13th Jan 2006 07:01
Panmure Gordon & Co. plc13 January 2006 Panmure Gordon & Co. plc Creation of Panmure Capital, a Joint Venture with Bank of Scotland, and a Placing of 4.89m shares with Bank of Scotland. 2006Introductory Panmure Gordon & Co. plc ("Panmure Gordon" or "the Company") and Bank ofScotland Corporate have today agreed to establish a new Joint Venture calledPanmure Capital, a co-investment vehicle targeting late stage pre-IPO fundingopportunities. Panmure Gordon and Bank of Scotland believe that there is currently a fundinggap for smaller companies who seek equity over a relatively short period priorto flotation on a public market. Panmure Capital will address this opportunity. Panmure Capital will initially have £30m of committed equity. Panmure Gordon andBank of Scotland will each commit up to £14.25m and the Managers a further£1.5m. It is envisaged that the committed funds will be drawn down during a 3year period. To provide the initial funds to satisfy Panmure Gordon's commitment, PanmureGordon has placed, conditional solely upon admission, 4.89m shares (representing8% of the enlarged share capital) with Bank of Scotland, at 220p. Structure of Panmure Capital The first general partner of Panmure Capital will be Panmure General PartnerLimited. The second general partner, manager and operator of the partnershipwill be Panmure Capital Partners Limited, a company whose shares are owned byEdward Forwood and Richard Wyatt (the Managers). Richard Wyatt is executivechairman of Panmure Gordon and will commit £1m to Panmure Capital. EdwardForwood is an experienced private equity professional and was the founding chiefexecutive of Kvault Software. The Company, Bank of Scotland and the Managerswill have economic interest respectively of 47.5%, 47.5% and 5% in PanmureCapital, reflecting their relative investments. After receiving their preferred return of 8% per annum and after accounting forthe second general partner's priority profit share the Investors, being theCompany, Bank of Scotland and the Managers will share 80 per cent of profit generated by Panmure Capital in proportion to their economic interests. Through their interest in the founder partner, the Managers and Panmure Gordon will alsobe entitled to a carried interest, which equates to 20% of all profits generatedabove the preferred return and after the priority profit share, as above. Panmure Gordon and the Managers will participate in the carried interest as to one third and two thirds respectively. As regards the latter, Richard Wyatt's share will be two thirds. The Fund documentation remains subject to final agreement between the partiesand it is envisaged that the Fund will be formally established very shortly. Investment Policy, Investment Manager, and relationship with Panmure The investment policy of Panmure Capital will be to invest in unlisted companieswhich the Manager considers to have a strong likelihood, within a maximum of twoyears of investment, of achieving a listing on AIM or another public market. Theinvestment objective of Panmure Capital is capital growth. Panmure Capital will be managed by Panmure Capital Partners Limited, which willbe an FSA registered firm which will be owned as to two thirds by Richard Wyattand as to one third by Edward Forwood. The manager will be entitled to apriority profit share in the Fund of 2 per cent per annum of the total drawndown commitments of the Investors net of any VAT or similar tax and reduced bythe acquisition cost of investments which have been distributed in specie orwhich have been realised and the proceeds of which have been distributed toInvestors and the Managers (other than in respect of underwriting transactionsand bridging investments). This fee will be subject to a minimum payment of£100,000 in the first year of operation of the Fund which shall be offsetagainst future entitlement. Richard Wyatt, as Chairman of Panmure Gordon, will not participate in anydecisions involving the Group's investment in Panmure Capital, nor in anydecisions as to whether Panmure Gordon participates in floating any investeecompanies of Panmure Capital. Prior to investment by the Fund, Panmure Gordonwill not make any commitment to float investee companies. In addition Panmure Gordon has today announced a further update on tradingperformance and the appointment of Charles Stonehill as non-executive DeputyChairman of the firm. An advisory group is being appointed to oversee theinvestments of Panmure Capital and its members will be announced in due course. Panmure Gordon's proposed investment in Panmure Capital will be classified as arelated party transaction under Rule 13 of the AIM Rules, by virtue of RichardWyatt's involvement with both Panmure Gordon and Panmure Capital. Accordingly,following final agreement of the documentation relating to the formation ofPanmure Capital, a further announcement will be made in accordance with Rule 13of the AIM Rules. Tim Linacre, the CEO of Panmure Gordon, said "Panmure Capital addresses a clear market need for late stage small cap growthfunding. The Fund extends the Panmure Gordon franchise, offers the possibilityof attractive returns and should also be a source of future flotations andcorporate clients. In Bank of Scotland we have a Joint Venture partner whobrings outstanding deal structuring skills and resources". Peter Cummings, Chief Executive of Bank of Scotland Corporate added: "This transaction demonstrates the Bank's commitment to a very strong managementteam and we are very excited to be participating in this new venture." For further information please contact:Panmure Gordon:Tim Linacre 020 7614 8300 Bell Pottinger Corporate & Financial:David Rydell / Nick Lambert / Chris Hamilton 020 7861 3232 Bank of Scotland Corporate:James MontgomerieOffice Phone 0131 243 7016Out of office number 0845 606 6696Mobile 07917 067485Email [email protected] Notes to EditorsAbout Panmure Gordon • Panmure Gordon is a UK-focused corporate and institutional stockbroker which provides corporate finance advice, distributes and trades securities and publishes investment research on behalf of a wide range of clients • The firm is one of the oldest established stockbrokers in the City, having been founded in 1876 by Harry Panmure Gordon • The business merged with Durlacher Corporation Plc at the end of April 2005 and is focused on UK equities, ranging from FTSE 100 to fast growing AIM stocks • Panmure Gordon is quoted on AIM (PMR.L) • One third of the Company's Ordinary shares are held on behalf of management and staff with approximately a further third owned by UKPG Holdings LLC, which is in turn owned by LFCM Holdings LLC • Panmure Gordon currently advises or is stockbroker to approximately 100 companies • Its institutional client base is served by a very experienced sales team and supported by in-depth research on more than 250 companies and 300 investment trusts • For more information on Panmure Gordon please visit http://www.panmure.com • For more information on Panmure Capital please visit http:// www.panmurecapital.com Bank of Scotland Corporate, part of HBOS plc, has a reputation for excellence inthe provision of corporate finance, delivering innovative funding solutionsacross a range of markets. With experience across many areas of corporatefinance, including Joint Ventures, Integrated Finance, Structured Finance,Acquisition Finance, Infrastructure Finance and Housing Finance, Bank ofScotland can draw in an expert pool of professionals with proven track records.Bank of Scotland provides funding to more Management Buy-Outs than any otherbank in both the UK and Europe and is now recognised as the top arranger for PFI/PPP deals. Bank of Scotland Corporate employs over 8,300 employees. Totallending at the end of 2004 stood at £78.8 billion. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
PMR.L