21st Mar 2014 08:05
LONDON (Alliance News) - Eagle Eye Solutions Group PLC said Friday it intends to raise up to GBP6 million in a share placing and list for trading on the AIM market, as it announced its conditional acquisition of AIM-listed 2ergo Group PLC's mobile coupon and loyalty business.
Eagle Eye, a digital consultancy which operates in the retail and hospitality industries, said it intends to float on AIM following a share placing raising approximately GBP6 million, with dealings expected to commence in April 2014. Following completion of the offer, it is expected that Eagle will have a free float of at least 30% of the issued share capital of the company.
The company said the funds raised from the Offer will "enable the Company to acquire a major competitor, providing access to new customers and significant IP, accelerate the growth of the company and help fund further investment in strategic technology."
Eagle Eye said the fund raised will also be used to raise its profile in its targeted markets, provide increased working capital for growth, and enable it to incentivise key staff.
The company also announced that it has conditionally agreed to acquire AIM-listed 2ergo's mobile coupon and loyalty business for a total consideration of GBP4.5 million. The deal will be settled with a GBP2.5 million cash payment and the issuance of GBP2 million in Eagle Eye stock at its IPO placing price.
The acquisition remains subject to 2ergo shareholder approval.
Under AIM rules, following the deal 2ergo will become an investment company, with an investment policy focusing initially on the TMT sector, and will change its company name to Broca PLC. Post-listing 2ergo will own approximately 6% of Eagle Eye.
2ergo is selling off the business following a GBP3.1 million funding boost from shareholders in June to commercialise its podifi technology. Despite seeing revenues from successful trials and established pilots, 2ergo said, "no single contract has given the board sufficient comfort that the revised strategy would allow the Company to deliver on the promise of the technology in the short term." To develop the podifi technology further, the company said it would require a new and "significant" funding round.
The acquisition follows extensive discussions with Eagle Eye on exploring whether the IP within both businesses could be combined. 2ergo said the disposal will allow shareholders of the company to "monetise the IP of the company now without dilution from further fundraisings while continuing to benefit from exposure to the podifi technology through the shares that 2ergo will receive in part consideration and which the board currently intend to retain on behalf of shareholders."
Ian Smith, Executive Chairman of 2ergo said, "The management team has worked incredibly hard to continue to prove the value of the technology the Company has created. The Board remains confident that the podifi technology has the ability to be a leading architect of change in the digital coupon and loyalty arena. However, sales traction has continued to be slow and we cannot give our shareholders the certainty they require over the Company's requirements for further funding to develop the opportunity independently. We are optimistic and enthusiastic over the ability of Eagle Eye to combine the two company's technologies and to leverage its Board's experience in the retail sector to successfully penetrate the market."
Panmure Gordon (UK) Limited is acting as sole financial adviser, nominated adviser and broker to Eagle Eye in connection with the offer.
"Eagle Eye is growing rapidly in the fast expanding market for digital coupons and payments. The acquisition of 2ergo accelerates that growth through acquiring blue chip customers, valuable IP and an experienced management team. The IPO will provide us with the capital to maintain our UK market leadership and enter lucrative overseas markets," Phill Blundell, CEO of Eagle Eye, said.
Shares in 2ergo dropped to the bottom of the AIM market in early trading, down 29.41% at 1.25 pence per share.
By Alice Attwood; [email protected]; @AliceAtAlliance
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