Acquisition

10th Dec 2008 07:30



IQ Holdings plc ("IQ Holdings" or the "Company")

Proposed acquisition of the businesses known as Viewpoint Field, Viewpoint Studios and The Wire

Share Capital Reorganisation

Placing

Re-Admission to trading on AIM

and

Notice of General Meeting

Highlights

* IQ Holdings has entered into conditional agreements to acquire three business divisions (Viewpoint Field, Viewpoint Studios and The Wire) from Illuminas Limited for an initial consideration of £750,000 in cash, plus shares worth £250,000 and a potential deferred consideration of £500,000 (subject to a net asset value adjustment following the preparation of completion accounts) in cash (or at Illuminas' request, in shares)

* The Wire is an international computer assisted telephone interviewing and on-line quantitative data collection business. Viewpoint Field provides Respondent recruitment and face to face surveys, whilst Viewpoint Studios provides studio facilities for focus groups.

* Proposed Placing of not less than £750,000 before expenses

* The Directors believe that the Acquisitions will extend the Group's data collection service offering, increase revenues, offers potential for synergies and will allow the Group to develop high quality End Client facing practices for research-based consultancy businesses

* The transaction is subject to the approval of Existing Shareholders at a General Meeting to be held on 14 January 2008. The Board intends to recommend unanimously that Existing Shareholders vote in favour of the Resolutions as they have irrevocably undertaken so to do in respect of their combined shareholding which totals 20.82 per cent of the Existing Ordinary Share Capital

* The Directors are mindful of the recent uncertainty regarding the global and domestic economy. However the Directors are confident that steps to be taken to reduce the Group's cost base will enhance its prospects, alongside the improved service offering that the Enlarged Group will be able to offer to its clients. Accordingly, the Directors believe that the Proposals are fundamental to the future of the Group

Commenting on the Acquisitions, Julian Green, CEO of IQ Holdings, said

"We are delighted with this transaction, which places the Group in a strong position to achieve its strategic objectives, generate profits and add shareholder value. The acquisition will significantly expand the Group's data collection service offering, client base and cross selling opportunities, which in turn should enhance revenues." 

The Admission Document including the Notice of General Meeting is to be posted to Existing Shareholders today and will shortly be available to view on the Company's website: http://www.iqresearch.co.uk/ 

The above summary should be read in conjunction with the full text of this announcement. Unless otherwise defined in this announcement, capitalised words and phrases used in this announcement shall have the same meanings given to them in the Admission Document.

  Enquiries:

Julian Green

IQ Holdings plc

Tel: 0207 328 8823

Website: www.iqresearch.co.uk 

 

Jenni Herbert / Gemma O'Hara

Bishopsgate Communications Ltd

Tel: 020 7562 3350

Email: [email protected] 

Fiona Kindness / Gerry Beaney

Grant Thornton UK LLP (Nomad)

Tel: 0207 383 5100

 

Ian Callaway / Peter Manfield

SVS Securities plc (Broker)

Tel: 0207 638 5600

PLACING AND RE-ADMISSION STATISTICS

Placing Price*	0.10p
Number of Existing Ordinary Shares in issue	86,426,760
Number of Consideration Shares *	250,000,000
Number of Placing Shares *	750,000,000
Number of Broker Shares plus New Ordinary Shares to be issued to SVS in respect of fees*	143,706,672
Number of Loan Conversion Shares*	44,000,000
Number of Introducer Shares *	50,000,000
Number of issued New Ordinary Shares on Re-Admission *	1,324,133,432
Percentage of the Enlarged Share Capital represented by the Consideration Shares *	18.9%
Percentage of the Enlarged Share Capital represented by the Placing Shares *	56.6%
Percentage of the Enlarged Share Capital represented by the Introducer Shares,  Broker Shares, New Ordinary Shares to be issued to SVS in respect of fees and the Loan Conversion Shares	18.0%
Percentage of the Enlarged Share Capital represented by the Existing Shareholders*	6.5%
Gross proceeds receivable by the Company pursuant to the Placing*	£750,000
Expenses of the Placing*: - payable in cash - payable in shares - total	467,000 128,000 595,000
Estimated net proceeds of the Placing receivable by the Company pursuant to the Placing (after expenses, payable in cash, including VAT of £467,000)	£283,000
Market Capitalisation of the Company at the Placing Price on Re-Admission*	£1,324,133

* Within this table and throughout this announcement it is assumed that the Placing raises £750,000 (before expenses) and is effected at a price of 0.10 pence per New Share. There is no guarantee that this price will be achieved.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Publication of Admission Document	9 December 2008
Latest time and date for receipt of Forms of Proxy	10.00a.m. on Monday, 12 January 2009
General Meeting	10.00a.m. on Wednesday, 14 January 2009
Re-Admission to trading on AIM effective and commencement of dealings in the Enlarged Share Capital	8.00 a.m. on Thursday, 15 January 2009
CREST stock accounts credited (as applicable)	Thursday, 15 January 2009
Definitive share certificates despatched (as applicable)	week commencing Monday, 26 January 2009

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA. 

The contents of this announcement has been prepared by and is the sole responsibility of the Company.

This announcement is exempt from the general restriction in section 21 of the UK's Financial Services and Markets Act 2000 ('FSMA') on communications or invitations or inducements to engage in investment activity pursuant to the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended (the 'Financial Promotion Order') on the grounds that it is required to be made in accordance with the rules of a relevant market and is therefore exempt pursuant to article 67 of the Financial Promotion Order. 

Grant Thornton UK LLP, which is regulated by the Financial Services Authority, is acting as Nominated Adviser exclusively for the Company in connection with the arrangements described in this announcement, is not acting for any other person and will not be responsible to any person other than the Company for providing the protections afforded to customers of Grant Thornton UK LLP, or for advising any other person in connection with the arrangements described in this announcement. The responsibilities of Grant Thornton UK LLP, as Nominated Adviser, are owed solely to the London Stock Exchange.

 

No invitation or offer to acquire shares in the Company is being made by this announcement. 

This announcement may contain certain forward-looking information which may be subject to risks and uncertainties that could significantly alter expected results and are based upon certain key assumptions. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. The Company and Grant Thornton UK LLP disclaim any obligation to update any forward-looking statements contained herein, except as required by applicable law. 

1. Introduction

The Company is pleased to announce that it has signed conditional agreements to acquire, through its wholly owned subsidiaries Viewpoint Field Services and The Wire Services, three business divisions ("Viewpoint Field", "Viewpoint Studios" and "The Wire") from Illuminas, a subsidiary of Media Square on 9 December 2008. The Wire is an international computer assisted telephone interviewing ("CATI") and on-line quantitative data collection business. Viewpoint Field provides Respondent recruitment and face to face surveys, whilst Viewpoint Studios provides studio facilities for focus groups. The Directors believe that the Acquisitions will extend the Group's data collection service offering, increase revenues and be earnings enhancing (this statement regarding earnings enhancement is not a profit forecast and should not be interpreted to mean that the earnings per share in the financial year ended 30 September 2008 or any subsequent year will necessarily match or be greater than for any preceding period.). The Directors believe that acquiring The Wire offers an opportunity for growing the data collection business of the Company, as it brings good potential for synergy with Rosslyn's CATI business and a broader management structure for Rosslyn. The Directors believe that Viewpoint Field's and Viewpoint Studios' core businesses of qualitative recruitment and studio facilities will extend the Company's data collection capability and its client base. Viewpoint Studios' UK field research business is believed by the Directors to have a good overlap with Rosslyn's UK field research capability and offers potential for synergy. Additionally, the Directors believe that the Acquisitions will allow the Group to develop high quality End Client facing practices for research-based consultancy businesses.

In order to carry out the Acquisitions, and the related Placing described below, the Company's share capital will need to be reorganised. The reason for this is that the Company's mid-market share price at 8 December 2008 of 0.15 pence is below the nominal value of an existing ordinary share of 0.4 pence each. In addition the price at which the Placing is currently proposed to be effected is 0.10 pence per Placing Share which is below the existing nominal value and a company cannot issue shares for less than their nominal value. The splitting of the Company's share capital into Deferred Shares and New Ordinary Shares will allow the Company to issue the New Shares required under the Proposals. It should be noted that the price at which the Placing will be effected may be at a price other than 0.10 pence per New Share if the Company, Grant Thornton UK LLP and SVS so agree.

The consideration for the Acquisitions is to be satisfied by an initial consideration of £750,000 in cash plus the issue of the Consideration Shares worth £250,000 at the Placing Price. A deferred consideration of £500,000 in cash will also be paid, subject to a net asset value adjustment following the preparation of the Completion Accounts, in four equal instalments again in cash of £125,000 payable on the dates which are eighteen months, twenty four months, thirty months and thirty six months from Completion. However, subject to the terms of the Acquisition Agreements, the Vendors have the option to receive all or part of the four instalments of £125,000 as New Ordinary Shares allotted and issued at the Placing Price. Based on a Placing Price of 0.10 pence per New Ordinary Share, the maximum aggregate potential consideration for the Acquisitions is approximately £1,500,000 subject to a net asset value adjustment referred to above.

In conjunction with the Acquisitions, the Company is proposing to raise not less than £750,000, before expenses, through the issue of the Placing Shares. Details of the expected use of the proceeds from the Placing are set out in paragraph 2 below. The Placing is conditional upon, inter alia, the Resolutions being passed at the GM and Re-Admission. On Re-Admission, the Company will have a market capitalisation of approximately £1,342,133 million assuming the Placing Price of 0.10 pence per New Ordinary Share. It should be noted that the price at which the Placing will be effected may be at a price other than 0.10 pence per New Share if the Company, Grant Thornton UK LLP and SVS agree.

The Directors are mindful of the recent uncertainty regarding the global and domestic economy. However the Directors are confident that steps to be taken to reduce the Group's cost base will enhance its prospects, alongside the improved service offering that the Enlarged Group will be able to offer to its clients. Accordingly, the Directors believe that the Proposals are fundamental to the future of the Group. The new proposed term loan banking facility and recourse factoring facility referred to in the Admission Document are conditional upon completion of the Acquisitions. The Directors believe that the Group has sufficient working capital for its present requirements after taking account the proposed new term loan banking facility, recourse factoring facility and Placing proceeds. However, if the Placing and Acquisitions were not to proceed and the new term loan banking facility and recourse factoring facility were not obtained, then the Company may not be able to continue as a going concern.

Under the AIM Rules for Companies, the Acquisitions constitute a reverse takeover. Accordingly, the Acquisitions are conditional on the approval by the Existing Shareholders of Resolution 2 at the GM which is being convened for this and other purposes on 14 January 2009 at the offices of Pinsent Masons LLP, CityPoint, One Ropemaker Street, London, EC2Y 9AH. 

If the Resolutions are duly passed at the GM then it is expected that the Enlarged Share Capital will be re-admitted to trading on AIM on 15 January 2009.

The Placing Shares will have the same rights following the Share Capital Reorganisation, as the other Ordinary Shares, including those relating to voting and entitlement to dividends.

2. The Acquisitions

(i) Background and reasons for the Acquisitions

The Directors' strategy for building shareholder value is to become a mid-market UK business research company which the Directors believe will allow the Group to obtain critical mass to compete with larger market participants. To achieve this, the Company has developed a strategy to expand its service offering and sector expertise through a combination of organic and acquisition based growth. The Directors believe that there are currently opportunities for consolidation of UK research companies in the middle market. Recent acquisitions of mid-sized market research companies indicate, in the Directors' view, a trend of consolidation amongst such companies.

The Directors believe that potential targets will benefit from operating within such a group, whilst retaining the flexibility of small-to-medium-sized research consultancies. The Acquisitions are all market research orientated divisions of Illuminas, a subsidiary of Media Square. Viewpoint Field, Viewpoint Studios and The Wire provide qualitative and quantitative data collection services and Respondent recruitment from a broad range of industries. The Directors believe that the Acquisitions meet the Company's acquisition criteria as the Directors believe that they:

● will provide technical and field resources to accommodate elements of the Company's organic growth strategy;

● will deliver economies of scale;

● will extend the breadth of research services offered by the Company and will extend the Group's quantitative market research offering; and

● will allow IQ Research and Rosslyn to utilise their distinct service offerings to cross-sell to the customer bases of Viewpoint Field, Viewpoint Studios and The Wire.

Background regarding Illuminas' Sale of Viewpoint Field, Viewpoint Studios and The Wire

Media Square was established in 2000 and was admitted to AIM in September of that year. Media Square was an acquisitive company, acquiring fifteen different broad-based marketing services businesses from 2003 to the close of 2005.

In November 2007, Media Square stated that it would focus on the provision of high quality marketing communications agency services, concentrating on four core disciplines: advertising, public relations, marketing and design.

Subsequently, Media Square embarked on a restructuring of the entire group in order to streamline its structure and provide a greater focus. In line with this restructuring, Media Square has closed, merged or sold numerous business units.

It was decided that Viewpoint Field, Viewpoint Studios and The Wire were not key elements of this global consulting business. Therefore, in November 2007, the respective Boards of Illuminas and Media Square decided to commence a sales process.

Viewpoint Field and Viewpoint Studios

Viewpoint Field and Viewpoint Studios provide specialist qualitative and quantitative research

solutions, with particular expertise in FMCG, medical, pharmaceutical, B2B, IT, automotive and the children's sectors. The businesses had combined revenue of approximately £3.45 million for the year ended 28 February 2008 (this information refers to past performance. Past performance is not a reliable indicator of future results). Viewpoint Field is one of the UK's largest fieldwork suppliers, specialising in Respondent recruitment and face to face surveys. Viewpoint Studios provides focus group viewing complexes (or 'studios'). Viewpoint Field and Viewpoint Studios have been run as autonomous businesses since they were founded, reflecting distinctions in business models and strategy. However, coordination and an appropriate level of integration between them has been achieved by placing overall management under Gale Blears, who will be employed as Managing Director of Viewpoint

Field Services.

Viewpoint Field

Viewpoint Field was established in 1990 and was originally part of the specialist qualitative research agency Hauck Research Services Limited (subsequently part of Illuminas). Viewpoint Field is a field force recruitment company, which specialises in sourcing and recruiting Respondents, who go on to attend a focus group, or another type of market researching session, such as a Depth Interview. Respondents are incentivised to attend focus groups via financial rewards. In addition to Respondents, Viewpoint Field can also provide suitable freelance moderators, whose role is to oversee focus groups, facilitate discussion and steer the structured conversation away from distracting themes. 

Viewpoint Field aims to offer a quality service, which involves monitoring Respondent lists to ensure that Respondents are not overly familiar with the market research process. They also screen Respondents before accepting them for focus groups, in order to ensure that they are of suitable calibre and will add a meaningful contribution to the discussion. As a result of their screening and high quality Respondents, Viewpoint Field finds itself less likely to have over recruited for focus groups, i.e. booking ten individuals for an eight person focus group to safeguard against poor attendance. Over recruitment can lead to wasted Respondent fees, in instances where surplus individuals are paid for their time even when they do not actually participate in the focus group itself.

In the past year, Viewpoint Field has improved its client relations procedures and has implemented a more in depth 'know your client' programme. Viewpoint Field has an employee who works at the Illuminas offices, who helps to facilitate an efficient bid management process with Illuminas. The Directors believe that there is potential for extending this type of methodology towards use with other significant clients as part of an enhanced client relations programme.

Viewpoint Field has access to over 1,000 interviewers nationwide, including 50 medical interviewers and an in-house telephone unit. Over time, the business has established a position in the market place based on its high quality service and its ability to successfully execute complex, specialist assignments, especially in the financial, medical and pharmaceutical sectors. Viewpoint Field's recruitment activities in these sectors can often involve a finite number of suitable Respondents, meaning that the sourcing and contacting of such Respondents can require specialist recruiters and methodologies. Looking forward, the Directors believe that an opportunity exists to exploit this positioning. Viewpoint Field also provides quantitative face-to-face data collection services. Viewpoint Field operates from a large house in East Molesey, which also houses studios which are used for conducting focus groups as part of Viewpoint Studios' 'Studio' business.

Viewpoint Studios

Viewpoint Studios was established in 1989. The business is based in two locations - East Molesey and Sunbury - both of which are conveniently located near to excellent transport links to central London, major motorways and Heathrow and Gatwick airports. The East Molesey complex includes three air conditioned studios, demonstration kitchens, flexible meeting spaces and access to a large garden. Sunbury has three air conditioned studios and two demonstration kitchens. Both sets of studios are equipped with what the Directors consider to be leading edge technology including wireless broadband, video conferencing, web streaming and facilities where Respondents can evaluate the 'usability' of Internet sites. Viewpoint Studios has had a long-established commitment to quality and service and, to this end, has recently refurbished the studios in East Moseley to a very high standard. Going forward, management has also identified the need for a similar refurbishment of the Sunbury facilities to ensure that it also continues to offer a high level of quality. Viewpoint Studios has recently had success in optimising the utilisation of its studio facilities and has improved occupancy rates and minimised dead time by analysing the usage of its studio resources and encouraging more systematic usage.

The Wire

The Wire is a CATI and online data collection facility. It offers full data processing services, with experience across all industry sectors, B2B and consumer, as well as UK and international markets. The Wire's existing client base is predominantly subcontract business from market research agencies. It has been trading since 1997 and achieved revenues of approximately £2.43 million for the year ended 28 February 2006, which have more recently declined to revenues of approximately £1.28 million for the year ended 29 February 2008 (this information refers to past performance. Past performance is not a reliable indicator of future results). At its peak, The Wire employed over 100 call centre staff. In the period since 2005-2006, The Wire's business suffered from its relatively slow response to the shift by the

industry away from telephone-based data collection to on-line data collection. In addition data

collection agencies were investing in developing proprietary, on-line Panels. Additionally, The Wire's issues were exacerbated by departures of key software development staff at a critical juncture for the business and by not developing online Panels.

Over the past year The Wire has undertaken a number of important strategic actions to reposition the business so that it is more aligned with customer demands in the current competitive environment. The Wire introduced a number of new products and services in late 2006 to serve the increased client demand for online services, including:

● online surveys - hosted on site for competitive pricing;

● switch/mixed mode - as they use the same software platform for CATI and online surveys, it is possible to switch from CATI to online during the telephone call to improve response rates, email visual stimulus material to Respondents, build email databases etc. This technology gives The Wire a competitive advantage as most companies use different software for each data collection method;

● online results and data portal - this allows clients to login 24/7 to see live progress and perform their own analysis on live data;

● panel brokering - clients wanting to use an online panel but not wanting to deal with a new

supplier are given quotations, with all scripting, hosting, and data management provided by The Wire; and

● charting - an automated service saving researchers' time when preparing presentations.

In July 2007, The Wire took advantage of its innovative data collection technology, and replaced its 100 seat call centre with a remote working facility. This allows interviewers to work from home, with quality control being conducted on a centralised basis at The Wire (with quality processes and standards being unaffected). The Directors believe that this gives The Wire a competitive position in the marketplace, given the reduction in property costs associated with this conversion and the potential to recruit interviewers from across the world to interview in different languages without incurring further property overheads per country, or the high cost of international interviewers working from the UK.

Strategic Rationale for the Acquisitions

Acquiring the businesses of Viewpoint Field, Viewpoint Studios and The Wire and aligning these offerings with those of Rosslyn and IQ Research presents, in the opinion of the Directors, a compelling range of data collection services which, the Directors believe will:

● deliver a technology platform potentially saving the Enlarged Group upgrade costs;

● enable IQ Holdings to capture a larger 'slice' of the data collection market, principally

subcontract business from other research-based consultancies although there is also potential to build a 'Field & Tab' data collection service for end client organisations;

● add businesses to the Group, which have the potential for growth as the benefits of the ongoing business development and customer relationship management initiatives bear fruit;

● provide a data collection platform, upon which can be built industry-specific propositions for

relevant end client organisations;

● offer potential for synergies and cost efficiencies as the Acquisitions, IQ Research and Rosslyn are integrated;

● deliver additional senior managers;

● deliver project management capacity to facilitate new business growth;

● the Acquisitions will deliver the ability for remote CATI, thus reducing the need for office space and therefore cutting year-on-year costs; and

● post Completion, the Enlarged Group's emphasis will be on integrating the businesses and

developing research-based consultancy propositions for end client organisations in specified

sectors.

After the acquisition of Viewpoint Field, Viewpoint Studios and The Wire, the Directors believe that the Company will possess a wider range of market research services, with a subcontract client base of other marketing research consultancies. The Directors believe that this broader service capability will allow IQ Holdings to strengthen and extend its capabilities and develop its End Client business. By offering fuller service, research based consultancy to End Client organisations across different sectors and a more comprehensive range of data collection services to other market research agencies, the Directors believe the Enlarged Group will enhance these two revenue streams. Rosslyn will include The Wire, Viewpoint Field and Viewpoint Studios in its 'subcontract' business development and 'Know Your Customer' initiatives, thereby introducing The Wire, Viewpoint Field and Viewpoint Studios to a known customer base, which the Directors believe has been largely untapped by them to date. The

Directors believe that scale is important in order to operate a quantitative research business on a profitable basis. Additionally, the Directors believe that it is important that IQ Holdings is able to deliver a more comprehensive range of services that many larger End Client organisations require.

Viewpoint Field, Viewpoint Studios and The Wire have certain clients which the Directors believe may be willing to pay for fuller services. Further, the Directors believe that Viewpoint Field, Viewpoint Studios and The Wire have the capability to start providing these auxiliary value adding services, due to their experience within the industry and their level of professional interaction with the individuals that currently perform these services. In the case of Viewpoint Studios, such services could involve developing in-house focus group moderation and report drafting and offering these services to its current client base.

The Directors believe that Viewpoint Studios' and Viewpoint Field's profitable studio and field

recruitment businesses will extend the Company's data collection capabilities and client base into other sectors such as retail, healthcare, financial and the public sector (this information refers to past performance. Past performance is not a reliable indicator of future results). The Directors believe that The Wire's technology will be viewed positively by the Enlarged Group's current and future client base.

The Directors believe that by utilising contacts held between the subsidiaries in the Enlarged Group, there is potential for developing a range of B2B Panels, which would be made up of groups of prerecruited Respondents of a defined criteria, who have agreed to participate in regular research in return for financial rewards and other incentives. In line with the Company's focus on conducting research with 'difficult to reach' audiences, the Directors believe that The Wire could develop B2B Panels of individuals who operate in the key industry sectors that IQ Holdings services; for example General Practitioners, IFAs, Corporate Treasurers, Compliance Officers, City Analysts etc.

Supply Agreement

At Escrow Completion, Illuminas will enter into the Supply Agreement with the Company, Viewpoint Field Services and The Wire Services whereby Illuminas is committed to using Viewpoint Field Services and The Wire Services as its preferred suppliers for the provision of online and telephone based quantitative data collection and data processing of research survey responses, field recruitment (for qualitative market research), focus group studio projects and qualitative face to face market research surveys. The Supply Agreement stipulates that Illuminas will use its reasonable endeavours to place a minimum total of £1 million of business with Viewpoint Field Services and The Wire Services in the first year of the Supply Agreement. Illuminas is incentivised to place business over and above the £1 million level, but will not be penalised for not delivering this level of business. Further details of the

Supply Agreement are set out in paragraph 12.9.5 of Part 11 of the Admission Document.

Integration Plans for the Acquisitions

Viewpoint Field and Viewpoint Studios

The Directors believe that Viewpoint Field and Viewpoint Studios will provide IQ Holdings with an ability to extend its data collection capabilities, combined with an extension of its client base across other sectors. Viewpoint Field's profitable field research unit has a different set of clients from those that the Group currently has business relationships with (this information refers to past performance. Past performance is not a reliable indicator of future results). Accordingly, the Directors believe that there is potential for increasing combined revenues through Rosslyn's existing business development and relationship management strategies for winning subcontract business. The Directors believe that it will also offer potential for synergies as the two businesses are integrated.

Viewpoint Field and Viewpoint Studios' research audiences are typically from a wide range of

industries and sectors, but specialise in 'difficult to reach' audiences such as senior executives, finance professionals, Members of Parliament and medical practitioners. This is in line with both IQ Research and Rosslyn and the Directors believe that this will consequently offer potential synergies via reducing the cost of reaching these audiences as an Enlarged Group.

The Wire

The Directors consider The Wire to be a larger, more technologically advanced version of Rosslyn's CATI/online data collection business. The Directors envisage that post Completion, all of Rosslyn's CATI business will be channelled through The Wire, which should generate cost savings in terms of personnel, hardware and software. The Directors anticipate that there will be further cost benefits and potential for increased revenue from the integration of Rosslyn's CATI business. The Wire's charting and switching technology is envisaged by the Directors to offer an opportunity for developing a Field & Tab proposition for direct, End Client business.

The Directors believe that the integration of The Wire will be expedited by the fact that the Group moved into offices in the same building as the offices of The Wire on 14 April 2008. The Company has negotiated a six month rent free period for its occupation of its offices and a 12 month rent free period for The Wire which represents a significant cost saving, which is anticipated to be in the range of £60,000 over this period. The Directors believe that an additional benefit of this co-location is that the IT infrastructure necessary for merging the CATI business of Rosslyn with that of The Wire is already in place.

The Directors hope that additional synergies will be identified that will benefit the Enlarged Group, particularly in IT and financial reporting resource. Three accounting employees and one IT employee will be transferred from Illuminas to the Company as part of the Acquisitions. Additionally, after Completion, the Directors intend to appoint a financial controller, who will be responsible for the Enlarged Group's finance function.

(ii) Principal terms of the Acquisition

The Company, through its wholly owned subsidiaries Viewpoint Field Services and The Wire  Services, has conditionally agreed to acquire the business and assets of Viewpoint Field, Viewpoint Studios and The Wire, for a total consideration of £1,500,000 subject to a net asset value adjustment following the preparation of the Completion Accounts. The Acquisition Agreements dated 9 December 2008 stipulate that an initial consideration of £1,000,000 will be payable on Completion (of which £750,000 will be in cash and £250,000 will be satisfied by the Consideration Shares). The Acquisition Agreements also stipulate that the balance of the consideration will be satisfied by the payment in cash, subject to a net asset value adjustment following the preparation of the Completion Accounts, of £500,000 (subject to the net asset value adjustment as referred to above) in four equal instalments of £125,000 payable 18, 24, 30 and 36 months after Completion. However, subject to the terms of the Acquisition Agreements, the Vendors have the option to receive all or part of the payment of £500,000  (subject to the net asset value adjustment as referred to above) as New Ordinary Shares allotted and issued at the Placing Price. In addition, if the Company receives in excess of £750,000 from the Placing it shall pay any such excess to the Vendors in satisfaction in whole or in part of the deferred consideration of £500,000 (subject to the net asset value adjustment) provided that the Company shall (subject always to the requirement that the Vendors receive not less than 50 per cent. of such excess) be entitled to deduct any costs incurred by the Company in connection with the Placing, the Acquisition Agreements or the Re-Admission. The Acquisition Agreements are conditional, inter alia, on the Existing Shareholders approving certain of the Resolutions at the GM and Re-Admission. 

(iii) Details of the Consideration Shares, the Broker Shares, the New Ordinary Shares to be issued to SVS in respect of fees, the Loan Conversion Shares and the Introducer Shares

The Consideration Shares, the Broker Shares, the New Ordinary Shares to be issued to SVS in respect of fees, the Loan Conversion Shares and the Introducer Shares will be issued credited as fully paid and, immediately following Re-Admission will represent approximately 36.9 per cent. of the Enlarged Share Capital. The Consideration Shares, the Broker Shares, the New Ordinary Shares to be issued to SVS in respect of fees, the Loan Conversion Shares and the Introducer Shares will rank pari passu with the other New Ordinary Shares in all respects, including the right to receive all dividends and other distributions, if any, hereafter declared, made or paid.

(iv) Financial effects of the Acquisition

An unaudited pro forma statement of net assets of the Enlarged Group, prepared for illustrative purposes only, showing the impact of the Acquisitions on the Enlarged Group is set out in Part 10 of the Admission Document.

It is expected that the Acquisitions will result in increased revenues and be earnings enhancing for the Enlarged Group in the year ending 30 September 2009. This statement regarding earnings enhancement is not a profit forecast and should not be interpreted to mean that the earnings per share in the financial year ended 30 September 2008 or any subsequent year will necessarily match or be greater than for any preceding period.

The Placing

(i) Details of the Placing

The Company is proposing to raise not less than £750,000 before expenses pursuant to the Placing. Under the Placing Agreement, SVS has agreed to use its reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price and will conditionally place all of these shares at the Placing Price with institutional and other investors. The obligations of SVS under the Placing Agreement are conditional upon, inter alia, Re-Admission taking place by 8.00 a.m. on 15 January 2009 (or such later date as the Company, Grant Thornton UK LLP and SVS agree, being not later than 31 January 2009). The Placing Agreement contains provisions entitling SVS to terminate the Placing Agreement at any time prior to Re-Admission in certain circumstances. If this right is exercised, the Placing will lapse. The Placing has not been underwritten by SVS.

At a Placing Price of 0.10 pence the Placing Shares will represent approximately 56.6 per cent. of the Enlarged Share Capital following Re-Admission and at that Placing Price, the Enlarged Group will have a market capitalisation of approximately £1.32 million.

The Placing Shares will, on Re-Admission, following the Share Capital Reorganisation, rank pari passu in all respects with the other Ordinary Shares, including the right to receive dividends and other distributions thereafter declared, made or paid.

Following Re-Admission, the interests of the Board, in aggregate, will amount to approximately 4.7 per cent. of the Enlarged Share Capital. Details of the Directors' holdings of Existing Ordinary Shares are set out in paragraph 7 of Part 11 of the Admission Document.

Further details of the Placing Agreement are set out in paragraph 12.8 of Part 11 of the Admission Document.

The figures above assume that the Placing is effected at a price of 0.10 pence per New Share. There is no guarantee that this price will be achieved.

(ii) Use of proceeds

The Company intends to use the net proceeds of the Placing received (estimated to amount to £283,000) as follows:

● to satisfy £283,000 of the cash consideration payable pursuant to the Acquisitions; and

● for working capital purposes £nil.

3. Directors

Timothy Michael Hearley, Non-executive Chairman, aged 66

Tim has an established background in managing and investing in public companies. He was chairman of Rolfe & Nolan Plc until 2003, which is a global provider of financial derivatives software. Tim is currently a non-executive director of Oakdene Homes plc, an AIM quoted property developer, nonexecutive chairman of AIM quoted Vicorp Group plc, a UK software group operating in the telecommunications sector and was formerly executive chairman of Reflec plc, an AIM quoted specialist developer and manufacturer of retro-reflective inks, fabrics, ancillary products and processed powders. Tim has been Chairman of IQ Holdings since February 2005.

Julian Everard Green, Chief Executive Officer, aged 40

Julian is the founder of IQ Research. Prior to this, he was employed by Euromonitor Publications Limited for eight years where he held a number of senior positions including research manager, consultancy manager and business development manager when he was seconded to Chicago, Illinois, USA to set up the consultancy practice. He successfully grew the North American business unit, and built a team of 25 full time analysts. Julian has helped develop close relationships with a number of well respected businesses and has considerable experience delivering and leading significant research projects and initiatives. Julian has been a speaker at the Business Intelligence Group's annual conference and is a graduate from the University of London Goldsmiths College, where he obtained a BA Honours degree in French.

Joachim (Joe) Eberhard Seydel, Executive Director, aged 64

Joe is an executive director of IQ Holdings, and was previously Managing Director of Rosslyn. Joe is responsible for new business development, client service delivery and project execution. He is a marketing and market research specialist with experience across many industrial and consumer sectors, working with major trans-national companies as well as small and medium sized enterprises especially on an international basis. He is an active participant in the research industry and a frequent speaker at industry events and conferences. Joe is Immediate Past Chairman of AIMRI, and a frequent speaker

at ESOMAR and AIMRI conferences and seminars. He is a Freeman of the City of London, a

Liveryman of the Worshipful Company of Marketors and a Full Member of the MRS and ESOMAR.

Neil Grant McGowan, Finance Director, aged 69

Neil Grant McGowan qualified as a chartered accountant in 1965. After a further four years in the profession, he joined The Charterhouse Group as deputy financial controller, subsequently becoming group company secretary and thereafter finance director of its electrical wholesaling subsidiary. During the 1970s Neil was finance director of the Highlands & Islands Development Board. He later joined International Distillers & Vintners Limited, the wine and spirit division of the Grand Metropolitan group of companies, and was finance director from 1984 to 1988. Neil left Grand Metropolitan in 1990 and has since pursued a career acting as part-time finance director to a variety of companies. He is currently finance director of The Weather Lottery plc and Southern Bear plc.

On 25 February 2008, it was announced that Neil had suffered an unforeseen accident. Neil remains unable to carry out his duties, which are being carried out by Peter William Parkinson with the additional support of an external accountancy firm, and so has been unable to participate in the discussions relating to the Acquisitions and takes no responsibility for the Admission Document.

Peter William Parkinson, Interim Finance Director, aged 66

Since Mr McGowan's recent accident, Peter William Parkinson has overseen the responsibilities of finance director. Peter has over 30 years experience in finance and administration in both public and private companies in advertising, film production and music. He is currently Director of Finance and Business Affairs of Handmade PLC a rights ownership, film production, merchandising and licensing company. For 12 years he was a director and company secretary of companies forming the music division of Hemdale Group Limited. For six years he was financial controller and company secretary of the Rayant Group Limited, a company producing documentary films and television commercials. He was Operations Director of Equator Group plc between 1999 and 2006.

Janette Weir, Executive Director, aged 40

Janette Weir joined IQ Research in 2005 from Datamonitor plc, where she was Lead Analyst of Life & Pensions research. Prior to this, she spent four years as Head of UK Financial Services research at McKinsey & Company, specialising in insurance and asset management. She was also responsible for managing the pan-European asset management team and was a member of the asset management and insurance practice. Other positions include Chief Economist at the Association of British Insurers and Economic Adviser at the Department for Work and Pensions. Janette is a graduate in Economics from the University of Sheffield.

Senior Management from the Acquisitions

Gale Blears, Managing Director, Viewpoint Field Services, aged 56

Gale Blears has worked for Viewpoint Studios and Viewpoint Field for eleven years. She is a highly experienced researcher with particular expertise in medical research, one of the key industries served by Viewpoint Field and Viewpoint Studios. She was responsible for designing and creating Viewpoint Field's and Viewpoint Studios' management information system. Post the Acquisitions, Gale will be Managing Director of Viewpoint Field Services.

Kathy Hurst, Managing Director, The Wire Services, aged 37

Kathy started working in market research in 1993 after completing an English degree at North London University. She also worked in television production, advertising and direct marketing agencies prior to going to university. She joined The Wire in 1997 after managing the CATI centre and face-to-face field force of I.F.F Research Limited since 1993. Her experience includes B2B and consumer, domestic and international, and both ad hoc and continuous research across a broad range of industries, particularly Finance, IT and Telecoms. She is an associate member of the MRS and has been the BIG (Business Intelligence Group) Conference Chair since 2006. Post the Acquisitions, Kathy will be Managing Director of The Wire Services.

4. Strategy

The Board believes that the optimum way to build shareholder value is to become a mid-market UK business research company. The Company plans to continue this through both organic growth and selective acquisitions. The two key elements of this strategy are:

● design and build high value research products; and

● make selective acquisitions which will extend the Group's direct client business into new sectors, which are not currently being directly targeted.

As mentioned previously, the Group has developed the first modules of the Life & Pensions Product and the Directors intend to bring further modules to the market during 2008, to serve unique information gaps identified through a consultation process with various industry participants. This product is expected by the Directors to make a significant contribution to revenue and provide a potential source of recurring revenue through product updates and improvements. In pursuing acquisitions, the Directors have approved the following set of criteria that will be utilised to assess other acquisition opportunities. Target companies must:

● deliver immediate economies of scale;

● conduct similar kinds of research in similar sectors to the Group;

● have a business to business focus and be international in scope; and

● extend the Group's range of service offerings.

The Group currently undertakes a portion of market research work overseas. The Directors intend to increase the Group's international focus, particularly in developing countries where higher levels of growth are being experienced.

5. The Market Research Industry

According to a report published in 2007 by ESOMAR, the global research market grew by circa 6.8 per cent. in 2006 to $24.6bn. Approximately two thirds of global market research turnover is generated in the five largest markets, namely USA, UK, France, Germany and Japan. Europe, with a market share of approximately 43 per cent. is the largest, followed by North America with approximately 36 per cent. and Asia Pacific with approximately 14 per cent. 

The 2007 ESOMAR report categorised the UK as having the second largest national market research market in 2006 and the highest level of market research spend per capita out of all of the 75 countries in its global survey in 2006. The UK market was estimated to be approximately $2.4bn in size and has grown at a compound average growth rate of approximately 7 per cent. over the period from 2002 to 2006. Approximately 18 per cent. and 13 per cent. of UK market research turnover is derived from quantitative telephone and online based research methods respectively. UK spending on online market research showed the largest absolute increase in 2006 (almost 90 per cent. growth), when compared with the previous year. Qualitative market research accounted for 12 per cent. of UK market research

turnover. Companies in the financial services sector accounted for 8 per cent. of UK market research spending in 2006. On a global basis, approximately 71 per cent. of total 2006 qualitative market research turnover was derived from 'group discussions', with approximately 16 per cent. being attributed to 'in-depth interviews'.

In 2006, economies within Latin America, Eastern Europe, Asia Pacific and the Middle East

experienced strong levels of growth. The market research industries of new EU members' grew at approximately 9 per cent. in 2006. The 15 countries in the EU prior to its expansion in 2004 grew at approximately 4 per cent. during the same period. Both China and India recorded double digit growth in 2006, approximately 20 per cent. and 16 per cent. respectively. 

A report published in 2005 by ESOMAR highlighted a growing emphasis on the provision of business intelligence and insight rather than pure data collection. However, since this study was published, the industry has seen a number of on-line panels introduced to the market, which in the opinion of the Directors offer cost effective, but generic and untargeted data collection services. Whilst the Directors believe that advances in technology delivered by the Internet have provided a more economic medium for data collection than the telephone or face to face methodologies, the Directors believe that data accuracy is an inherent weaknesses in the 'on-line only' approach.

The Directors believe that research buyers are becoming more sophisticated in their procurement of data and increasingly recognise the limitations of on-line only data collection. The Directors also believe there is an increasing recognition of value associated with data collection services that provide a technologically compatible combination of telephone and on-line data collection. The Directors believe that accurately targeted data collection and field services have become a source of differentiation in the market research industry; the Directors believe that the Target Businesses are experts in this field and that they will enhance the reputation of the Enlarged Group as a full service marketing research provider.

Competition

The Directors are of the view that the principal competition for the Group comes from a relatively small number of organisations. In the Directors' view, the Group does not currently compete extensively with the largest UK market research organisations. These organisations have financial and professional services divisions which target the same client base as the Group, yet specialise, in the Directors' view, in providing large scale survey services.

The Directors consider that the Acquisitions will enable the Enlarged Group to offer an extended range of research services to include larger scale surveys, bringing the Group into more direct competition with the largest market research organisations. The Directors anticipate that the Group should have the potential to offer a cost competitive service when compared with larger competitors. The Directors believe that the development of the Life & Pensions Product will enable the Enlarged Group to develop closer ties with the its core clients and that this may help to diminish the threat of this kind of competition.

Rosslyn performs sub contract work for market research companies, which the Directors believe can to some extent be considered competitors to the Enlarged Group.

The Directors believe that key competitors to The Wire include other telephone and online data collection companies and also the internal data collection units within much larger research-based consultancies.

The Directors consider the key competitors to Viewpoint Field to predominantly include London and home counties based qualitative and quantitative fieldwork services providers, which serve the market research industry via recruiting and interviewing Respondents for surveys and focus groups. The Directors consider Viewpoint Studios' key competitors to include local studio operators, which operate multiple studios and viewing facilities.

6. Financial information

IQ Holdings plc

A summary of the income statement for the Group for the three years ended 30 September 2007 and the unaudited interim results for the six month period ended 31 March 2008 are set out below. The Auditor's report on the Group's financial statements for the year ended 30 September 2007 contained an emphasis of matter paragraph relating to going concern. This summary financial information is an extraction of the financial information set out in Part 3 and Part 5 of the Admission Document:

	Six months ended 31 March 2008 (unaudited) £'000	Year ended 30 September 2007 (audited) £'000	Year ended 30 September 2006 (audited) £'000	23 August 2004 to 30 September 2005 (audited) £'000
Continuing Operations
Revenue	461	418	347	209
Cost of sales	(252)	(106)	(93)	(35)
Gross profit	209	312	254	174
Administrative expenses	(465)	(470)	(433)	(276)
Loss from operating activities	(256)	(158)	(179)	(102)
Net finance expenses	(2)	(3)	(9)	(7)
Loss from continuing operations	(258)	(161)	(188)	(109)

This information refers to past performance. Past performance is not a reliable indicator of future results.

Viewpoint Field and Viewpoint Studios

A summary of the combined carve out income statement for Viewpoint Field and Viewpoint Studios for the year ended 29 February 2008, the two years ended 28 February 2007 and the interim results for the six month period ended 31 August 2008 is set out below (which has been extracted from the accounts of Illuminas using the principles and methods set out in the "Basis of apportionment" in note 1 to the financial information set out in Part 6 of the Admission Document and the "Basis of preparation - apportionment used in these carve out accounts" in note 1 to the financial information set out in Part 8 of the Admission Document). This summary financial information is an extraction of the financial information set out in Part 6 and Part 8 of the Admission Document:

	Six months ended 31 August 2008 (unaudited) £'000	Year ended 29 February 2008 (unaudited) £'000	Year ended 28 February 2007 (unaudited) £'000	Year ended 28 February 2006 (unaudited) £'000
Continuing Operations
Revenue	1,806	3,450	3,170	3,646
Cost of sales	(859)	(1,629)	(1,508)	(1,771)
Gross profit	947	1,821	1,662	1,875
Administrative expenses	(697)	(1,428)	(1,440)	(1,528)
Profit from operating activities	250	393	222	347
Net finance expense	-	-	-	-
Profit before taxation	250	393	222	347
Profit from continuing operations	175	275	155	243

This information refers to past performance. Past performance is not a reliable indicator of future results.

The Wire

A summary of the carve out income statement for The Wire for the year ended 29 February 2008, the two years ended 28 February 2007 and the interim results for the six month period ended 31 August 2008 is set out below (which has been extracted from the accounts of Illuminas using the principles and methods set out in the "Basis of apportionment" in note 1 to the financial information set out in Part 7 of the Admission Document and the "Basis of preparation - apportionment used in these carve out accounts" in note 1 to the financial information set out in Part 9 of the Admission Document). This summary financial information is an extraction of the financial information set out in Part 7 and Part 9 of the Admission Document:

	Six months ended 31 August 2008 (unaudited) £'000	Year ended 29 February 2008 (unaudited) £'000	Year ended 28 February 2007 (unaudited) £'000	Year ended 28 February 2006 (unaudited) £'000
Continuing Operations
Revenue	401	1,275	1,998	2,433
Cost of sales	(254)	(943)	(1,206)	(1,474)
Gross profit	147	332	792	959
Other administrative expenses	(288)	(748)	(850)	(812)
Non-recurring items	-	(155)	-	-
Profit/(loss) from operating activities	(141)	(571)	(58)	147
Net finance expense	(2)	(4)	(4)	(5)
Profit/(loss) before taxation	(143)	(575)	(62)	142
Profit/(loss) from continuing operations	(100)	(403)	(43)	99

This information refers to past performance. Past performance is not a reliable indicator of future results.

7. Current trading and prospects for the Group and the Target Businesses

Current Trading and Prospects for the Group

The Directors believe that the Group is well placed to increase its revenues and to exploit market opportunities that may arise following the Acquisitions. The Group was loss making for the six months ended 31 March 2008 and has continued to be loss making since this date.

Current Trading and Prospects for IQ Research

IQ Research achieved flat sales over the first six months of the year, reflecting the investment of management time in completing the Rosslyn acquisition and further refining the design of the Life & Pensions Product. In addition to this, senior management time was consumed in the delivery of projects, rather than in the execution of new business development initiatives. IQ Research's unaudited management accounts show it to be loss making for the 12 months ended 30 September 2008 (this information refers to past performance. Past performance is not a reliable indicator of future results). IQ Research's unaudited sales for the month of October 2008 were above its internal forecasts (this information refers to past performance. Past performance is not a reliable indicator of future results).

However, during this period IQ Research recruited a second expert in the life and pensions field to its financial services team. The Directors believe that this will help to deliver projects and will enable senior management to focus on client relationships and business development. IQ Research has recently received financial commitments from six life and pensions providers to further develop the Life & Pensions Product, by generating sales orders worth £60,000 (this information refers to past performance. Past performance is not a reliable indicator of future results) to fund the module 'New Opportunities for Guaranteed Products'.

Current Trading and Prospects for Rosslyn

Rosslyn has experienced a positive year, with its unaudited management accounts showing an uplift in sales activity in the 12 months to 30 September 2008, when compared with its audited revenue for the previous year. Additionally, Rosslyn's unaudited sales for the month of October 2008 were above its internal forecasts (this information refers to past performance. Past performance is not a reliable indicator of future results). The Directors consider Rosslyn's recent performance to be encouraging and feel that its future prospects are good, as a result of a consistent demand for requests for quotations ("RFQs"). Rosslyn's unaudited management accounts show a break even operating profit for the 12 months ended 30 September 2008, which can be compared with an audited operating loss of approximately £286,000 for the 12 months to 30 September 2007 (this information refers to past performance. Past performance is not a reliable indicator of future results).

Moving forward, the Directors believe that the analysis of the level of RFQs and quotations will form the basis of a key performance indicator for Rosslyn. Rosslyn has received RFQs from German and Belgian companies, requiring international research and data collection. This has been in addition to a recently completed assignment for a US based market research company. The Directors view this as being positive, since international research and data collection are seen by them as being important to Rosslyn's service proposition.

Since the acquisition of Rosslyn in November 2007, the Directors have implemented a dedicated customer relationship management and business development programme, designed to establish and cement relationships with individuals who procure data collection services. This is having an impact resulting in an increase in the levels of RFQs received by Rosslyn which, in turn, increases the amount of work it tenders for. Business development initiatives have generated RFQs from six new potential clients for Rosslyn since initiation. The Directors intend to extend this type of business development approach in the near future as part of the continued Group cross selling and integration schemes.

Current Trading and Prospects for Viewpoint Field and Viewpoint Studios

The combined trading of Viewpoint Field and Viewpoint Studios for the six months to 31 August 2008 has been more profitable than the equivalent period for the previous year (this information refers to past performance. Past performance is not a reliable indicator of future results). Viewpoint Field and Viewpoint Studios are project-based businesses and thus can undergo month-on-month variation. 

Current Trading and Prospects for The Wire

The unaudited management accounts for The Wire continue to record significant losses - a cumulative operating loss of £141,000 for the six months to 31 August 2008 compared to a budgeted loss of £30,000 (this information refers to past performance. Past performance is not a reliable indicator of future results). This trading performance is expected to improve over the course of the year. As with Viewpoint Field and Viewpoint Studios, The Wire is a project-based business and thus can undergo month-on-month variation.

8. Share Option Scheme

In order to retain and motivate key employees, the Company proposes to adopt a Share Option Plan under which both tax-favoured Enterprise Management Incentive (EMI) and ordinary unapproved share options can be granted. The total number of Ordinary Shares which shall be subject, following Re-Admission, to the proposed Share Option Plan will not exceed 10 per cent. of the Enlarged Share Capital. It is intended that the options granted under the Share Option Plan will not be exercisable at a price lower than the Placing Price and that the exercise price of the options to be granted initially will be at a premium to the market value of the underlying Ordinary Shares. Details of the proposed Share Option Plan are set out in paragraph 14 of Part 11 of the Admission Document.

9. 2008 Warrants

Conditional upon the Resolutions being passed and on Re-Admission, the Company intends to grant the 2008 Warrants pursuant to the 2008 Warrant Instrument, further details of which are set out in paragraph 7.4 of Part 11 of the Admission Document. Details of the 2007 Warrants can be found in paragraph 7.3 of Part 11 of the Admission Document. The 2008 Warrants will not be admitted to trading on AIM.

10. Dividend policy

The Directors currently intend to devote the Company's cash resources to its operations and therefore do not anticipate paying dividends in the short to medium term future. They will reconsider the Company's dividend policy as and when the Company is in a position to pay dividends. The declaration and payment by the Company of any dividends will depend on the results of the Company's operations, its financial condition, cash requirements, future prospects, profits available for distribution and other factors deemed to be relevant at the time.

11. Re-Admission

Application will be made to the London Stock Exchange for the Enlarged Share Capital to be readmitted to trading on AIM. It is expected that Re-Admission will become effective and dealings in the Enlarged Share Capital will commence on AIM at 8.00 a.m. on 15 January 2009.

12. Lock-in arrangements

The Directors entered into lock-in and orderly market deeds with SVS, Grant Thornton UK LLP and the Company on 29 November 2007. Under the terms of these arrangements, each of the Directors undertook not to sell or dispose of any of their Existing Ordinary Shares other than in certain specified circumstances, for a period of 12 months following Admission and thereafter for a further period of twelve months only to sell or dispose of such Existing Ordinary Shares with the consent of and through the Company's broker so as to preserve an orderly market in the Existing Ordinary Shares. The terms of these agreements are described more fully in paragraph 12.14 of Part 11 of the Admission Document.

The Vendors, Julian Everard Green, John Christopher Green and Listbasis Limited have entered into lock-in and orderly market arrangements in respect of all of their shareholdings, the terms of which are described more fully in paragraphs 12.15, 12.27 and 12.31 of Part 11 of this Admission Document.

Under the terms of these arrangements, Julian Everard Green, John Christopher Green, Listbasis Limited and the Vendors have conditionally agreed not to sell, transfer or otherwise dispose of any Existing Ordinary Shares or New Ordinary Shares held by them, other than in certain specified circumstances, for a period of 12 months following Re-Admission. Julian Everard Green, John Christopher Green and Listbasis Limited have also undertaken that for a further 12 months from the first anniversary of Re-Admission they will only sell or otherwise dispose of any Existing Ordinary Shares or New Ordinary Shares held by them with the prior consent of Grant Thornton UK LLP and SVS, such consent not to be unreasonably withheld, for as long as SVS remains the broker to the Company and Grant Thornton UK LLP remain Nominated Adviser to the Company. In addition, prior to making any transfer of any interest in any Existing Ordinary Shares or New Ordinary Shares held by them during the second 12 month period following Re-Admission, they shall, if required by SVS and/or Grant Thornton, require that the transferee enter into a deed in a form acceptable to each of SVS and/or Grant Thornton persuant to which the transferee agrees to be bound by the unexpired term of the lock-in and orderly market deed dated 9 December 2008. The Vendors have also undertaken that for a further 12 months from the first anniversary of Re-Admission they will not sell or otherwise dispose of any Existing Ordinary Shares or New Ordinary Shares held by them unless they have first offered any such Existing Ordinary Shares or New Ordinary Shares for sale through SVS for a period of three months commencing on the date of notification to SVS of the proposed disposal and thereafter if not sold by SVS may be sold through the Vendor's preferred broker.

The lock-in arrangements outlined above will apply in respect of 353,893,750 Ordinary Shares representing approximately 26.7 per cent. of the Enlarged Share Capital of the Company on Re-Admission.

13. General Meeting

Set out at the end of the Admission Document is a notice convening the GM to be held at the offices of Pinsent Masons LLP, CityPoint, One Ropemaker Street, London, EC2Y 9AH at 10.00 a.m. on 14 January 2009. The terms of the Resolutions are set out in that notice.

14. Recommendation

Your Board considers the terms of the Proposals to be fair and reasonable and in the best interests of the Company and the Existing Shareholders and unanimously recommends that all Existing Shareholders vote in favour of the Resolutions as the Directors have irrevocably undertaken so to do in respect of their own beneficial holdings, amounting to 17,993,482 Existing Ordinary Shares, representing 20.82 per cent. of the Existing Issued Ordinary Share Capital.

DEFINITIONS

"2006 Act"	the Companies Act 2006;
"2007 Warrants"	the warrants issued on 28 November 2007 to subscribe for shares in the capital of the Company pursuant to the 2007 Warrant Instrument, the principal terms of which are summarised in paragraph 7.3 of Part 11 of the Admission Document;
"2007 Warrant Instrument"	the warrant instrument entered into by the Company dated 29 October 2007, the principal terms of which are summarised in paragraph 7.3.2 of Part 11 of the Admission Document;
"2008 Warrants"	the proposed grant of warrants to subscribe for 50,000,000 Ordinary Shares pursuant to the 2008 Warrant Instrument, the principal terms of which are summarised in paragraph 7.4 of Part 11 of the Admission Document;
"2008 Warrant Instrument"	the warrant instrument proposed to be entered into by the Company on Re-Admission, the principal terms of which are summarised in paragraph 7.6 of Part 11 of this Admission Document;
"Acquisitions"	the acquisition by the Company's wholly owned subsidiary Viewpoint Field Services Limited ("Viewpoint Field Services") of the businesses known as Viewpoint Field and Viewpoint Studios and the acquisition by the Company's wholly owned subsidiary The Wire Services (UK) Limited ("The Wire Services") of the business known as The Wire, pursuant to the Acquisition Agreements;
"Acquisition Agreements"	the Viewpoint Acquisition Agreement and the Wire Acquisition Agreement;
"Act"	the Companies Act 1985, as amended;
"Admission"	the admission of the Company's Share Capital to trading on AIM on 29 November 2007;
"Admission Document"	the document dated 9 December 2008 to be sent to Existing Shareholders in connection with the Proposals
"AIM"	the AIM market of London Stock Exchange plc;
"AIM Rules for Companies"	the rules and responsibilities in relation to companies whose securities are admitted to trading on AIM published by the London Stock Exchange (as amended) from time to time;
"AIM Rules for Nominated Advisers"	the rules of the London Stock Exchange which set out the eligibility, on-going obligations and certain disciplinary matters in relation to nominated advisers published by the London Stock Exchange (as amended) from time to time;
"Board" or "Directors"	the board of directors of the Company comprising the directors whose names are set out on page 11 of the Admission Document;
"Broker Shares"	the 77,500,000 New Ordinary Shares to be issued to SVS pursuant to the terms of the Placing Agreement;
"Code"	the City Code on Takeovers and Mergers issued on behalf of the Panel on Takeovers and Mergers pursuant to Part 28 of the 2006 Act;
"Combined Code"	the Principles of Good Governance and Code of Best Practice published in June 2006 by the Financial Reporting Council;
"Completion"	completion of the Acquisitions and Placing in accordance with the terms of the Acquisition Agreements and Placing Agreement respectively;
"Completion Accounts"	the balance sheets and profit and loss accounts of the Target Businesses to be prepared as at the date of Escrow Completion in accordance with the terms of the Acquisition Agreements;
"Consideration Shares"	the 250,000,000 New Ordinary Shares to be allotted and issued to the Vendors at the Placing Price pursuant to the Acquisition Agreements;
"CREST"	the relevant system (as defined in the CREST Regulations) in respect of which CRESTCo is the Operator (as defined in the CREST Regulations) in accordance with which securities may be held and transferred in uncertificated form;
"CRESTCo"	Euroclear UK & Ireland Limited, a company incorporated under the laws of England and Wales and the operator of CREST;
"CREST Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755);
"Current Articles"	the existing articles of association of the Company;
"Deferred Shares"	subject to the passing of Resolution 1, non-voting deferred shares of 0.01 pence each in the capital of the Company;
"Enlarged Share Capital"	the 1,324,133,432 issued New Ordinary Shares on Re-Admission;
"Enlarged Group"	the Company and all its subsidiaries following Re-Admission;
"Escrow Completion"	completion of the Acquisition Agreements subject, inter alia, to Re-Admission;
"Existing Issued Ordinary Shares"	the 86,426,760 Existing Ordinary Shares in issue at the date of the Admission Document being the entire issued ordinary share capital of the Company prior to the issue of the New Shares;
"Existing Ordinary Shares" or "Shares"	the ordinary shares of 0.4 pence each in the capital of the Company;
"Existing Shareholders"	holders of the Existing Issued Ordinary Shares;
"Form of Proxy"	the form of proxy to be used by holders of Existing Ordinary Shares in connection with the GM;
"FSA"	the Financial Services Authority of the United Kingdom;
"FSMA"	the Financial Services and Markets Act 2000 of the United Kingdom (as amended);
"GM"	the general meeting of the Company to be held at 10.00 a.m. on 14 January 2009;
"GM Notice"	the notice convening the GM set out on pages 174, 175, and 176 of the Admission Document;
"Grant Thornton UK LLP" or "Nominated Adviser"	Grant Thornton UK LLP (a limited liability partnership registered in England and Wales whose principal place of business is Grant Thornton House, Melton Street, Euston Square, London NW1 2EP and which is the UK member firm of Grant Thornton International) which is authorised by the FSA to carry on investment business;
"Group"	the Company and its subsidiaries as at the date of the Admission Document;
"HMRC"	Her Majesty's Revenue & Customs;
"IQ Holdings" or the "Company"	IQ Holdings plc;
"IFRS"	International Financial Reporting Standards;
"Illuminas"	Illuminas Limited, a wholly owned subsidiary of Media Square, incorporated in England and Wales with registration number 4273580;
"Introducer"	Listbasis Limited, a company beneficially owned and controlled by John Christopher Green, a consultant to the Company;
"Introducer Shares"	the 50,000,000 New Ordinary Shares to be issued to Listbasis Limited (trading as C F Consultants) pursuant to the terms of a letter of agreement between Listbasis Limited (1) and the Company (2) dated 9 December 2008;
"IQ Research"	IQ Research Limited;
"Loan Conversion Shares"	the New Ordinary Shares to be issued to Julian Everard Green as set out in paragraph 12.29 of Part 11 of the Admission Document
"London Stock Exchange"	London Stock Exchange plc;
"Media Square"	Media Square Plc incorporated in England and Wales with registration number 4006884;
"Net Proceeds of the Placing"	the gross proceeds of the Placing less the total anticipated costs and expenses of the Acquisitions, Placing and Re-Admission;
"New Articles"	the articles of association of the Company proposed to be adopted at the GM;
"New Ordinary Shares" or "Ordinary Shares"	subject to the passing of Resolution 1, the ordinary shares of 0.01 pence each in the capital of the Company;
"New Shares"	the Placing Shares, Consideration Shares, Broker Shares, the shares being issued to SVS in respect of fees, the Introducer Shares and the Loan Coversion Shares being in aggregate 1,237,706,672 New Ordinary Shares;
"Official List"	the Official List of the United Kingdom Listing Authority;
"Placees"	those persons subscribing for Placing Shares pursuant to the Placing;
"Placing"	the proposed placing by SVS on behalf of the Company of the Placing Shares with institutional and other investors at the Placing Price pursuant to the terms of the Placing Agreement;
"Placing Agreement"	the conditional agreement dated 9 December 2008 between the Company (1), the Directors (excluding Neil Grant McGowan) (2), John Christopher Green (3), SVS (4) and Grant Thornton UK LLP (5) relating to the Placing, as described in paragraph 12.8 of Part 11 of the Admission Document;
"Placing Price"	0.10 pence per Placing Share or such other price as the Company, Grant Thornton UK LLP and SVS may agree;
"Placing Shares"	the New Ordinary Shares to be allotted and issued by the Company pursuant to the Placing, following the Share Capital Reorganisation to raise not less than £750,000 (before expenses), being 750,000,000 New Ordinary Shares at a Placing Price of 0.10 pence;
"PLUS Markets"	a market operated by PLUS Markets Group plc, being a prescribed market under Section 118 of FSMA, and authorised and regulated by the FSA;
"Proposals"	the Share Capital Reorganisation, Acquisitions, the Placing, the adoption of the Share Option Plan, the adoption of the New Articles and the granting of the 2008 Warrants;
"Prospectus Rules"	the rules made for the purposes of Part VI of FSMA in relation to offers of securities to the public and admission of securities to trading on a regulated market;
"Re-Admission"	the re-admission of the Enlarged Share Capital to trading on AIM becoming effective in accordance with the AIM Rules for Companies;
"Registrar"	SLC Registrars Limited;
"Regulatory Information Service Provider" or "RIS"	a regulatory information service provider that is approved by the FSA;
"Resolutions"	the resolutions set out in the GM Notice;
"Rosslyn"	Rosslyn Research Limited, a wholly owned subsidiary of the Company;
"Shareholders"	holders of New Ordinary Shares;
"Share Capital Reorganisation"	the proposed share capital reorganisation including the sub-division of the share capital of the Company and the creation of the Deferred Shares to be effected by Resolution 1;
"Share Option Plan"	the proposed share option scheme, which will allow the grant of share options to the employees of the Enlarged Group, details of which are set out in paragraph 14 of Part 11 of the Admission Document;
"Supply Agreement"	the conditional agreement to be entered into at Escrow Completion between the Company (1), Viewpoint Field Services (2), The Wire Services (3) and Illuminas (4), relating to Viewpoint Field Services and The Wire Services supplying Illuminas with quotations for all of Illuminas' relevant requirements for market research and data collection services and becoming Illuminas' preferred supplier for such services. A summary of the principal terms of the agreement is set out in paragraph 12.9.5 of Part 11 of the Admission Document;
"SVS" or "Financial Adviser and Broker"	SVS Securities plc, the financial adviser and broker, which is authorised by the FSA to carry on investment business;
"Takeover Panel"	the Panel on Takeovers and Mergers in the United Kingdom;
"Target Businesses"	the business and assets of the businesses of Viewpoint Field, Viewpoint Studios and The Wire;
"The Wire"	a business division of Illuminas, which specialises in computer assisted telephone interviewing and on-line quantitative data collection;
"The Wire Services"	The Wire Services (UK) Limited, a wholly owned subsidiary of the Company;
"Transitional Services Agreement"	the conditional agreement to be entered into at Escrow Completion between The Wire Services (1) Viewpoint Field Services (2) Illuminas (3) and the Company (4) relating to the provision of certain services to The Wire Services and Viewpoint Field Services for a transitional period following the completion of the Acquisition. A summary of the principal terms of which is set out in paragraph 12.9.6 of Part 11 of the Admission Document;
"UK" or "United Kingdom"	United Kingdom of Great Britain and Northern Ireland;
"UKLA" or "United Kingdom Listing Authority"	the FSA acting in its capacity as the competent authority for the purposes of Part VI of FSMA;
"VAT"	value added tax;
"Vendors"	Illuminas and Media Square who have each agreed to sell the relevant Target Business pursuant to the terms of the Acquisition Agreements;
"Viewpoint Acquisition Agreement"	the conditional agreement for the acquisition by the Company's wholly owned subsidiary, Viewpoint Field Services, of the businesses known as Viewpoint Field and Viewpoint Studios, a summary of the principal terms of which are set out in paragraph 12.9 of Part 11 of the Admission Document;
"Viewpoint Field"	a business division of Illuminas, which specialises in Respondent recruitment and face to face surveys;
"Viewpoint Field Services"	Viewpoint Field Services Limited, a wholly owned subsidiary of the Company;
"Viewpoint Studios"	a business division of Illuminas, which specialises in the provision of studio facilities for focus groups;
"Wire Acquisition Agreement"	the conditional agreement for the acquisition by the Company's wholly owned subsidiary, The Wire Services, of the business known as The Wire a summary of the principal terms of which is set out in paragraph 12.10 of Part 11 of the Admission Document;
"£" or "Pounds Sterling"	the lawful currency of the United Kingdom.

 

GLOSSARY OF TECHNICAL AND COMMERCIAL TERMS

"AIMRI"	Alliance of International Marketing Research Institutes;
"B2B "	business-to-business;
"CATI"	Computer Assisted Telephone Interviewing - a telephone interviewing technique where an interviewer is assisted by software, which guides the interviewer through the appropriate route through a structured questionnaire;
"Depth Interview"	an unstructured interviewing technique used by market researchers to probe for understanding of complex or sensitive issues which can be conducted in person or via the telephone;
"End Client(s)"	the ultimate sponsor of research projects which are contracted to research-based consultancies, which may then be further subcontracted;
"ESOMAR"	European Society for Opinion and Marketing Research - although its origins were originally European, ESOMAR is a global organisation, which is focused on enabling better research into markets, consumers and societies;
"Field & Tab"	a data collection service where a market research organisation conducts the field work element of a project and collects data. The market research organisation then performs data manipulation and basic analysis, so that the data is delivered to the client in tables. The client is responsible for designing the questionnaire, defining the sample population to be researched, interpreting the findings and drafting reports;
"FMCG"	Fast Moving Consumer Goods - goods which are purchased frequently, at high volumes and at relatively low cost;
"IFA"	an Independent Financial Adviser - which provide individuals with tailored, suitable advice regarding which financial products suit their personal requirements and risk outlook;
"INMAR"	International Network of Marketing Research Consultants;
"IT"	Information Technology;
"Life & Pensions Product"	a modular research product, designed and being produced by IQ Research for end clients in the life and pensions industry;
"MRS"	Market Research Society (in the UK);
"Panel(s)"	a market research resource comprising a pre-selected and remunerated research audience to which clients can place questions for a fee paid to the panel provider;
"Respondent(s)"	an individual or organisation from which data is collected during the market research process;
"VoIP "	Voice over Internet Protocol - a general term for technologies that allow telephone calls (which would have traditionally have been carried over conventional switched telephone networks) to be made over computer networks, such as the Internet.

 

  

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