currently or has previously been a director of the following companies in the last 5 years:
Impellam Group plc
Lorien Limited*
Lorien Engineering Solutions Limited*
Trio Square Limited
Oakley Lorien Limited
Signature Quality Refurbished Homes Limited
*indicates no longer a director
Mr. O'Neill was a Director of New World Payphones Limited when it was placed into Administration in 2002.
Charles Anthony Lawrence Skinner, aged 54, is currently or has previously been a director or partner of the following companies or partnerships in the last 5 years:
Restore plc
Document Control Services Limited
Stapledon Holdings Limited
Wansdyke Security Limited
London Tool Hire Limited
Sargents Trading Limited
Edge Equipment Hire limited
Restore Shred Limited
Harrow Green Limited
Relocom Limited
South Coast Tool Hire Limited
File and Data Storage Limited
It Efficient Limited
Magnum Docstore Limited
Magnum Secure Limited
Filebase Ltd
Papersafe UK Limited
Keymorr Imaging Services Limited
Preview Services (UK) Ltd
Restore Scan Limited
Peter Cox Limited*
HS123 Limited*
*indicates no longer a director
Alexander Peter Dacre, aged 27, is currently a director of Canaird River Company Limited.
Save as disclosed above, there is no further information required to be disclosed in accordance with Schedule 2, paragraph (g) of the AIM Rules.
This information is provided by RNS
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