This announcement contains inside information as stipulated under the Market Abuse Regulation (EU) no. 596/2014 ("MAR"). SHEARWATER GROUP PLC

Transcription

1 THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. This annuncement cntains inside infrmatin as stipulated under the Market Abuse Regulatin (EU) n. 596/2014 ("MAR"). SHEARWATER GROUP PLC Prpsed 30.3 millin Acquisitin Prpsed Placing, Open Offer and Suspensin f trading 17 August 2018 Shearwater Grup plc (AIM: SWG) ("Shearwater", the "Cmpany" r the "Grup"), the digital resilience grup, has tday entered int a cnditinal agreement t acquire the entire issued share capital f Brkcurt Slutins Limited ("Brkcurt"), a leading independent UK-based cyber security slutins cmpany, fr ttal cnsideratin f 30.3 millin (the "Prpsed Acquisitin"). Highlights Established in 2005, Brkcurt specialises in the prvisin f cyber security and netwrk slutins within cmplex, advanced threat landscapes Winning ver 20 industry awards t date, Brkcurt has lngstanding custmer relatinships with multiple FTSE 100 and FTSE 250 cmpanies acrss a variety f industry sectrs Brkcurt has a strng track recrd f prfitable perfrmance and cash generatin fr the financial year ended 31 March 2017, Brkcurt generated unaudited revenue f 22.2 millin and 2.8 millin f EBITDA Prpsed Acquisitin represents a transfrmatinal deal fr Shearwater: substantially bradens the Grup s cyber security slutins and services capability, facilitating access t a cmplementary, large enterprise client base creates a strng platfrm t drive rganic and acquisitins grwth, within a fragmented cyber security services and slutins market access t a highly experienced management team remaining with the Grup t lead the expansin f Brkcurt, and supprt the further develpment f the business int cyber security and managed service slutins Enlarged Grup expected t be cashflw psitive fllwing acquisitin Ttal cnsideratin f 30.3 millin, payable millin in cash and 7.35 millin in Cnsideratin Shares Prpsed placing f between apprximately 25 millin and 30 millin and pen ffer f up t 1 millin t fund the Prpsed Acquisitin and prvide additinal wrking capital fr the Enlarged Grup David Williams, Chairman f Shearwater, said: "This transfrmatinal acquisitin prvides us with a substantial platfrm frm which we can grw rganically and by further acquisitins. "One f the key elements f ur buy and build strategy is that the management teams stay with the business and becme active parts f the enlarged grup I am therefre delighted that Phil, Dene and the Brkcurt team are jining us. "As well as being strategically and peratinally a majr develpment fr us, this transactin will als bring a step change in ur scale and breadth f ffering, and ntably it will make us cashflw psitive fllwing cmpletin." Phil Higgins, C-funder and Chief Executive Officer f Brkcurt, said:

2 "We had a number f ptins t develp and grw ur business, but were very much drawn t jining Shearwater wing t ur shared visin and the real pprtunity t be part f a rapidly grwing PLC. This unity prvides us with the resurces, additinal industry expertise and supprt t scale the business in delivering a brader slutins ffering t ur existing and prspective custmers. "We are delighted t be jining Shearwater at such a pivtal time in Brkcurt s develpment and we very much lk frward t realising ur ambitins fr the business as part f the wider grup." Enquiries: Shearwater Grup plc David Williams Michael (M) Stevens Cenks Securities plc NOMAD and Brker Max Hartley NOMAD Julian Mrse / Michael Jhnsn Sales Instinctif Partners Financial PR Adrian Duffield / Chantal Wlcck / Kay Larsen c/ Instinctif Partners +44 (0) shearwater@instinctif.cm +44 (0) Acquisitin Agreement The Cmpany has tday entered int a cnditinal agreement t acquire the entire issued share capital f Brkcurt fr ttal cnsideratin f 30.3 millin. The Prpsed Acquisitin will be subject, inter alia, t sharehlder apprval at a general meeting, raising the funds necessary t finance the Prpsed Acquisitin thrugh the Prpsed Placing and Prpsed Open Offer and Admissin (all as defined belw). The ttal cnsideratin f 30.3 millin will be satisfied by cash cnsideratin f millin with the balance f 7.35 millin t be satisfied by the issue f new rdinary shares in the capital f the Cmpany ("Ordinary Shares") at the placing price (the "Cnsideratin Shares"). The Cnsideratin Shares will be subject t a lck in arrangement fr a perid f 12 mnths fllwing cmpletin f the Prpsed Acquisitin, and custmary rderly market prvisins fr a futher 12 mnths fllwing the expiry f the lck in arrangement. Infrmatin n Brkcurt Slutins Limited Brkcurt was established in 2005 by the current management team with the aim f prviding secure netwrking and cyber security slutins t UK-based crprate and public sectr custmers. Building upn their prir experience f wrking within sftware vendrs, hardware resellers and netwrk slutin prviders, management believed there was an pprtunity t create a leading secure netwrking and cyber security slutins business, which culd challenge the market leading slutin prviders and traditinal resellers, thrugh a differentiated custmer service prpsitin, which was mre creative and agile, held service delivery management at the cre f the ffering, and was able t access "best in breed" technlgy slutins in rder t meet a custmer's secure netwrking requirements. Initially fcused n the financial services sectr, Brkcurt has since expanded its custmer base and nw serves a variety f clients within technlgy, media, telecms, retail, energy and utilities, healthcare, transprt and lgistics, industrial manufacturing, public sectr and insurance markets. Over the past 13 years, Brkcurt s secure netwrking and cyber security slutins prpsitin has grwn substantially and has develped a reputatin fr high levels f custmer service which has enabled it t build lng standing relatinships with its client base. The business has wn 20 industry awards, including Security Service Prvider f the Year, Custmer Service Prvider f the Year, Security Reseller f the Year, and has been included within the Lndn Stck Exchange s tp 1000 cmpanies t Inspire Britain The Cmpany believes that the Prpsed Acquisitin represents a transfrmatinal deal, with the Enlarged Grup expected t be cashflw psitive fllwing cmpletin f the Prpsed Acquisitin. The Prpsed Acquisitin wuld substantially braden Shearwater s cyber security slutins and services capability, prvide access t a cmplementary client base aligned t larger enterprises, and creates a strng platfrm f scale t effect cnslidatin at the prtfli cmpany level.

3 Brkcurt has a strng track recrd f prfitable perfrmance and cash generatin. Fr the financial year ended 31 March 2017, Brkcurt generated unaudited revenue f 22.2 millin and 2.8 millin f EBITDA. Fr the financial year ended 31 March 2018, Brkcurt generated unaudited revenue f 20.9 millin and an adjusted EBITDA f 2.0 millin, as a result f increased business develpment activity during the year, which has resulted in a number f significant new custmer cntract wins falling int financial year ending Prpsed placing and pen ffer In rder t finance in part the Prpsed Acquisitin and t prvide additinal wrking capital fr the enlarged Grup (the "Enlarged Grup") fllwing the Prpsed Acquisitin, the Cmpany is prpsing t raise between apprximately 25 millin and 30 millin (befre expenses) thrugh a placing f new Ordinary Shares (the "Placing Shares") (the "Prpsed Placing"). The Cmpany is als prpsing t raise up t a further 1 millin by way f an pen ffer f new Ordinary Shares (the "Open Offer Shares") t existing qualifying sharehlders f the Cmpany (the "Prpsed Open Offer"). The Prpsed Acquisitin wuld cnstitute a reverse takever under rule 14 f the AIM Rules fr Cmpanies (the "AIM Rules") and will therefre be cnditinal upn, inter alia, sharehlder apprval at a general meeting, n material adverse change having ccurred in respect f Brkcurt and the admissin f the Placing Shares and the Cnsideratin Shares and admissin f the Enlarged Grup t trading n AIM ("Admissin"). As such, there can be n certainty that the Prpsed Acquisitin will prceed. The Cmpany intends t publish a cmbined sharehlder circular and AIM admissin dcument (the "Circular") in relatin t the Prpsed Acquisitin and the Enlarged Grup in due curse. The Cmpany will make a further annuncement in due curse. Suspensin f trading In accrdance with rule 14 f the AIM Rules, the Cmpany's Ordinary Shares will be suspended frm trading n AIM with effect frm 7:30 a.m. tday. The Ordinary Shares will remain suspended until such time that either the Circular has been published r an annuncement has been released cnfirming that the Prpsed Acquisitin shall nt prceed. Grup Strategy The Grup is fcused n building a UK-based grup prviding digital resilience slutins and services. Thrugh the applicatin f its buy, fcus, grw strategy, the Grup aims t identify investment and acquisitin pprtunities where the target cmpany has a leading prduct, slutin, service r cnsulting capability whse ptential can be unlcked thrugh active management and capital investment. Thrugh recent acquisitins and a number f rganic grwth initiatives, the Grup is at the early stages f building a brad prtfli f infrmatin security, gvernance, risk and cmpliance, cyber and cyber security platfrms, which aim t meet the ever-increasing digital resilience demands frm the Grup's custmers. This will prvide the Grup s current and prspective sharehlders with expsure t a large and rapidly grwing sectr thrugh a prtfli apprach, which aims t balance risk and return in a highly dynamic and ften unpredictable perating envirnment. Management and Bard The Bard f Directrs f Shearwater will remain unchanged fllwing cmpletin f the Prpsed Acquisitin and Admissin. Brkcurt s tw c-funders, Phil Higgins and Dene Stacey, perate as Chief Executive Officer and Chief Operating Officer f Brkcurt respectively, and will remain in their current psitins, reprting directly t Shearwater as the parent cmpany. Imprtant ntice This annuncement is fr infrmatin purpses nly and is nt intended t and des nt cnstitute, r frm part f, any ffer r invitatin t purchase, subscribe fr r therwise acquire r dispse f, r any slicitatin t purchase r subscribe fr r therwise acquire r dispse f, any securities in the United States, Republic f Suth Africa, Australia, Canada r Japan r any ther jurisdictin in which such an ffer r slicitatin may lead t a breach f any applicable legal r regulatry requirements. Persns needing advice shuld

4 cnsult with an independent financial adviser authrised under the Financial Services and Markets Act 2000, as amended ("FSMA"), wh specialises in advising n the acquisitin f shares and ther securities, if that persn is in the United Kingdm, r any apprpriately authrised persn under applicable laws, if that persn is lcated in any ther jurisdictin. The infrmatin cntained in this annuncement is nt fr release, publicatin r distributin t persns in any jurisdictin where t d s might cnstitute a vilatin f lcal securities laws r regulatins. This annuncement has been issued by and is the sle respnsibility f the Cmpany. The infrmatin cntained in this annuncement is fr backgrund purpses nly and des nt purprt t be full r cmplete. The infrmatin in this annuncement is subject t change withut ntice. Upn the publicatin f this annuncement via a Regulatry Infrmatin Service, this inside infrmatin is nw cnsidered t be in the public dmain. If yu have any queries n this, then please cntact David Williams, Chairman f the Cmpany (respnsible fr arranging release f this annuncement) via Instinctif. This annuncement may cntain and the Cmpany may make verbal statements cntaining "frwardlking statements" with respect t certain f the Cmpany's plans and its current gals and expectatins relating t its future financial cnditin, perfrmance, strategic initiatives, bjectives and results. Frwardlking statements smetimes use wrds such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "gal", "believe", "seek", "may", "culd", "utlk" r ther wrds f similar meaning. By their nature, all frward-lking statements invlve risk and uncertainty because they relate t future events and circumstances which are beynd the cntrl f the Cmpany, including amngst ther things, United Kingdm dmestic and glbal ecnmic business cnditins, market-related risks such as fluctuatins in interest rates and exchange rates, the plicies and actins f gvernmental and regulatry authrities, the effect f cmpetitin, inflatin, deflatin, the timing effect and ther uncertainties f future acquisitins r cmbinatins within relevant industries, the effect f tax and ther legislatin and ther regulatins in the jurisdictins in which the Cmpany and its affiliates perate, the effect f vlatility in the equity, capital and credit markets n the Cmpany's prfitability and ability t access capital and credit, a decline in the Cmpany's credit ratings; the effect f peratinal risks; and the lss f key persnnel. As a result, the actual future financial cnditin, perfrmance and results f the Cmpany may differ materially frm the plans, gals and expectatins set frth in any frward-lking statements. Any frward-lking statements made in this annuncement by r n behalf f the Cmpany speak nly as f the date they are made. Except as required by applicable law r regulatin, the Cmpany expressly disclaims any bligatin r undertaking t publish any updates r revisins t any frward-lking statements cntained in this annuncement t reflect any changes in the Cmpany's expectatins with regard theret r any changes in events, cnditins r circumstances n which any such statement is based. The distributin f this annuncement in certain jurisdictins may be restricted by law. N actin has been taken by the Cmpany r Cenks Securities plc ("Cenks") that wuld permit an ffering f such shares r pssessin r distributin f this annuncement r any ther ffering r publicity material relating t such shares in any jurisdictin where actin fr that purpse is required, ther than the United Kingdm. Persns int whse pssessin this annuncement cmes are required by the Cmpany and Cenks t infrm themselves abut, and t bserve, such restrictins. The infrmatin cntained in this annuncement may nt be distributed, published, reprduced, transmitted r therwise made available in whle r in part r disclsed by recipients t any ther persn and may nt be reprduced in any manner whatsever. Any frwarding, distributin, reprductin, r disclsure f any infrmatin cntained in this annuncement in whle r in part is unauthrised. Failure t cmply with these restrictins may cnstitute a vilatin f the US Securities Act f 1933, as amended r the applicable laws f ther jurisdictins. Subject t certain exemptins, the securities referred t in this annuncement may nt be ffered r sld in the United States, Australia, Canada, Japan, Suth Africa r certain ther jurisdictins r fr the accunt r benefit f any natinal resident r citizen f certain jurisdictins. N prspectus will be made available in cnnectin with the matters cntained in this annuncement and n such prspectus is required t be published. Persns needing advice shuld cnsult an independent financial adviser. Cenks, which is authrised and regulated in the United Kingdm by the Financial Cnduct Authrity is acting as nminated adviser and brker t Shearwater in cnnectin with the Prpsed Acquisitin and the Prpsed Placing. Cenks is acting exclusively fr Shearwater and n ne else in cnnectin with the Prpsed Acquisitin and the Prpsed Placing and will nt be respnsible t anyne ther than Shearwater fr prviding the prtectins affrded t clients f Cenks r fr prviding advice in relatin t the Prpsed Acquisitin and the Prpsed Placing r the cntents f this annuncement r any transactin, arrangement r matter referred t herein.

5 Apart frm the respnsibilities and liabilities, if any, which may be impsed n Cenks by the FSMA r the regulatry regime established thereunder, Cenks des nt accept any respnsibility whatsever fr the cntents f this annuncement, and makes n representatin r warranty, express r implied, fr the cntents f this annuncement, including its accuracy, cmpleteness r verificatin, r fr any ther statement made r purprted t be made by it, r n its behalf, in cnnectin with the Cmpany r the Placing Shares r the Prpsed Placing, and nthing in this annuncement is r shall be relied upn as, a prmise r representatin in this respect whether as t the past r future. Cenks accrdingly disclaims t the fullest extent permitted by law all and any liability whether arising in trt, cntract r therwise (save as referred t abve) which it might therwise have in respect f this annuncement r any such statement.