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Draper Esprit PLC (GROW)

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Wednesday 11 March, 2020

Draper Esprit PLC

Issue of Equity

RNS Number : 6944F
Draper Esprit PLC
11 March 2020
 

THIS ANNOUNCEMENT AND THE INFORMATION IN IT, IS RESTRICTED, AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA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

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN THE COMPANY. THIS ANNOUNCEMENT HAS BEEN ISSUED BY AND IS THE SOLE RESPONSIBILITY OF THE COMPANY.

 

11 March 2020

DRAPER ESPRIT PLC

("Draper Esprit" or the "Company")

Issue of equity following the acquisition of the balance of Draper Esprit's EIS business

 

Draper Esprit PLC (AIM: GROW, ESM: GRW), a leading venture capital firm involved in the creation, funding and development of high-growth digital technology businesses, announces that on 10 March 2020 the Company acquired the 28% interest it does not already own in Encore Ventures ("EV"), the partnership which manages Draper Esprit's EIS funds. Following the acquisition, the Company will own 100% of EV.

In consideration for the acquisition the Company will issue 796,812 new ordinary shares at 502p, being the closing price on 10 March 2020, representing a total consideration of £4.0 million. The acquisition consolidates the 28% legal interest the Company does not already own and represents a 60% beneficial interest. The acquisition will be immediately earnings-enhancing for the Company, as well as increasing the proportion of the Company's earnings attributable to management fees. In the year to  31  March 2020 , EV is forecasting revenues of £2.8 million and expects these to increase further in the year to 31   March 2021 .

Draper Esprit's EIS funds have been the highest rated EIS by the Tax Efficient Review for the past 5 years with approximately £160.0 million of assets under management ("AUM").

The approach of Draper Esprit's EIS funds is to follow a co-investment strategy with the majority of invested capital committed to larger investment rounds, providing growth capital to 'scale up' companies with the potential to reach $50m-$1Bn+ valuations at the point of realisation.

Following the acquisition, the Company will own a 100% of the legal and economic interest in EV, as compared to the 72% legal interest and 40% economic interest currently held. Going forward, the acquisition will therefore eliminate the non-controlling interest line in the Company's financial statements, which amounted to 0.6m for the year ended 31 March 2019 and 0.4m for the six months ended 30 September 2019.

 

Commenting on the transaction, Martin Davis, Draper Esprit's Chief Executive Officer, said:

"Consolidating our ownership of our EIS business better aligns our group structure to support the continued scale-up of our business. One of our overall goals at Draper Esprit is to democratise investment, allowing a range of different savers and investors access to the returns that the high-growth companies in which we invest provide. Our market leading EIS funds already support this goal but, by acquiring the outstanding legal interest in the shares we didn't own, we have consolidated our ability to offer this while simultaneously increasing the fee revenue into the Draper Esprit plc business."

 

Transaction details

Application has been made for the new ordinary shares to be admitted to trading on AIM and Euronext Growth and it is expected that admission will take place on 11 March 2020. The new ordinary shares will rank pari passu with the existing shares of the Company.

Following Admission, the total issued share capital of the Company will increase to 118,918,124 ordinary shares which may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure Guidance and Transparency Rules. The Company does not hold any shares in treasury.

-ENDS-

 

 

 Enquiries

Draper Esprit plc

Martin Davis (Chief Executive Officer)

Ben Wilkinson (Chief Financial Officer)

 

+44 (0)20 7931 8800

Numis Securities

Nominated Adviser & Joint Broker

Richard Thomas

Jamie Loughborough

+44 (0)20 7260 1000

Goodbody Stockbrokers

Euronext Growth Adviser & Joint Broker

Don Harrington

Charlotte Craigie

Dearbhla Gallagher

+44 (0) 20 3841 6202

Powerscourt

Public relations

James White

Elly Williamson

Jessica Hodgson

+44 (0)20 7250 1446

 

 

 


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