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Woodspeen Training Plc (WSTP)

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Friday 18 April, 2008

Woodspeen Training Plc

Acquisition Fresh Application Recommencement Tr...



On 16 April 2008 Woodspeen Training plc ("Woodspeen" or the "Company")
announced that it had conditionally agreed to acquire the entire issued share
capital of Futures Training Centres Limited ("Futures").

Under the PLUS Rules the acquisition of Futures (the "Acquisition") is deemed
to be a reverse takeover and as a consequence the Company's issued ordinary
shares were suspended from trading on the PLUS-quoted market on that date
pending publication of a document giving details of the acquisition and
convening a general meeting of the Company to seek the approval of the
shareholders of the Company (the "Shareholders") of the Acquisition.

The Company is today posting a document to its Shareholders giving the required
details and convening a general meeting of the Company, to be held at the
offices of Memery Crystal at 12.30 pm on 7th May 2008, at which Shareholders
consent for the Acquisition will be sought.

Woodspeen has today also made application for the 800,000 new ordinary shares
of the Company (the "Initial Consideration Shares") to be issued as a part of
the initial acquisition consideration to be traded on the PLUS-quoted market
and conditional upon the outcome of the general meeting it is anticipated that
trading in the Initial Consideration Shares on the PLUS-quoted market will
commence at 8.00am on Thursday 8th May 2008.

In light of the above it is anticipated that trading in the Company's 8,910,000
existing ordinary shares of the Company will recommence on PLUS-quoted at
8.00am on Monday 21 April 2008.


Sector classification: Support Services

Principal Activities: The acquisition and development of businesses engaged in
the delivery of vocational training to adults in the UK.

Existing shares in issue 8,910,000

Expected date for recommencement

of trading in existing shares Monday 21st April 2008

Number of Initial Consideration

Shares to be issued 800,000

Expected trading date for

Initial Consideration Shares: Thursday 8th May 2008

Enlarged share capital 9,710,000

Market Cap at price at

which consideration

shares to be issued 4,855,000

Corporate Adviser: Whim Gully Capital LLP ("WGC")

Tel. +44 (0) 1488 608877


Woodspeen Training PLC was incorporated on 22 November 2007 with the aim of
creating a substantial UK vocational training business principally by acquiring
existing businesses providing Government sponsored and / or privately funded
vocational training.

By the first quarter of 2008 the Company had raised a total of £2,750,000
through the issue of new Ordinary Shares and on 17 March 2008 the Company's
shares were admitted to trading on the PLUS-quoted market. The Company
subsequently raised an additional £64,000 through a placing of further ordinary
shares of the Company (the "Ordinary Shares").

Government funded training in England is currently delivered through the
Learning Skills Council (the "LSC"). The LSC's budget for 2007/2008 for adult
training was £3.064 billion. In November 2007 the Government announced that
over the next 3 financial years this would be progressively increased to £3.599
billion by 2010/2011. In March 2008 the Government announced that it was
proposing to dissolve the LSC in 2010 and that thereafter government funded
adult training would be delivered by a newly formed Skills Funding Agency. The
Directors believe that the amount and nature of government funding committed
for adult training will be unaffected by this change.

The Government's objective is to improve the skills of the UK workforce with a
particular emphasis on those individuals with qualifications below National
Vocational Qualifications level 2 (the equivalent of 5 GCSEs at grades A-C).
Within this area of focus there are two government sponsored programmes of
particular interest to the Company, Learndirect and Train to Gain. Both of
these programmes are currently delivered to end users through an extensive
network of providers. The Directors believe that economies of scale can be
achieved through the consolidation of a number of these providers.

The Directors intend to use their significant experience in the training sector
to identify appropriate acquisition targets from amongst these providers. They
will then undertake or commission due diligence and negotiate the terms of any
subsequent transactions. It is the intention of the Directors, as part of the
Company's strategy, that the vendors of such businesses will receive some or
all of the purchase consideration in the form of new Ordinary Shares and will
continue to be involved in the management of their businesses and the further
expansion of the Company.

Prior to the proposed Acquisition the Company was an Investment Vehicle under
the PLUS Rules. The proposed Acquisition, being the Company's first, is
therefore deemed to be a reverse takeover and is therefore subject to, inter
alia, Shareholders approval.

Acquisition Strategy

As referred to above, the Government funded vocational training market is
highly fragmented and the Directors believe this provides an opportunity for
the Company to build a large and profitable business by consolidating the
sector and realising the synergies that such consolidation affords.

The intention of the Directors is to continue to target businesses that:

 a. are profitable or which, in the opinion of the Directors, can achieve
    profitability in the short to medium term;
 b. have a reputation for quality training evidenced, where applicable, by high
    OFSTED ratings and high learner achievement rates; and
 c. have a strong management team who can be incentivised to grow the business.
Whilst it is initially the intention of the Directors to leave the day to day
management of businesses acquired to their existing management teams, it is
also envisaged that at the appropriate time selective businesses will be
integrated to take advantage of synergies in marketing, quality control
procedures, and lower administrative overheads. At this stage of the Company's
development it is intended that a full time group chief executive will be
appointed to oversee and manage such integration and take overall management
control of the Group.

The Company is currently investigating a number of other potential

The Directors anticipate that all businesses to be acquired will be based in
the UK.

Prospective shareholders should continue to be aware that any investment in the
Company should be made on a long term basis in order to obtain the benefits of
the Directors' strategy.

If the Directors consider that further funds are required, whether in
connection with an acquisition or otherwise, they may seek to raise such funds
by way of equity from new and/or existing Shareholders or through debt finance.

The Directors continue to believe that the majority of acquisition
opportunities will be sourced from their own contacts within the training

Potential acquisitions will be reviewed by the Company and initial screening
and due diligence will be carried out. Outside consultants and professional
advisers will be used where appropriate, but the Company will endeavour to keep
their involvement to a minimum in order to control expenses.

Current Trading

The Company, which did not trade prior to admission of the issued share capital
of the Company to the PLUS-quoted market on 17 March 2008, has incurred limited
costs since that time as envisaged in investigating acquisition opportunities
and the proposed Acquisition. At 31 March 2008 the Company had cash deposits of

Dividend Policy

The objective of the Directors is to achieve substantial capital growth for the
Shareholders through the creation of a significant company in the vocational
training sector. Consequently they do not anticipate that the Company will pay
dividends to its shareholders in the short to medium term. The Directors will
keep this position under review and would intend at an appropriate stage in the
future to pay a proportion of the Company's profits in each year to
shareholders by way of a dividend.


Charles Prior - Executive Chairman, aged 60

Charles is a Chartered Accountant and was one of the founder shareholders and
directors of BPP Holdings PLC. BPP Holdings PLC joined the Unlisted Securities
Market of the London Stock Exchange in 1986 and obtained a listing on the
London Stock Exchange in July 1987. Charles was its Chief Executive until his
retirement in August 2007. Under his leadership BPP Holdings PLC grew to become
what the Directors believe is now the largest training company for
professionals in the UK and currently has a market capitalisation of over £250
million. In the year to 31 December 2006 BPP Holdings PLC made pre-tax profits
of £18 million on a turnover of £129 million.

Lynn Chandler - Finance Director, aged 47
Lynn is a Chartered Accountant and was the Finance Director of BPP Holdings PLC
for 10 years until she retired from full-time employment in 2005.  Lynn is a
Non-Executive Director of Ealing NHS Trust and three operating subsidiaries of
the Dominion Housing Group.

The Board intends to make further appointments of directors, including
non-executive directors, as the Company's investment strategy progresses and
suitable candidates are identified. Ideally, appropriate executive directors
will be found within the businesses to be acquired but, if this not the case,
an executive search process will be initiated.


The directorships held by each of the Directors during the last five years,
other than in the Company, and the partnerships in which they have been
partners during the last five years are as follows:

Charles Campbell Leathes Prior                                                 
Current Directorships                 Past Directorships                       
BPP Services Limited                  Hyperion Training Limited                
                                      BPP Financial Education Limited          
                                      BPP Management Education Limited         
                                      BPP Assessment Limited                   
                                      BPP Publishing Limited                   
                                      Hazell Carr Training Limited             
                                      Derivative Solutions Limited             
                                      BPP Training & Consultancy Limited       
                                      Tax Technical Seminars Limited           
                                      BPP CIM Courses Limited                  
                                      BPP Financial Courses Limited            
                                      BPP Medical Education Limited            
                                      Melrose Film Productions Limited         
                                      Learning Pack Limited                    
                                      BPP Training & Consultancy Limited       
                                      BPP College of Professional Studies      
                                      BPP CPD Courses Limited                  
                                      Actuarial Education Company Limited      
                                      BPP Actuarial Education Limited          
                                      Linguarama International Group Limited   
                                      Linguarama Limited                       
                                      Linguarama Publications Limited          
                                      Linguarama Services Limited              
                                      Colon Language Schools International     
                                      BPP College of Professional Studies      
                                      BPP Professional Education Limited       
                                      BPP PSC Courses Limited                  
                                      Linguarama Alton Plc                     
                                      BPP CPD Courses Limited                  
                                      Mander Portman Woodward Limited          
                                      BPP Holdings Plc                         
                                      BPP Medical Services Limited             
                                      BPP Medical Education Limited            
                                      Lakefence Limited                        
                                      BPP Hyperion Training Limited            
                                      Cadmus Limited                           
                                      CPE Courses Limited                      

Lynn Angharad Chandler                                                         
Current Directorships                 Past Directorships                       
Acton Housing Association             BPP Taxation Courses Limited             
Optimum Housing Limited               BPP Medical Services Limited             
Ealing NHS Hospital Trust             BPP Professional Development Limited     
A2 Dominion Investments Limited       Tax Technical Seminars Limited           
                                      BPP Holdings Plc                         
                                      BPP Hyperion Training Limited            
                                      Lakefence Limited                        


Futures is a private company which was formed in 1994 and was acquired by
Jeremy and Lucy Thompson, two of the three shareholders of Futures (the
"Vendors"), and initially through a company called Contessa Investments
Limited, in 2000. The company delivers a range of computer based vocational
training courses to adults in the UK almost exclusively, under the Government's
Learndirect and Train to Gain programmes.

Futures is believed by its directors to be one of the largest deliverers of
Learndirect courses in the UK with contracts in place covering the South West,
South East and East Midlands regions. The company currently operates from 11
learning centres in Brighton, Worthing, Bognor Regis, Chichester, Bournemouth,
Poole, Wareham, Dorchester, Weymouth, Daventry and Onley, each of which has
been equipped for the delivery of a range of computer based training courses
that are held centrally on a database managed by Learndirect.

Current Trading and Future Prospects

The following financial information has been compiled from the audited accounts
of Futures by showing the turnover and operating profit of Futures adjusted for
non-recurring costs which have been added back to provide a clearer picture of
Futures' performance. These adjustments include an adjustment to directors of
Futures' remuneration, for all 3 years, to reflect their continuing contractual
arrangements following Admission and, for the years ended 30 September 2005 and
2007, adding back what the Directors believe to be exceptional clawbacks of
turnover and consequent reduction in operating profits of £7,000 and £69,000
respectively following an audit inspection by the UfI of Futures' student

Year Ended                           30/09/05       30/09/06       30/09/07    
Turnover (£'000s)                     1,121           933            1,635     
Adjusted operating profit/(loss)       432            (58)            233      

In the five months ended 29 February 2008 Futures had unaudited turnover of £

The fall in turnover in the financial period ending 30 September 2006 was due
to contract implementation timing differences.

As with all government funded training schemes, Futures is subject to regular
audits by the Learning and Skills Council to ensure that the funding has been
used for the purposes intended. Over the past year Futures has increased the
strength of its internal audit department, and whereas in the past audit
samples contained minor discrepancies in paperwork completed by tutors, which
(when extrapolated) sometimes resulted in a clawback, no funding is now claimed
without a complete internal audit. In addition the relevant audit rules have
been changed in favour of providers so that if the potential clawback is 5% or
less of the funding claimed, then no clawback is applied.

It is the Directors current intention, along with the directors of Futures to
continue to develop the business by opening further training centres and to
increase the number and range of courses delivered by each of the existing
centres. The directors of Futures will continue to manage the day to day
business following the Acquisition.

Principal Terms of the Acquisition

Pursuant to an acquisition agreement between the Vendors and the Company,
Woodspeen has conditionally agreed to acquire the entire issued share capital
of Futures for up to £2,762,500, of which £1,150,000 is payable upon Completion
and the balance, which is capped at £1,612,500, is Earnout Consideration and
will be payable dependent on Futures' pre-tax operating profits for the
financial years ending on 31 March 2009 and 31 March 2010.

The cash element of the Consideration, together with the costs associated with
the Acquisition and the admission of the Initial Consideration Shares to
trading on the PLUS-quoted market, will be met from the Company's existing cash
resources. As Futures is both profitable and cash generative, it is not
anticipated to require funding for its day to day operations from the Group.

The Consideration payable upon Completion will be satisfied as to £650,000 in
cash, as to £400,000 by the issue of 800,000 Consideration Shares at an issue
price of 50 pence per Ordinary Share and as to the balance of £100,000 by the
issue by the Company to the Vendors of the Convertible Loan Notes. The
Convertible Loan Notes will be unsecured and interest free and will be
repayable on 30 January 2009, unless previously converted at the election of
each Convertible Loan Note holder into Consideration Shares at a conversion
price of 50 pence per Ordinary Shares. Conversion of all the Convertible Loan
Notes would result in the issue of 200,000 Consideration Shares.

The Earnout Consideration, up to a maximum aggregate amount of £1,612,500, will
be payable in two instalments and will be dependent upon Futures' pre-tax
profits in each of its financial years ending on 31 March 2009 and 31 March

The first instalment will be 6.25 times the amount by which Futures' pre-tax
operating profits for the financial year ending on 31 March 2009 exceed £
250,000, capped at £750,000. It will be satisfied as to 40 percent in cash and
60 percent by the issue of a maximum of 750,000 Consideration Shares at an
issue price of 60 pence per Ordinary Share.

The second instalment will be 7.1875 times the amount by which Futures' pre-tax
operating profits for the financial year ending on 31 March 2010 exceed £
325,000, capped at £862,500. It will be satisfied as to 34.75 percent in cash
and 65.25 percent by the issue of a maximum of 750,375 Consideration Shares at
an issue price of 75 pence per Ordinary Share.

The Initial Consideration Shares to be issued on Completion will represent
8.24% of the enlarged share capital of the Company on Admission and will rank
pari passu in all respects with the existing Ordinary Shares in issue at the
date of this Document.

The Acquisition is conditional, amongst other things, upon:

1/ the passing of the Resolution; and

2/ Admission, which is expected to take place on 8 May 2008.

Directors and Senior Management

Brief biographical details of Futures' Directors are as follows:

Jeremy Thompson - Executive Chairman - aged 54

Jeremy is a Chartered Accountant and a graduate of Oxford University. Having
qualified with KPMG he worked in commerce and investment banking, and in 2000
purchased Futures. He has been responsible for restructuring this company and
making the strategic decisions to take it into new government funded areas of

David Lawrence - Managing Director - aged 33

David joined Futures in 2003 as its sales manager, and was made a director in
2005 following his success in building the company's activities with
Learndirect. In April 2006 he was appointed Managing Director. He is a graduate
of London University, and prior to joining Futures worked in the training and
recruitment market.

Ron Hunnisett - Director of MIS and Audit Compliance - aged 60

Ron was in the army until 1995, and worked as a systems analyst with the Royal
Army Ordnance Corps. On leaving the Army he became an IT Trainer and after
working for a number of training companies joined Futures in 2001 as Corporate
IT Training Manager. He became a director in 2006 and is responsible for
ensuring that the company meets the audit requirements associated with
Government Funded Training.


The Directors believe that Admission offers the following benefits:

  * availability of publicly traded shares - the Directors believe the issue of
    publicly traded shares as consideration for any acquisition will be more
    attractive to potential vendors than shares in a company which are not
    traded on an investment exchange;
  * future capital requirements - the Directors believe that Admission will
    enable the Company to access capital at later dates more effectively than
    if it were an unquoted company;
  * increased corporate profile - the Directors believe that the status of
    being a company whose shares are traded publicly could benefit any
    businesses to be acquired by increasing their profile with customers and
    suppliers; and
  * incentivisation of key staff - the opportunity to own and retain shares and
    incentivise staff through the use of share options in respect of publicly
    traded shares.


The interests of the Directors, the vendors and persons connected with them
(within the meaning of section 252 of the 2006 Act), (all of which are
beneficial save where otherwise stated) in the share capital of the Company as
at the date of this Document, and as they are expected to be immediately
following Admission are as follows:

                      Number of   Percentage of       Number of   Percentage of
                       Ordinary existing issued        Ordinary    issued share
                                  share capital                         capital
                         Shares                          Shares     immediately
                 currently held                     immediately       Admission
Charles Prior         2,000,000           22.45       2,000,000           17.53
Lynn Chandler           375,000            4.21         375,000            3.29
Evolve                1,500,000           16.84       1,500,000           13.15
Jeremy Thompson               -               -         954,343            8.36
Lucy Thompson                 -               -         954,343            8.36
David Lawrence                                          591,689            5.19

Evolve is an investment company listed on the Alternative Investment Market (a
market operated by the London Stock Exchange) with the specific objective of
investing in PLUS-quoted companies or companies intending to seek a listing on

Edward Vandyk and Oliver Cooke of WGC are both officers of Evolve and together
hold approximately 12% of its issued share capital. In light of WGC's
relationship with the Company Edward Vandyk and Oliver Cooke took no part in
Evolve's decision to invest in the Company.


The Directors, Shareholders connected with the Directors and Evolve have agreed
not to dispose of any interests in Ordinary Shares within a period of 12 months
from 17 March 2008, being the date of the Company's original Admission onto
PLUS-quoted, save in certain specific circumstances permitted by the PLUS

The Vendors have agreed to enter into lock-in arrangements on Completion under
which they will agree not to dispose of the Ordinary Shares issued to each of
them pursuant to the terms of the Acquisition Agreement within the period of 12
months following their date of issue, without the prior consent of the Company
and WGC.


The Directors believe that an investment in the ordinary shares of the Company
may be subject to a number of risks. Investors and prospective investors should
consider carefully the risks described below, before making any investment
decision. The information below does not purport to be an exhaustive list.
Investors and prospective investors should consider carefully whether
investment in the ordinary shares is suitable for them in light of the
information and their personal circumstances.

Risks relating to the vocational training sector

Government funding

The strategy of the Company is to acquire businesses which may be reliant on
continued government funding to the vocational training sector. There can be no
assurance that government policy or practice in providing funds for vocational
training will remain the same.

Internal quality controls

Maintaining high standards of quality control are imperative to ensure that the
standards of vocational training qualifications are maintained. Therefore, any
fall in these standards could adversely affect the Company's relationships with
the funding bodies or the awarding bodies.

Regulatory Environment

The profitability of the Company will be in part dependent upon the
continuation of a favourable regulatory climate with respect to its activities.
The failure to obtain or to continue to comply with all necessary approvals,
licences or permits, including renewals thereof or modifications thereto, may
adversely affect the Company's performance, as could delays caused in obtaining
such consents due to objections from third parties.

Risks relating to the Company and its strategy
The Company was incorporated on 22 November 2007 and has no operating history.
The Company is subject to all of the business risks and uncertainties
associated with any new business enterprise, including the risk that the
Company will not achieve its investment objectives or be able to implement its
strategy and that the value of a Shareholder's investment in the Company could
decline substantially.

The financial operations of the Company may be adversely affected by the
particular financial condition of other parties doing business with the

The activity of identifying and securing attractive acquisitions may from time
to time be highly competitive and involve a high degree of uncertainty. The
Company will be competing for acquisitions with established operators in the
vocational training sector as well as other investment vehicles, individuals,
financial institutions and other institutional investors.

The Company may make investments in newly established or early stage companies.
Investments in early stage, less established companies may present greater
opportunities for growth but also carry a greater risk than is usually
associated with more established companies, which often have a historical
record of performance.

The Company currently does not have any trading subsidiaries or activities and
following the acquisition will have only one trading subsidiary. The value of
an investment in the Company is dependent upon the Company successfully
investing in companies that meet the Board's investment criteria. There can be
no guarantee that any further investment opportunities meeting these criteria
will be identified or that any further acquisitions will be successfully

The Company's success will depend on its current and future directors and
management team. The retention of the current or future directors cannot be
guaranteed. The Directors, both of whom are executive, have, or may have in the
future, other additional business interests, including involvement as directors
of, or substantial shareholders in, other quoted or unquoted companies
established to grow through acquisition of businesses or interests in
businesses. The Directors do not consider that their other business interests
currently present any conflict of interest. The Board has put in place
procedures to ensure, so far as is practicable, that in the event of any
conflict of interest arising, it will be resolved fairly in the interests of
the Company and to ensure that the Company can, at all times, operate

The Company may incur costs in conducting due diligence into potential
acquisition opportunities that may not result in an acquisition being made.

The net cash proceeds of the Placing may be insufficient to cover all due
diligence costs incurred in researching potential acquisition opportunities
and, in order to implement its strategy, it may be necessary to raise
additional funds in the future by a further issue of new Ordinary Shares. Any
such additional financing is likely to dilute existing shareholdings.

The net cash proceeds of the Placing may be insufficient to cover acquisition
costs, the working capital requirements and development costs of acquired
companies and the Company's increased fixed costs following completion of such
acquisitions. The Company may therefore need to raise additional funds at the
time of any acquisition by a further issue of new Ordinary Shares, in order to
fund any cash consideration payable and/or ongoing working capital

Vendors of businesses that meet the criteria for acquisition by the Company may
not be prepared to accept Ordinary Shares in the Company as consideration. The
Company may not, in such circumstances, be able to raise sufficient cash to
complete the acquisition.

There is no guarantee that, following any acquisition, the Company will be able
successfully to integrate and manage the newly acquired business.

The Company may use borrowings to finance its acquisitions. Any borrowings of
the Company will generally be secured against some or all of the assets of the
Company. To the extent that the Company incurs floating rate indebtedness,
changes in interest rates may increase its cost of borrowing, impacting on its
profitability and having an adverse effect on the Company's ability to pay
dividends to Shareholders. Furthermore, the Company's cash available for
distribution to Shareholders may be reduced to the extent that changes in
market conditions, increases in interest rates and/or levels of amortisation
imposed by its lenders cause the Company's cost of borrowing to increase
relative to the income that can be derived from its assets. Any bank facility
agreements entered into by the Company may contain financial covenants.

There can be no guarantee that the Company will generate returns or
distributable profits. There can be no guarantee that a dividend will be paid.

Risks inherent in Ordinary Shares

Smaller companies tend to suffer from less liquidity, such that the Ordinary
Shares may be difficult to sell.

Shareholders should take their own tax advice as to the consequences of owning
Ordinary Shares as well as receiving returns from them. In particular,
Shareholders should be aware that ownership of Ordinary Shares in the Company
may be treated in different ways in different jurisdictions.

An investment in the Company is only suitable for investors capable of
evaluating the risks and merits of such investment and who have sufficient
resources to bear any loss which may result. A prospective investor should
consider with care whether an investment in the Company is suitable for him in
the light of his personal circumstances and the financial resources available
to him. Investment in the Company should not be regarded as short term in
nature. There can be no guarantee that any appreciation in the value of the
Company's investments will occur or that the investment objectives of the
Company will be achieved. Investors may not get back the full amount initially
invested. The prices of shares and the income derived from them can go down as
well as up. Past performance is not necessarily a guide to the future. Changes
in economic conditions including, for example, interest rates, rates of
inflation, industry conditions, competition, political and diplomatic events
and trends, tax laws and other factors can substantially and adversely affect
equity investments and the Company's prospects.


The nominal value of each ordinary share is 10p and the price at which the
Initial Consideration Shares are to be issued is 50p per share, which
represents a premium of 40p over the nominal value. On Admission on the
consideration shares there will be 9,710,000 ordinary shares in issue giving
the Company a market capitalisation of GBP 4,855,000 at the price at which the
consideration shares are to be issued.

Full details are set out in the admission document which is available from Whim
Gully Capital LLP, The Coach House, Stockcross House, Stockcross, Newbury,
Berkshire, RG20 8LP

Tel. +44 (0) 1488 608877 Fax. +44 (0) 1488 608845 or email
[email protected]


Woodspeen Training plc Charles Prior 07767 356492

                       Lynn Chandler  020-8743 9172

Corporate Adviser:

Whim Gully Capital LLP Oliver Cooke 01488-608877


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