29th Nov 2007 08:00
IQ Holdings plc29 November 2007 FOR IMMEDIATE RELEASE 29 NOVEMBER 2007 IQ HOLDINGS PLC ("IQ Holdings" or the "Company"or the "Group") Admission to AIM, Placing of £850,000, and Acquisition of Rosslyn Research Ltd IQ Holdings, the business research and competitive intelligence group, ispleased to announce that following shareholder approval at its extraordinarygeneral meeting on 28 November 2007, its shares commence trading today (ticker:IQH) on the AIM market of the London Stock Exchange ("Admission"). The Companyhas raised gross proceeds of £850,000 (the "Placing") and has completed theacquisition of Rosslyn Research Ltd ("Rosslyn" or the "Acquisition"), aspecialist agency for business and international research. Grant ThorntonCorporate Finance is acting as nominated adviser and SVS Securities plc isacting as financial adviser and broker to the Company. HIGHLIGHTS • IQ Holdings and Rosslyn have already established a strong working relationship;• Rosslyn clients include 3M plc, Coca-Cola plc and Mars plc;• Directors are focused on cross-selling opportunity between client bases;• Acquisition will deliver immediate economies of scale to the Company;• Rosslyn will allow IQ to access both Quantitative and Qualitative research resources of an international nature.• Joe Seydel joins the experienced Board of Directors; STATISTICS • Rosslyn acquired for £600,000, satisfied by the issue of 10,000,000 ordinary shares at 2p per share and £400,000 of cash consideration;• £850,000 raised through the placing of 42,500,000 ordinary shares at 2p (the "Placing Shares");• Number of Ordinary Shares in issue immediately following Admission: 81,426,762;• Anticipated market cap of £1.63 million; and• Percentage of the Company's enlarged share capital represented by the Placing Shares: 52.2%. IQ Holdings, through its wholly owned subsidiary, IQ Research, offers businessresearch consultancy and competitive intelligence services to businesses, with aparticular emphasis in the financial sector servicing major UK clearing banks,life insurance companies, pension companies and accountancy firms. IQ Holdings has many well known blue chip clients within these sectors includingFTSE100 high street banks, FTSE100 high street insurance companies, governmentagencies, and a regulatory body. Specific services include commercial due diligence, competitive intelligence,customer/client research and branding research. Commenting on the Acquisition and today's Admission to AIM, Julian Green, ChiefExecutive Officer, IQ Holdings, said: "The Company is pleased to have completed the acquisition of Rosslyn and to havebeen admitted to AIM. Rosslyn significantly expands the Company's quantitativemarket research capabilities and customer base, creating an opportunity tocross-sell services amongst the Company's new enlarged clientele. Rosslyn bringsa history of profitability to the Company in addition to the opportunity toachieve greater economies of scale through the integration of the businesses. I am delighted to welcome Joe Seydel to the Board of IQ Holdings. Joe is wellrespected in the market research industry and brings with him a wealth ofexperience. In addition to pursuing organic growth, we continue to look for suitableacquisitions within the market research sector that will compliment our existingbusiness and enhance shareholder value." For further details on the Placing and Acquisition please see below Enquiries: IQ Holdings plcJulian Green Tel: 020 7328 8823 Grant Thornton Corporate FinanceGerry Beaney / Troy MacDonald Tel: 020 7383 5100 SVS Securities plcKirsten Aldridge / Shirin Gandhi Tel: 020 7638 5600 Bishopsgate Communications LtdDominic Barretto/ Nick Farmer Tel: 020 7562 3350 [email protected] THE FOLLOWING STATEMENT SHOULD BE READ IN CONJUNCTION WITH THE FULL ADMISSIONDOCUMENT BACKGROUND TO IQ HOLDINGS IQ Holdings, through its wholly owned subsidiary, IQ Research, offers businessresearch consultancy and competitive intelligence services to businesses, with aparticular emphasis in the financial sector. IQ Research was originally foundedby Julian Green in 1998 and the Group was subsequently admitted to PLUS Marketson 10 February 2005. The Group's key services broadly fall into two key areas,consultancy services and high value research products. The Directors believe that there are currently opportunities for consolidationof UK research companies in the middle market and that status as an AIM-listedsecurity will enhance the Group's ability to take advantage of this opportunity.The Directors believe that the acquisition of companies within this marketsegment will enable the Company to obtain critical mass and facilitatecompetition with larger market participants. CAPITAL REORGANISATION The Group has reorganised its share capital for the benefit of its shareholders,with every two shares of 1p being divided into five new shares of 0.4p each. THE PLACING The Company has raised £850,000 before expenses by way of a placing of42,500,000 ordinary shares at 2p each (the "Placing Price"). The Company intends to apply the net proceeds of the Placing (amounting to£475,000) to fund the £400,000 of cash consideration required for theAcquisition and for working capital purposes. The Placing Shares will represent approximately 52.2 per cent. of the Company'senlarged share capital following Admission. Based on the Placing Price, theCompany will have a market capitalisation of approximately £1.63 million. The Placing Shares will, on Admission, rank pari passu in all respects with theOrdinary Shares, including the right to receive dividends and otherdistributions thereafter declared, made or paid in respect of the OrdinaryShares. THE ACQUISITION The Company has acquired the entire issued share capital of Rosslyn forconsideration totaling £600,000, consisting of £400,000 in cash and theallotment and issue of 10,000,000 ordinary shares in IQ Holdings. BACKGROUND TO ROSSLYN Rosslyn was founded in 1979 as a specialist agency for business andinternational research. Rosslyn's mission since its inception has been toprovide its customers with information that may enhance their competitiveposition. Rosslyn occupies a position in the UK and international marketresearch Industry that covers both direct clients and sub-contract markets.Rosslyn has remained a relatively small and independent research agency. Throughan international call centre, covering the major business languages of the worldand a network of partner agencies, Rosslyn has been able to conduct research incountries in North America, South America, Europe and Asia. It has also wonlarge contracts which the Directors consider are normally the domain of thelarger international research agencies. A significant proportion of Rosslyn'srevenue is derived from traditional quantitative and qualitative research of aninternational nature. Rosslyn works with its clients to plan research programmestailored to meet specific information needs, both quantitative and qualitative. The Directors believe that: • Rosslyn will provide technical and field resources to accommodate elements of IQ Holdings' organic growth strategy, most notably in the quantitative survey elements of the life and pensions product; • Rosslyn will deliver immediate economies of scale; • Based upon its historical pre-tax profit levels of approximately £100,000 per annum Rosslyn should have a positive financial impact on the Group; • Rosslyn will extend the breadth of research services offered by IQ Holdings to include quantitative market research which is delivered through Rosslyn's computer aided telephoning unit; and • Rosslyn and IQ Holdings can utilise their distinct service offerings to cross-sell to their respective customers. Rosslyn will be the first acquisition that IQ Holdings has completed. However,the Directors have identified several other mid-market UK based market researchcompanies that it believes will also meet its criteria. Subsequent to Admission,the Company intends to initiate discussions with these targeted companies. TheDirectors believe the Company is ready to integrate one or more acquisitions inaddition to Rosslyn. Both IQ Holdings and Rosslyn currently undertake a significant portion of marketresearch work overseas. The Directors intend to increase the Group'sinternational focus, particularly in developing countries where much higherlevels of growth are being experienced. Rosslyn clients include: 3M plc, Advanis inc, Coca-Cola plc, Dow Chemical inc,Freshfield Bruckhaus Deringer LLP, TNS-Global inc, Mars plc, and Wilmer, Cutler,Pickering, Hale and Dorr LLP. OUTLOOK The Board believes that the optimum way to build shareholder value is to becomea leading mid-market UK business research company. The Company plans to achievethis through both organic growth and selective acquisitions and believe thatbeing on AIM will provide the ideal platform. The three key elements of thisstrategy are: • Recruitment of senior executives capable of generating significant new business in relation to their specific technical or sector expertise; • Development of a series of high value research products with regularly updated elements, generating repeat business and encouraging client loyalty and retention; and • Making selective acquisitions to take advantage of the consolidation opportunity that exists within the industry. BOARD OF DIRECTORS On Admission, Joe Seydel will be appointed to the Board. Following Admission theBoard will comprise: Timothy Michael Hearley, Non-Executive Chairman (aged 65) 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 offinancial derivatives software. Tim is currently a non-executive director ofOakdene Homes plc, an AIM listed property developer, non-executive chairman ofAIM Listed Vicorp Group plc, a UK software group operating in thetelecommunications sector and executive chairman of Reflec plc, an AIM listedspecialist developer and manufacturer of retro-reflective inks, fabrics,ancillary products and processes powders. Julian Everard Green,Managing Director, (aged 39) Julian is the founder of IQ Research. Prior to this, he was employed byEuromonitor Publications Limited for eight years where he held a number ofsenior positions and was seconded to Chicago, Illinois, USA to set up the NorthAmerican consultancy practice. He successfully grew the North American businessunit and built a team of 25 full time analysts. Julian has helped develop closerelationships with a number of well respected businesses and has significantexperience delivering and leading significant research projects and initiatives. Neil Grant McGowan, Finance Director, (aged 68) Neil Grant McGowan qualified as a chartered accountant in 1965. After a furtherfour years in the profession, he joined The Charterhouse Group as deputyfinancial controller, subsequently becoming group company secretary andthereafter finance director of its electrical wholesaling subsidiary. During the1970's Neil was finance director of the Highlands & Islands Development Board.He later joined International Distillers & Vintners Limited, the wine and spiritdivision of the Grand Metropolitan group of companies, and was finance directorfrom 1984 to 1988. Neil left Grand Metropolitan in 1990 and has since pursued acareer acting as part-time finance director to a variety of companies. He iscurrently finance director of The Weather Lottery plc and Southern Bear plc. Joachim (Joe) Eberhard Seydel, Proposed Director, (aged 62) Joe is currently the Managing Director of Rosslyn. Following the completion ofthe Acquisition he will become an executive Director of IQ Holdings. Joe isresponsible for new business development, client service delivery and projectexecution. He is a marketing and market research specialist with experienceacross many industrial and consumer sectors, working with major trans-nationalcompanies as well as small and medium sized enterprises especially on aninternational basis. He is an active participant in the research industry andfrequent speaker at industry events and conferences. Joe is Immediate PastChairman of A.I.M.R.I, the Alliance of International Market Research Institutesand a frequent speaker at ESOMAR and A.I.M.R.I conferences and seminars. He isa Freeman of the City of London, a Liveryman of the Worshipful Company ofMarketors and a Full Member of the Marker Research Society and ESOMAR. ---ends--- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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