26th Nov 2007 07:01
Zamano PLC26 November 2007 26 November 2007 zamano Plc ("zamano" or the "Company" or the "Group") Acquisition of Red Circle Technologies Limited ("Red Circle") and Admission of the Enlarged Share Capital to trading on AIM and IEX The Board of zamano Plc, a leading provider of digital entertainment to mobiledevices, is pleased to announce that it has conditionally agreed to acquire theentire issued share capital of Red Circle for Consideration of up to €24.4million. Highlights •Red Circle is a successful, Dublin-based, leading provider of digital entertainment to mobile devices, with over 500,000 active subscribers in the UK, Australia, USA and Ireland. •Red Circle generated revenues, restated under IFRS, of €31.1 million in the year ended 31 May 2007, delivering EBITDA of €3.5 million and profit after tax of €3.3 million. •The Acquisition will expand zamano's suite of mobile brands serving a range of demographics in four separate geographic markets, and treble the active subscriber base. •The Board believes that the acquisition provides zamano with significantly increased scale in the UK, Ireland and Australia and that the emerging presence in the strategically important US market represents a strong opportunity for further expansion for the Enlarged Group. •The Acquisition is in line with the Group's strategy of balancing strong organic growth with strategic acquisitions and maintaining a hybrid B2B:B2C business model. The acquisition strengthens the Group's B2C presence in the core UK and Ireland market to match the existing strong positioning of its B2B business in this market. •The Board expects pre-tax cost savings of at least €500,000 per annum will be generated once the full benefits of the Acquisition are realised. These benefits will be off-set in year one by certain integration costs of combining the two businesses. •The maximum total consideration payable of €24.4 million consists of two elements: €17.2 million payable at completion and up to €7.2 million additional consideration based on Red Circle's EBITDA for the three months ending on 31 December 2007. If the maximum additional consideration of €7.2 million is paid, Red Circle will have generated EBITDA of at least €3.9 million in the year ending 31 December 2007. •The initial consideration and the additional consideration will be split 75% cash and 25% in zamano shares. •The cash element of the consideration will be funded by a new loan facility with Bank of Scotland (Ireland). •The maximum number of Consideration Shares to be issued pursuant to the Acquisition is 16,944,444 shares, representing approximately 20 per cent. of the equity of the Enlarged Group. The final number of Consideration Shares to be issued will be calculated based on a share price of 36 cents per share (which represents a premium of approximately 9.1 per cent. to the closing share price on 23 November 2007), or, if higher, the average closing share price during the five days prior to the EGM. On Completion, the Vendors will enter into an agreement not to dispose of any of their consideration shares for 12 months. •The Board believes that the acquisition will immediately enhance earnings per share of the Group (before the amortisation of intangible assets). •The Enlarged Group will be managed by the existing zamano Board, Rod Matthews (Non Executive Chairman), John O'Shea (Managing Director) and Colm Saunders (Finance Director), supported by its Non Executive Directors, Brendan Mullin, Colin Tucker and John Michael Watson. •As a result of the size of Red Circle relative to zamano, the Acquisition constitutes a reverse takeover under the AIM Rules for Companies and the IEX Rules for Companies and is conditional, inter alia, on the approval of Shareholders at the EGM which has been convened for 11.00 a.m. on 12 December 2007. •If the Acquisition is approved, the admission of the Existing Ordinary Shares to trading on AIM and IEX will be cancelled and the Company will apply for its enlarged share capital to be re-admitted to trading on AIM and IEX, with admission expected to occur on 13 December 2007. The Board of zamano, who have been advised on the Acquisition by NCB CorporateFinance, believe that the Acquisition is in the best interests of the Companyand its Shareholders and unanimously recommend that all Shareholders vote infavour of the Acquisition, as they intend to do in respect of their ownbeneficial holdings of Ordinary Shares. John O'Shea, Managing Director of zamano, said: "This is a transformational deal for zamano and brings together two successfulmobile technology companies, creating an enlarged company which will operate ona global level. The Acquisition more than doubles zamano's revenue on a pro-forma basis. Red Circle is zamano's fifth acquisition overall and the second in 2007; theDirectors are confident that this will be another successful transaction. TheCompany will continue to seek further organic and inorganic opportunities forgrowth in line with the strategy. I am delighted to welcome the Red Circle team, led by Cathal Fay, to the Groupand look forward to working with them to ensure the continuation of their strongtrack record of growth and innovation." Rod Matthews, Chairman of zamano, added: "zamano's business continues to perform very strongly and, as I stated at thetime of our interim results announcement in September, the Board continue to bevery comfortable with market expectations for the full-year to 31 December2007." The Admission Document containing a notice convening an Extraordinary GeneralMeeting to be held at the Conrad Dublin Hotel, Earlsfort Terrace, Dublin 2,Ireland at 11.00 a.m. on 12 December 2007 is being sent to shareholders today. Contacts: zamanoJohn O'Shea (Managing Director) +353 1 488 5830Colm Saunders (Finance Director) +353 1 511 1224 www.zamano.comNCB Corporate FinanceConor McCarthy +353 1 611 5100Shane Lawlor www.ncb.ie Seymour PierceDavid Newton +44 207 107 8000 www.seymourpierce.comEdelmanRebecca Penney / Laura Cocker (London) +44 207 344 1577 / +44 207 344 1579Mark Cahalane/ Joe Carmody (Dublin) +353 1 678 9333 www.edelman.com Your attention is drawn to the full text of the announcement. The full terms ofthe Acquisition are set out in Part VI of the Admission Document and should beread in conjunction with this announcement. The Admission Document, including anotice convening the EGM, together with the Form of Proxy, is expected to besent to Shareholders later today. NCB Stockbrokers Limited and Seymour Pierce Limited are each acting exclusivelyfor zamano and for no one else in connection with the Proposals and will not beresponsible to anyone other than zamano for providing the protections affordedto clients of NCB Stockbrokers Limited and Seymour Pierce Limited (as the casemay be) or for providing advice in relation to the Proposals or on any matterreferred to herein. The definitions of terms used in this announcement are setout in Appendix I of this announcement. This announcement and the information contained herein is not for publication,distribution or release in whole or in part, in or into, the United States ofAmerica, Canada, Australia or Japan or any other jurisdiction where suchpublication, distribution or release would be unlawful. This announcement is not an admission document nor a prospectus; it is anadvertisement, Investors should not purchase or subscribe for any securitiesreferred to in this announcement except solely on the basis of informationcontained in the admission document, which is expected to be published by zamanoplc in due course in connection with the re-admission of its ordinary shares totrading on AIM and IEX. Copies of the admission document will, followingpublication, be available from the offices of Seymour Pierce Limited, 20 OldBailey, London EC4M 7EN and NCB Stockbrokers Limited, 3 George's Dock, IFSC,Dublin 1, Ireland during normal business hours for a period of one monthfollowing re-admission. 1. Principal terms of the Acquisition The principal terms and conditions of the Acquisition Agreement are summarisedbelow. Further details on the Acquisition Agreement are outlined in theAdmission Document posted to shareholders today. Under the Acquisition Agreement the initial consideration payable by zamano tothe Vendors at Completion is €17.2 million (the "Initial Consideration"),subject to adjustment as explained below. This will be satisfied by the issue atCompletion of the Initial Consideration Shares valued at €4.3 million at theConsideration Issue Price and the payment of the balance in cash. The cash element of the Initial Consideration payable at Completion is subjectto an adjustment in respect of the estimated net cash of Red Circle fivebusiness days before Completion. Under the Acquisition Agreement, the Additional Consideration is payable to theVendors based on the EBITDA which Red Circle achieves for the three monthsending on 31 December 2007. This will be satisfied as to twenty five per cent.by the issue of the Additional Consideration Shares at the Consideration IssuePrice and the payment of the adjusted balance in cash. The cash element of the Additional Consideration is subject to adjustment inrespect of (a) the actual net cash position of Red Circle at Completion; (b) theworking capital position of Red Circle at Completion (both of which will beverified by Completion accounts); (c) the corporation tax liability of RedCircle at 31 December 2007; and (d) other specified costs of up to €100,000.Payment of this cash element and the issue of the Additional ConsiderationShares are expected to occur in early 2008 when completion accounts and EBITDAcalculations are finalised. At the time when the cash element of the Additional Consideration is being paid,€2,011,000 will be deducted from it and paid into an escrow account as securityfor the warranties and indemnities given by the Vendors in the AcquisitionAgreement. Certain amounts may be released from escrow upon discharge of therelated liabilities to the Company's satisfaction. The balance will be releasedtwo years after Completion. The maximum aggregate consideration payable for Red Circle is €24.4 million(subject to adjustment). The maximum aggregate cash element of the considerationof €18.3 million (subject to adjustment), along with the related transactionexpenses, will be satisfied out of new secured bank borrowings to be drawn downunder the Loan Facility (further details of which are set out in the AdmissionDocument). The Initial Consideration Shares will be issued at Completion and theAdditional Consideration Shares will be issued in early 2008 when the Completionaccounts are finalised. Completion of the Acquisition is conditional, inter alia, upon, theReorganisation, the passing at the EGM of Resolution One by ExisitingShareholders and upon the availability of funding. 2. Background and rationale for the proposed Acquisition The Board has been considering opportunities for strategic expansion throughcarefully selected acquisitions and consolidation in the Company's sector. Theproposed Acquisition will be zamano's second acquisition since listing on AIMand IEX. The Directors identified Red Circle as a business which offers significantstrategic and financial benefits to zamano. Red Circle has its head office inDublin, with its core business in the United Kingdom and Ireland and emergingbusinesses in both Australia and the US. zamano currently operates in a number of sections of the value chain for theprovision of digital entertainment to mobile devices: • zamano B2C business: develops interactive mobile applications that it delivers to consumers, along with third party content, through its multiple B2C brands and websites on its own MMG platform via SMS or WAP. • zamano B2B business: provides interactive mobile applications and content to its business partners who in turn target consumers. It delivers business partners' applications and content to consumers on its MMG platform. Red Circle operates almost exclusively in the "B2C Brands" segment of the valuechain and the Acquisition will add a number of new B2C brands to zamano'sexisting B2C business. The Directors believe that Red Circle's brands will enhance zamano's B2Cbusiness and that the acquisition of Red Circle by zamano should createopportunities for further geographic expansion and enhance the earnings pershare before amortisation of the Enlarged Group. 3. Summary financial information of zamano and Red Circle 3.1 Summary financial information on zamano The following financial information is an extract of zamano's historicalfinancial information for the three years ended 31 December 2006 and the sixmonth period ended 30 June 2007. Financial information for the six month periodended 30 June 2007 and the year ended 31 December 2006 is stated under IFRS.Prior to this, audited financial information was stated under Irish GAAP. Areconciliation of the reported Irish GAAP financial information to the IFRSfinancial information is set out in the Company's IFRS Adoption document,published on 20 September 2007. 6 months 12 months ended 31 December ended 2006 2006 2005 2004 30 June 2007 Unaudited Audited Audited Audited Unaudited restated under Irish Irish Irish IFRS IFRS GAAP GAAP GAAP •'000 •'000 •'000 •'000 •'000Revenue 9,671 12,352 13,357 9,694 5,067Operating profit 1,310 2,392 2,182 1,302 155Profit beforetaxation 1,393 2,451 2,241 1,307 151Profit aftertaxation 1,183 2,207 1,997 1,276 125 3.2 Summary financial information on Red Circle The summary financial information of Red Circle for each of the three yearsended 31 May 2007 is set out in the table below. This has been extracted withoutmaterial adjustment from the Accountants' Report in the Admission Document,which has been prepared in accordance with IFRS, as modified to exclude thosesubsidiaries which are being disposed of by Red Circle as part of theReorganisation. Further detail on the basis of preparation applied is set out inthe Admission Document. 12 months ended 31 May 2007 2006 2005 •'000 •'000 •'000 Revenue 31,068 28,456 17,605Operating profit 3,417 3,102 1,402Profit before taxation 3,778 3,148 1,402Profit after taxation 3,294 2,739 1,257 The Board expects that the pre-tax cost savings arising from the Acquisitionwill be at least €500,000 per annum once the full benefits of the Acquisitionare realised and Red Circle is fully integrated. These savings will be offset inyear one by certain integration costs of combining the two businesses. 4. Information on zamano 4.1 History Established in 2000 with offices in the UK and Ireland, zamano is a leadingprovider of digital entertainment to mobile devices. zamano has well establishedoperations in Ireland and the UK and a growing presence in Australia. zamano has 40 employees, 34 of which are located at its head office in Dublinand the remainder in London. zamano develops, promotes and distributes digital entertainment such as mobilecontent and interactive services. zamano has built an advanced technologyplatform, MMG, that delivers digital entertainment both directly to consumersthrough its B2C operations and indirectly through business partners via its B2Boperations. zamano also delivers business customer developed content on its MMGplatform. zamano listed on AIM on 31 October 2006, raising €4.9 million net of expenses.Subsequently it listed on IEX to further broaden its shareholder base andenhance liquidity. Its strategy continues to include using the funds raised forstrategic acquisitions, investment in developing mobile applications, enhancingits MMG platform and expansion into new territories. During the past five years, zamano has made a number of strategic acquisitionsleading to a multi-branded suite of offerings. On 20 April 2007, in its firstacquisition since listing on a public exchange, zamano acquired the entireissued share capital of Eirborne Text Promotions Limited ("Eirborne"), an Irishbased mobile content company active in the UK, Irish and Australian markets.Prior to this, in May 2004, zamano acquired Enabletel Limited and since then hasoperated a mobile content brand, MobileX, upon which the Group's B2C businesswas founded. zamano made two acquisitions in 2002: the entire issued sharecapital of M-iSphere Telecommunications Limited ("M-isphere") and the assets ofAvoca Communications Limited ("Avoca"). Revenues have been boosted by the acquisition of Eirborne. The Company continuesto invest in sales, marketing and its core applications and development team tosupport further growth. zamano's B2B business accounts for approximately 58 per cent. of overallrevenues as at 30 June 2007 with approximately 42 per cent. generated by thesale of zamano's mobile content and interactive services in the B2C business.The gross profit margins for the B2C services are significantly higher than theB2B services at between 35 per cent. to 65 per cent. compared to 5 per cent. to30 per cent. respectively. The Directors believe that growth prospects exist forboth elements of zamano's business. As a result of growth in zamano's business and the level of data transmitted andprocessed on zamano's MMG platform, zamano's annual revenues have grownsubstantially over the past four financial years. 4.2 zamano B2C Business zamano operates under a collection of brands, including MobileX andVeronicasmoco. zamano's first established B2C business, branded as "MobileX", delivers mobilecontent and interactive services directly to consumers. It is promoted primarilythrough "off the page" advertising in tabloids and magazines in Ireland.Interactive services include competitions, horoscopes, chat and dating. zamanoboth develops content in-house and also sources mobile phone content externally. The Veronicasmoco (www.veronicasmoco.com) and www.textual.tv suite of web andWAP portals offer content and interactive services in the UK, Irish, Australianand American markets. Subscribers can download unlimited mobile content and sendunlimited weekly text messages from websites for weekly fees such as €2.50/£1.75. At present zamano's B2C brands have in excess of 235,000 active subscribers. 4.3 zamano B2B Business zamano's MMG platform offers a diverse range of functionality and communicationcapabilities to the Company's business partners, providing connectivity betweenapplications, Mobile Operators (including in the UK and Australia) andconsumers. zamano's applications can be used on a stand-alone basis or as part of anintegrated bespoke combination depending on client requirements. The MMGplatform identifies which device is requesting information or content anddelivers it in a suitable format for that particular device. Over 80 business partners currently utilise zamano's MMG technology platform onan ongoing basis, including mobile operators, media and marketing companies aswell as mobile content providers. Revenues are predominantly generated through mobile operators' charges tocustomers for every interaction which occurs. These transactions result in adefined revenue share being paid to zamano. The amount of revenue retained byzamano is dependent upon the extent to which the Group's B2B customers utilizezamano's technology services on each transaction. 5. Information on Red Circle 5.1 Introduction Red Circle is a privately owned mobile content services provider withheadquarters in Dublin. Red Circle's core business is the provision of contentto consumers for the personalisation of mobile devices. Red Circle delivers itscontent and applications via SMS and WAP. The company has demonstrated significant organic growth in the digitalentertainment to mobile devices sector since it was incorporated in 1998 andgenerated revenue of approximately €31.1 million for the year ended 31 May 2007. Red Circle operates predominantly in the UK and Ireland. It recently establishedoperations in Australia and the US based on the same business model and platformas used in the UK and Ireland. Red Circle has in excess of 506,000 active subscribers. 5.2 History Red Circle was founded in 1998 by Ger Dowling. Red Circle's initial focus wasthe use of speech recognition for a range of applications including dating andgaming services, but, in 2001, it began offering ringtone applications usingspeech recognition. By 2002 ringtones had become Red Circle's most successful product line andbecame the strategic focus of the business using direct advertising in UKmagazines, under the brand TXT UK. In the same year, it became an early adopterof the use of premium SMS as a billing method, which continues to be its primarybilling method. Red Circle continues to use its TXT UK brand (primarily throughprint focused marketing with content sold on an a-la-carte basis) in addition toother brands such as Zing Club (premier mobile subscription service) and MobileDiva (targeted at teen and young female market), each of which focuses on adifferent target group and marketing media. 5.3 Business operations Red Circle's business focuses on a B2C model of providing mobile contentservices. This business model has been highly successful with revenue growth inthe UK market and emerging revenue streams in Australia and the US. The success of Red Circle is based largely on the creative content of itsproducts and the use of targeted advertising, all of which are supported by anunderlying content management and data mining technology platform. Red Circle uses a management information system which allows real time consumerstatistical monitoring to ensure the effectiveness of advertising campaigns.Knowledge from existing customer behaviour is transferred directly to thein-house content production team and ultimately into the mobile content andmarketing collateral, facilitating the use of a targeted analytical approach andtherefore ensuring the return from advertising investment is optimised. RedCircle monitors evolving market trends and mobile device development to ensureit can meet the changing demand for content. In addition to generating its own in-house content, Red Circle works with abroad range of third party content providers and leading licence holders. 6. Current trading and prospects 6.1 zamano zamano expects acquisitions, territorial expansion and technology capabilitiesto be key features of the Enlarged Group's growth going forward. The Board believes zamano is well positioned to benefit from continued growthand activity in the digital entertainment to mobile devices market which isbeing driven by increasingly sophisticated handsets with higher bandwidth, lowerdata download costs and the availability of higher quality and consumer relevantcontent designed to fit individual mobile device screens. The unaudited interim results for zamano for the 6 months ended to 30 June 2007show a profit after tax figure of €1.2 million from revenues of approximately€9.7 million. The business continues to perform very strongly and as stated whenthe interim results were announced on 20 September 2007, the Board continues tobe very comfortable with the market expectations for the full year to 31December 2007. 6.2 Red Circle The financial information set out above shows a profit after tax of €3.3 millionfor Red Circle for the year ended 31 May 2007, on revenues of €31.1 million.Since 31 May 2007, Red Circle has traded in line with the Board's expectations. 6.3 Enlarged Group The Directors believe that the future growth prospects for the Enlarged Groupare attractive. The Company will continue to focus on ensuring that itstechnology platforms and mobile content are continually developed to meet thechanging needs of mobile device users and business partners. 7. Lock-in and orderly market agreements The Vendors, who, on Admission, will together hold up to 14.67 per cent. of theEnlarged Share Capital (excluding any Additional Consideration Shares), willundertake to Seymour Pierce, NCB and the Company not (save in certain specificcircumstances) to dispose of any Consideration Shares, or any shares into whichsuch Consideration Shares are subdivided or converted, for a period of 12 monthsfollowing Admission, and for the 6 months thereafter only to dispose of suchshares through the Company's broker from time to time. 8. Admission and dealings As the Acquisition constitutes a reverse takeover under Rule 14 of both the AIMRules for Companies and Rule 14 of the IEX Rules for Companies, application,which is conditional on the passing of Resolution One, will be made to theLondon Stock Exchange and the Irish Stock Exchange for the whole of the EnlargedShare Capital to be admitted to trading on AIM and IEX. It is expected thatAdmission will become effective and that dealings will commence on 13 December2007. The Ordinary Shares are eligible for CREST settlement. 9. Share schemes In addition to the Acquisition, the Board is proposing to adopt two new shareplans, a Share Participation Plan and a Share Save Plan, for employees which itbelieves will help motivate and retain staff and align their interests withthose of Shareholders. Details of these proposed share plans are set out in theAdmission Document being sent to Shareholders today. The proposed share planswill require the approval of Shareholders at the EGM. 10. Extraordinary General Meeting The Acquisition is classed as a reverse takeover for the purpose of the AIMRules for Companies and the IEX Rules for Companies and is therefore conditionalupon the approval of Existing Shareholders at the EGM to be held in the ConradDublin Hotel, Earlsfort Terrace, Dublin 2, Ireland at 11.00 a.m. on 12 December2007. An Admission Document, dated today's date, has been sent to shareholderscontaining full details of the Acquisition and notice of the EGM for the purposeof considering and, if thought fit, passing the Resolution required to approvethe Acquisition of Red Circle. 11. Documentation Shareholders are recommended to read the whole of the Admission Document and notjust rely on the summary provided here. NCB Stockbrokers Limited and Seymour Pierce Limited are each acting exclusivelyfor zamano and for no one else in connection with the Proposals and will not beresponsible to anyone other than zamano for providing the protections affordedto clients of NCB Stockbrokers Limited and Seymour Pierce Limited (as the casemay be) or for providing advice in relation to the Proposals or on any matterreferred to herein. The definitions of terms used in this announcement are setout in Appendix I of this announcement. DEFINITIONS "Acquisition" the proposed acquisition by the Company of the entire issued share capital of Red Circle pursuant to the Acquisition Agreement "Acquisition Agreement" the agreement dated 23 November 2007 between (1) the Vendors, (2) the Company and others relating to the Acquisition, which is conditional, inter alia, on the passing of Resolution One at the EGM, further details of which are set out in the Admission Document "Additional a sum equal to 6.3 times the EBITDA of Red Circle forConsideration" the three months to 31 December 2007, up to a maximum of €7.2 million calculated in accordance with the Acquisition Agreement "Additional such number of Ordinary Shares (rounded down to theConsideration Shares" nearest whole number) as will, based on the Consideration Issue Price, have an aggregate value equal to 25 per cent. of the Additional Consideration "Admission" the re-admission of the Existing Ordinary Shares and the admission of the Initial Consideration Shares to trading on AIM and IEX and such admission becoming effective in accordance with the AIM Rules for Companies and IEX Rules for Companies respectively "Admission Document" the document used for the purpose of Admission "AIM" the AIM market of the London Stock Exchange "AIM Rules for the rules of the London Stock Exchange which set outCompanies" the rules and responsibilities in relation to companies whose shares are admitted to trading on AIM, as amended from time to time "Board" or "Directors" the directors of the Company "Company" zamano plc incorporated in Ireland with registered number 329336 "Completion" Completion of the Acquisition on the terms set out in the Acquisition Agreement "Consideration" €24,400,000 (as adjusted in accordance with the Acquisition Agreement) including the issue of the Consideration Shares to be paid and issued, respectively, to the Vendors in accordance with the Acquisition Agreement "Consideration Issue the higher of €0.36 and the average closing price ofPrice" the Ordinary Shares on IEX for the five trading days prior to Completion "Consideration Shares" up to 16,944,444 new Ordinary Shares comprising the Initial Consideration Shares and the Additional Consideration Shares "CREST Regulations" the Companies Acts 1990 (Uncertificated Securities) Regulations 1996 (SI 68 of 1996) of Ireland "CREST" the relevant system (as defined in the CREST Regulations) for the paperless settlement of share transfers and the holding of shares in uncertificated form in respect of which CRESTCo Limited is the Operator (as defined in the CREST Regulations) "CRESTCO" CRESTCo Limited "EBITDA" earnings before interest, taxation and depreciation and amortisation "Enlarged Group" the Company and its subsidiaries following Completion "Enlarged Issued Share the number of issued Shares immediately followingCapital" or "Enlarged Admission, consisting of the Existing Issued Shares andShare Capital" the Initial Consideration Shares "Existing Issued Share the existing issued Ordinary SharesCapital" or "ExistingOrdinary Shares" "Existing Shareholder" a holder of Ordinary Shares "Form of Proxy" the form of proxy which accompanies the Admission Document for use by the Existing Shareholders in connection with the EGM "Further Enlarged Share the aggregate of the Existing Issued Shares and theCapital" Consideration Shares "Group" or "zamano" the Company and its subsidiaries as at the date of the Admission Document "Ireland" the island of Ireland excluding Northern Ireland, and the word "Irish" shall be construed accordingly "IEX" The Irish Enterprise Exchange, a market regulated by the Irish Stock Exchange "IEX Rules for the Rules of the Irish Stock Exchange which set out theCompanies" rules and responsibilities in relation to companies whose shares admitted to trading on IEX, as amended from time to time "IFRS" International Financial Reporting Standards as adopted by the International Accounting Standards Board "Initial Consideration" up to €17,200,000 as adjusted in accordance with the Acquisition Agreement to be paid to the Vendors "Initial Consideration such number of Ordinary Shares (rounded down to theShares" nearest whole number) as will, based on the Consideration Issue Price, have and aggregate value of €4,300,000 "IR£" Irish Pounds "Irish GAAP" Irish generally accepted accounting principles "Irish Stock Exchange" the Irish Stock Exchange Limited "Loan Facility" the loan facility to be made available to the Company to fund the Acquisition, on the terms of the agreement described in the Admission Document "London Stock Exchange" London Stock Exchange plc "NCB" NCB Stockbrokers Limited, the Company's finance adviser, IEX adviser and joint broker for the purposes of the IEX Rules for Companies "Ordinary Shares" or ordinary shares of €0.001 each in the capital of the"Shares" Company "Proposals" the Acquisition, the Admission and the approval of the New Schemes "Red Circle" Red Circle Technologies Limited, a company registered in Ireland with company number 285500 "Reorganisation" (a) the disposal by Red Circle of its shareholdings in Fullthor Media Services Limited, Carapoca Limited and Red Circle Technology Philippines Inc. which is a condition precedent of the Acquisition upon terms agreed with the Company; and (b) the assignment by Red Circle of a lease of property in London upon terms agreed with the Company "Resolutions" the resolutions set out in the notice for the EGM "Resolution One" the first resolution as set out in the notice of the EGM "Seymour Pierce" Seymour Pierce Limited, the Company's nominated advisor and joint broker for the purposes of the AIM Rules for Companies "Shareholders" holders of Shares "Share Participation the proposed new all employee share participation plan,Plan" a summary of which is set out in the Admission Document "Share Save Plan" the proposed new all employee share save plan, a summary of which is set out in the Admission Document"subsidiary" or have the meanings respectively ascribed to them by the"subsidiary Actsundertaking","associated undertaking"and "undertaking" "UK" or "United Kingdom" the United Kingdom of Great Britain and Northern Ireland "uncertificated" or "in recorded on the relevant register of the share oruncertificated form" security concerned as being held in uncertificated form in CREST and title to which may be transferred by means of CREST "US" the United States of America "Vendors" Grillon Holdings Limited, Kevin Moore, Sean O'Neill, Julian Moore, Cathal Fay, Eoin Dowling and Kevin Burkitt "•" euro, the currency for the time being of Ireland GLOSSARY Application a technology structure that administers mobile services or content B2B Business-To-Business, being a transaction that occurs between two companies, as opposed to a transaction involving a consumer B2C Business-To-Consumer, being a transaction that occurs between a company and a consumer, as opposed to a transaction between companies Content (or applications, downloads and services or mobile devices,mobile content) including, inter alia, ringtones, images, games, videos and music Java a high level object oriented programming language developed by Sun Microsystems MMG Mobile Messaging Gateway, the zamano developed proprietary platform that delivers digital entertainment via premium SMS or WAP to mobile devices Mobile Operator companies such as Vodafone, O2 and Orange who provide andor MNO operate mobile phone networks Premium Rate a premium rate text message or WAP download containing contentData Services that the mobile phone user pays either through his/her monthly bill issued by a mobile operator or by an immediate deduction from the mobile phone user's pre-paid phone credit SMS Short Message Service. A facility for sending short text messages between mobile phones, other hand held devices and landline telephones, for the purposes of personal communication as well as ordering mobile content or entering competitions WAP Wireless Application Protocol. A global open standard for accessing online services through mobile phones ENDS This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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