8th Sep 2006 12:11
themutual.net plc8 September 2006Acquisition of iD Factor - Renegotiation of the deferred considerationThe Board of themutal.net plc ("TMN") is pleased to announce that it hasrenegotiated the payment terms of the deferred consideration payable under theshare sale agreement ("SSA") relating to the acquisition of iD Factor Limited("IDF") in December 2005.Under the original terms of the SSA, TMN acquired the entire issued sharecapital of IDF, the online market research services company, for an initialconsideration of ‚£0.13 million, and deferred consideration of up to ‚£2.86million depending upon the future profitability of IDF for the periods ending30 April 2006, 2007, 2008 and 2009 respectively. The initial payment comprised of ‚£30,000 in cash and ‚£100,000 through the issueof loan notes. The deferred consideration of up to ‚£2.86 million, under theoriginal terms of the SSA, was payable up to ‚£1,033,334 by way of the issue ofadditional loan notes and up to ‚£1,826,666 million through the issue to thevendors of new ordinary shares of 0.01p each in TMN ("Ordinary Shares") in fourinstalments with the final instalment in 2009.Further to the announcement dated 28 December 2005, TMN has now renegotiatedthe terms of the deferred consideration by way of an amendment to the SSA.Under the revised terms, the deferred consideration will now be satisfied byway of the issue of 2,000,000 Ordinary Shares as follows: * 550,000 Ordinary Shares to be issued within 30 business days of 8 September 2006 to be locked for 12 months from the date of issue * 500,000 Ordinary Shares to be issued within 30 business days of 8 September 2006 to be locked for 24 months from the date of issue * 500,000 Ordinary Shares to be issued within 30 business days of 8 September 2006 to be locked for 36 months from the date of issue * three tranches of 150,000 Ordinary Shares to be issued within 30 business days of 30 April 2007, 30 April 2008 and 30 April 2009 respectively subject to certain conditions At the current mid market share price, the total deferred consideration of twomillion shares equates to a consideration of circa ‚£1.25 million.Application has been made for listing of 1,550,000 new Ordinary Shares, whichwill rank pari passu with existing Ordinary Shares, to be admitted to tradingon AIM, and admission is expected to become effective on 14 September 2006.Following the listing of these Ordinary Shares the Company will have 50,902,192Ordinary Shares in issue.Mark Smith, CEO said "We see this as a good deal for TMN as it removes variousuncertainties and immediately strengthens our balance sheet. IDF continues totrade in line with market expectations. Also, by accepting a substantiallylower value in TMN shares today rather than waiting for loan notes or shares tobe issued at a later date, the vendors are showing confidence in the futurevalue of TMN".Contacts:Mark Smith, CEOPeter Coveney, Finance DirectorTel: 020 7440 93104569750 v2ENDthemutual.net PLCRelated Shares:
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