4th Jan 2007 07:30
Berkeley Scott Group Plc04 January 2007 04 January 2007 Berkeley Scott Group plc Announces a proposed Subscription of New Ordinary Shares to raise £2.5 million and new appointments to the Board Berkeley Scott Group plc ('Berkeley Scott' or the 'Company'), the AIM listedprovider of people resourcing solutions to the hospitality and leisureindustries, announces that it proposes to raise approximately £2.5 million(before expenses) by way of a Subscription by Tony Reeves and John Bowmer ("theConcert Party") of 14,285,714 new Ordinary Shares at a price of 17.5p per share. Overview •Subscription to raise approximately £2.5 million, through the issue of 14,285,714 Subscription Shares by way of the Subscription at 17.5p per share, which represented the middle market price of an Existing Share when discussions with the Concert Party commenced. •The Concert Party will together own approximately 62.6 per cent of the Company's issued share capital following the Subscription. •It is proposed that following the Subscription, Tony Reeves and John Bowmer will join the board as Non-Executive Co-Chairmen. Michael Jackson will also join the Board as a Non-Executive Director. •The Subscription will strengthen the Company's balance sheet and provide the Group with additional working capital. The Concert Party intends to use the Company as a vehicle for consolidation of the fragmented recruitment market, growing the business both organically and by acquisition to deliver greater shareholder value. •On 16 October 2006, the Company confirmed that it expected its results for the 12 months ended 30 September 2006 to be broadly in line with expectations. •Roddy Watt, Chief Executive Officer and co-founder of Berkeley Scott will step down from the Board and will relinquish his role as CEO. While a replacement is being sought, Tony Reeves will take on the role of acting Chief Executive Officer. •The Subscription is being recommended by the Board of Berkeley Scott. The Subscription The Subscription is conditional upon, inter alia, the Resolutions (including awaiver of the obligation to make a general offer under Rule 9 of the City Codeon Takeovers and Mergers) being duly passed at the EGM on 29 January 2007 andAdmission becoming effective on or before 8.00 a.m. on 30 January 2007 (or suchlater time and/or date as the Company and the Concert Party may agree). Under the terms of the Subscription Agreement, the Concert Party hasconditionally agreed to subscribe for, in aggregate, 14,285,714 SubscriptionShares (7,142,857 shares each). In addition, the Company has agreed to grantMessrs Reeves and Bowmer, conditionally on the Subscription taking place,warrants over 1,140,216 new Ordinary Shares in aggregate (570,108 shares each)at an exercise price of 17.5p which will become exerciseable 6 months followingAdmission subject to Messrs Reeves and Bowmer still being directors at thattime. The Subscription Shares are not being offered to Shareholders due to the costsand additional regulatory requirements and consequently time implicationsassociated with making a pre-emptive offering. The Subscription Shares will, when issued, rank pari passu in all respects withthe Existing Shares, including the right to receive dividends and otherdistributions declared following Admission. Growth Strategy Following completion of the Subscription, the Concert Party intends to pursue astrategy of expansion organically and through the acquisition of complementaryrecruitment consultancy businesses. The proceeds of the Subscription will beused to refinance the existing debt in the Company and to provide additionalfunding for ongoing working capital requirements. Both Tony Reeves and John Bowmer have extensive experience in the recruitmentsector and in growing companies by way of enhancements in operational efficiencyand through strategic acquisitions. They believe that the Company provides asolid platform on which future acquisitions can be built and that it willbenefit from their combined industry expertise. The objective will be to actively pursue strategic acquisitions which complementthe Company's existing offering or enable it to penetrate new markets.Acquisition targets will be considered if they have strong brands, serveattractive niche recruitment sectors, have sustainable revenues and qualitycandidate databases. Where appropriate the Concert Party intends to securefinancial improvements from such acquisitions, through a combination ofstrengthening management and centralising back office infrastructure. The Concert Party believe that long term operational efficiencies will accrue tothe Company as a result of cross selling and maximising the opportunitiesprovided by the Company's CV database and candidate sourcing infrastructure. Itis expected that this will be an ongoing process. The ultimate goal will be to develop strong niche brands, which will deliverlong term enhancement of shareholder value through improved operatingperformance of the business. In order to finance further acquisitionopportunities, it may be necessary for the Company to seek further capital orfunding in future. Changes to the Board It is proposed that following the Subscription three new directors will beappointed to the board, Roddy Watt, Chief Executive Officer, will step down fromthe Board, and Will Coker will remain as Chief Financial Officer. The proposednew directors are: Tony Reeves, Non-Executive Co-Chairman, age 66 Tony Reeves has over 45 years' experience in the recruitment sector, mostrecently as chairman and chief executive officer of hotgroup plc from 2002 untilits acquisition by Trinity Mirror Group plc in September 2005. Prior to thatTony was chairman and chief executive officer of the Delphi Group Plc until 1998where he was chief executive officer until its acquisition by Adecco SA. He isalso a private investor in various early stage companies. Before joining DelphiGroup Plc, Tony was chairman, president and chief executive officer of LifetimeCorporation, which was then a public company listed on the New York StockExchange. John Bowmer, Non-Executive Co-Chairman, age 62 John Bowmer is the former chairman of Adecco SA, the international staffing andrecruitment company where he was chief executive officer from 1996 to 2002 andchief executive officer of its predecessor, Adia, from 1992. Prior to this timehe served in a variety of executive positions at Adia in the UK, Asia, Australiaand the US from 1989. Between 1987 and 1989 he was chief executive officer ofJonathan Wren. Previously, Mr Bowmer held a range of management positions inmarketing and finance at companies including MAI plc, a financial services andmedia organisation and Polaroid (UK) Ltd. He was a director of CP Ships fromits flotation on the New York Stock Exchange in 2001 until its disposal to TUIAG at the end of 2005. Michael Jackson, Non-Executive Director, age 56 Mr Jackson founded Elderstreet Investments Limited in 1990 and is its executivechairman. For the past 20 years, he has specialised in raising finance andinvesting in the smaller companies sector. Mr Jackson is chairman of PartyGamingplc and until August 2006 was chairman of FTSE100 company, The Sage Group plc.He is also a director and investor in many other quoted and unquoted companies,including Netstore PLC and Computer Software Group plc. Mr Jackson studied lawat Cambridge University, and qualified as a chartered accountant with Coopers and Lybrand before spending five years in marketing for various US multinationaltechnology companies. He and Elderstreet VCT plc currently own 17.87 per cent.of the Existing Shares of the Company. As a result of the proposed Subscription, Berkeley Scott will now announce itspreliminary results for the 12 months ended 30 September 2006, in February 2007.In addition the Board will look to appoint a new chief executive officer. In themeantime, Tony Reeves has agreed to fulfill this role. Roddy Watt, Chief Executive Officer of Berkeley Scott, commented: "The new fundsbeing raised will provide the Group with the resources to both secure itsfinancial position and pursue a strategy for growth. The arrival of Tony Reevesand John Bowmer will add significantly to the strength of the management teamand will provide the basis for bringing a fresh perspective and new impetus tothe Group. " Enquiries: Berkeley Scott GroupRoddy Watt, Chief Executive Officer 01483 414141Will Coker, Chief Financial Officer Cardew GroupTim Robertson 020 7930 0777Catherine Maitland The contents of this announcement have been approved for the purposes of section21 of the Financial Services and Markets Act 2000 as amended ("FSMA") byEvolution Securities Limited ("Evolution"). Evolution is authorised andregulated in the United Kingdom by the Financial Services Authority in respectof regulated activities, as acting for the Company and for no-one else inconnection with the matters described in this announcement and will not beresponsible to anyone other than the Company for provided the protectionsafforded to customers of Evolution or for advising them on the contents of thisannouncement or any matter referred to herein. The announcement does not form part of any offer of securities, or constitute asolicitation of any offer to purchase or subscribe for securities, and anyacquisition of, or application for, securities in the proposed placing shouldonly be made on the basis of information contained in the AIM admission documentto be issued in due course in connection with the proposed placing and admissionto AIM. The securities to be offered in the proposed placing must not and willnot be offered to the public in the United Kingdom (within the meaning ofsection 102B FSMA) save in circumstances where it is lawful to do so without anapproved prospectus (within the meaning of section 85 FSMA) being made availableto the public before the offer is made. This announcement is not for release, publication or distribution, in whole orin part, or into Australia, Canada, Japan or the United States or to anynational, resident or citizen of Australia, Canada, Japan or the United States. The securities to be offered in the proposed placing have not been, and will notbe, registered under the United States Securities Act of 1933, as amended ("USSecurities Act") or under any state securities laws and may not be offered orsold in the United States or to, or for the account or benefit of, US persons(as defined in Regulation S promulgated under the US Securities Act). TheSecurities to be offered in the proposed placing are being offered only tonon-US persons outside the United States in transactions exempt from theregistration requirements of the US Securities Act in reliance on Regulation S.Purchasers of such securities may not offer to sell, pledge or otherwisetransfer the securities in the United States or to or for the account or benefitof US person (other than distributors) unless such offer, sale, pledge ortransfer is registered under the US Securities Act or an exemption fromregistration is available. The securities to be offered in the proposed placing have not been and will notbe registered under the securities legislation of any province or territory ofCanada, Australia or Japan. Accordingly, such securities may not, subject tocertain exemptions be offered or sold directly or indirectly in or in to Canada,Australia or Japan or to any national, citizen or resident of Canada, Australiaor Japan. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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