16th May 2007 07:01
Multi Group PLC16 May 2007 Multi Group Plc ("Multi" or "Company") Acquisition of Dream Group Limited Placing of 16,000,000 Ordinary Shares of 10 pence each at 25 pence per share Change of name to Servoca Plc Share Consolidation Change of Directors The directors of Multi are pleased to announce that the Company has today agreedto acquire 99.97% of the issued share capital of Dream Group Limited ("Dream")(the "Acquisition"). This follows an announcement by the Company on 10 November2006 that it was in discussions regarding a potential acquisition which would,if successful, constitute a reverse under the AIM Rules. Dream is a private company that specialises in providing outsourced solutions tothe policing sector & has enjoyed particular success in providing solutions tothe majority of UK police constabularies. In addition to providing outsourcing,Dream also provides recruitment solutions to the Education & Healthcare sectors. The Company is also pleased to announce a significant strengthening of its boardwith the appointment of Bob Morton, a successful entrepreneur with substantialpublic company experience who is currently Chairman of a number of other publiccompanies including Armour Group, Harrier Group, Tenon Group, Lorien Plc and StPeter Port Capital Limited, and John Foley, another successful public companydirector who until recently served as CEO of Maclellan Group plc until itssuccessful disposal to Interserve Plc in 2006 for £120 million, to the roles ofNon Executive Chairman and Non Executive Director respectively. The Company is further pleased to announce that it has received excessive demandfor an attendant fund raising. The Company now proposes to raise £4 million,before expenses, through a placing of 16,000,000 Ordinary Shares of 10 penceeach at a price of 25 pence per share. The proceeds of the placing will be usedto provide working capital for the expansion of the company's outsourcingcapability, whilst also meeting the expenses of the transaction, paying down aproportion of Dream's existing indebtedness. Related Matters Under the AIM Rules, the Acquisition is classified as a reverse take-over and asa consequence requires the approval of shareholders in general meeting. It isalso considered to be a transaction with a related party. As part of the proposals the Company is intending to simplify its sharestructure and provide a more appropriate share price on AIM by consolidatingevery one hundred ordinary shares of 0.1 pence each (0.1p Ordinary Shares") intoone ordinary share of 10 pence ("10p Ordinary Shares"). In addition, the Company is proposing to apply to the Court for consent totransfer the balance on its share premium account and capital redemption reserveaccount to its profit and loss account so that , at a suitable point in thefuture the Company may declare dividends. In order to retain and reward key staff and to attract other successfulexecutives the Company proposes to adopt certain employee incentive arrangementsupon completion of the transaction. It is also intended that the Company's name be changed to Servoca Plc andanticipated that the enlarged share capital of Servoca Plc will be admitted totrading on AIM following approval of the proposals at the EGM to be held on 7June 2007. Further Information - on Dream Dream currently has three main divisions; Education Dream Education is a contract teacher placement agency, sourcing teachers mainlyfrom overseas countries, such as South Africa, Jamaica and Canada, and placingthem into UK schools on long-term contracts. The division's clients are eitherlocal education authorities or the schools themselves. Dream Education hasqualified for the Department for Education and Skills Kite Mark of Quality. Healthcare The principal focus of the healthcare division is the supply of qualified socialworkers to local authorities. Candidates are drawn both from the UK and fromestablished contacts in the overseas countries referred to above. In addition Dream Medical is a PASA approved supplier under the nationalframework agreement governing the supply of allied health professionals, such asphysiotherapists, occupational therapists and pharmacists, to the NHS. Solutions (formerly Dream Policing Support) For a number of years, Dream Solutions has offered a range of support servicesto police forces within the UK. These include managed projects, training,investigation and resourcing and the business has grown to become a leadingprovider of training and managed project solutions. Managed Projects: This encompasses the preparation of detailed reports and theprovision of consultancy support for police forces to assist in improving theefficacy of the service being delivered by the Police Service to the public.This area also includes certain outsourced projects such as the review of coldcases and a contract for a regional government department to investigate childprotection allegations. Training: A significant proportion of the Solutions division's revenue comesfrom the writing and provision of training courses. Dream Solutions has nowdelivered training to senior detectives from every region within the UK and to anumber of other organisations involved in investigations within local, centraland regional government. The business has built up a significant portfolio ofspecialist courses and a number of additional courses are currently underdevelopment for release in 2007 and 2008. Investigation: Dream Solutions has established a reputation for assisting thepolicing sector in both live and historic investigations. Services provided todate have included assistance with major murder investigations, the mentoring ofsenior investigating officers and provision of specialist investigation teamsfor Public and other Inquiries. Resourcing: Dream has built up a national database of retired police officersand other policing professionals. Candidates drawn from this database aresupplied on a temporary basis, either singly or as a part of a team, to work onspecific enquiries or to provide particular skill sets. The Solutions divisionis also able to supply permanent recruitment services or to assemble full teamsto handle outsourced historical and current investigations. It is the Dream management's intention to widen the range of services offered bythe Solutions division and to pursue the provision of its services either onmulti year contracts or an outsourced basis. - on Board Changes Upon Admission it is intended that Oliver Cooke will step down from the role ofExecutive Chairman and that Darren Browne, Dream's CEO who has many years ofexperience in the outsourcing and recruitment sectors, will join the board asChief Executive Officer to lead the Company through the next phase of itsdevelopment. Two other Dream executives, Tony Rogers, a former Assistant Chief Constable forthe South Wales Police who heads up Dream's Solutions Division, and Miles Davis,Dream's Managing Director will also join the board as Executive Directors. It is also intended that Janet Barn and David Marks will resign from the boardupon Admission and as referred to above that Bob Morton be appointed asNon-executive Chairman of the Company and John Foley be appointed as aNon-Executive Director. -on the Terms of the Acquisition Multi is proposing to acquire 99.97 per cent. of the issued share capital ofDream for a consideration of £4.46 million to be satisfied by the issue to thevendors of 17,839,944 10p Ordinary Shares at a price of 25 p per share. Dreamis expected to have indebtedness of approximately £1.04 million and as such theoverall cost to Multi of the Acquisition will be £5.5 million. The balance 0.03per cent. of Dream's share capital is owned by shareholders with whom Dream haslost contact. - on the Historic Financial Performance of Dream In the year ended 31 January 2007, Dream reported turnover of £8.14 million anda loss before taxation of £246,000, after fully writing off some £297,000 ofexceptional items and other historic costs connected with the establishment ofits rapidly developing Policing Support Division. At the year end Dream had netliabilities of £2.3 million, the vast majority of which have been expungedthrough a conversion into equity ahead of the company's acquisition by Multi. - on Proposed Directors Service Agreements As required by the AIM Rules the principal terms of the proposed directors'service contacts can be summarised as follows. Darren Browne has entered into a service agreement conditional on Admission.The terms of the service agreement include, amongst others: (i) salary of£175,000 per annum (ii) a bonus of up to 75 per cent. of salary per year to bedetermined by the Remuneration Committee having regard to the achievement oftargets for the financial year (iii) terminable on 12 months' notice by eitherparty (iv) 30 days' holiday per annum (v) up to 12 months' sick pay at fullsalary less the amount of any statutory sick pay (vi) employer's pensioncontributions of £12,000 per annum (vii) benefits package including privatemedical insurance and life assurance cover (viii) car allowance of £12,000 perannum. Following termination of the agreement, Mr Browne will be subject to anumber of restrictive covenants. The Company has appointed Bob Morton, conditional on Admission, as anon-executive director of the Company and the terms of his appointment shallinclude, amongst others no entitlement to any director's fee and the appointmentbeing terminable by either party giving three months' notice or summarily by theCompany if Mr Morton is, among other things, unable to perform his duties to thereasonable satisfaction of the Board. The Company has appointed John Foley, conditional on Admission, as anon-executive director of the Company and the terms of his appointment shallinclude, amongst others (i) a time commitment of not more than 2 days per monthor otherwise as agreed between Mr Foley and the Board (ii) a director's fee of£20,000 per annum and (iii) the appointment being terminable by either party onthree months notice or summarily by the Company if Mr Foley is, among otherthings, unable to perform his duties to the reasonable satisfaction of theBoard. Tony Rogers entered into a service agreement with Dream on 1 January 2007. Thisservice agreement will remain in force following Admission. On 15 May 2007, MrRogers and Multi entered into a side letter conditional on Admissionincorporating into his service agreement a requirement that he comply withMulti's share dealing code. The terms of the service agreement as amended bythe Side Letter include, amongst others, (i) salary of £80,000 per annumtogether with a director's fee of £12,000 per annum for acting as an executivedirector of the Company (ii) a bonus based on his performance as measuredagainst key performance indicators as set by the board of directors of Dream,which shall not exceed £12,000 per annum (iii) commission paid in accordancewith terms determined by the Board (iv) terminable on twelve months notice byeither party (v) 30 days' holiday per annum (vi) up to 3 months' sick pay in any12 month period (vii) private medical insurance (viii) company car and expensesassociated with that car payable by the Company. Following termination of theagreement, Mr Rogers will be subject to a number of restrictive covenantsconditional upon, and with effect from Admission. On 15 May 2007, Miles Davis entered into a service agreement with the Company asan executive director of Multi with effect from Admission. The terms of theservice agreement include, amongst others: (i) salary of £88,000 per annum (ii)a bonus at the absolute discretion of the Remuneration Committee (iii)terminable on not less than 12 months written notice by either party (iv) 30days' holiday per annum (v) up to 6 months sick pay in any 12 month period (v)employer's pension contribution of £1,000 per month (vii) private medicalinsurance for Mr Davis and his family (viii) car allowance of £12,000 per annum. The contract contains detailed confidentiality provisions and followingtermination of the agreement Mr Davis will be subject to a number of restrictivecovenants. Admission Document and Trading on AIM A circular containing details of the Acquisition and convening an extraordinarygeneral meeting of the Company to be held on 7 June 2007 has been sent toshareholders and can be viewed on the Company's website, www.multiplc.com Trading in the Company's shares on AIM will resume today. For Further Information: Multi Group Plc 08701 602 901 Blue Oar Securities Plc* William Vandyk, Shane Gallwey 020 7448 4400 Blue Oar Securities was formerly Corporate Synergy and acts as Nominated Adviserand Broker to the Company. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Servoca