World Law Group - Quick Facts

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2 World Law Group - Quick Facts 65 Countries 5 Continents 15,500+ Lawyers 52 Member Firms More than 1,900 collaborations by member firms in 2013 about 7.5 per business day 300+ offices Our Global Network of Premier Legal Counsel

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4 Listing in the Centre of Global Finance London Stock Exchange Group IPO Seminar Alex Lehmann Head of Americas October 2014

5 Contents 1) Overview of London Stock Exchange Group 2) London The Home for International Companies 3) Appendices Note: GBP/USD = 1.67 used where applicable 5

6 1) Overview of London Stock Exchange Group 6

7 A Leading International Exchange Group CAPITAL MARKETS Primary Markets Trading POST TRADE SERVICES Main Market AIM Professional Securities Market Specialist Fund Market MTA AIM Italia MIV LCH Clearnet CC&G Monte Titoli INFORMATION SERVICES RNS Proquote Information Terminals Historical & Reference Data UnaVista Transaction reporting and reconciliations Real Time Data FTSE Indices MillenniumIT Capital Markets Technology & Services TECHNOLOGY Hosting and Connectivity Gatelab Front Office trading Solutions Source: 7

8 2) London The Home for International Companies 8

9 Why List on LSE Access to deepest pool of international capital in the world Proven level of sustained liquidity Access to incremental sell-side research coverage An exit route for earlier stage investors Ability to incentivise key employees commitment Significantly enhance profile & visibility, particularly with customers & suppliers Currency to fund business acquisitions & expand into new markets 9

10 LSE Listing: Access to Global Community Number of companies Our issuers operate in more than 115 different countries across the world Source: London Stock Exchange statistics. Based on country of primary business. 10

11 London Leads the Way in International Equity USDbn (% change to Q3 2014) 1,400 1,200 1, % Equity AUM held in international portfolios, by exchange * 4.8% 12.1% 9.9% -7.9% 4.1% -2.5% LSE NYSE NASDAQ HKSE EN Paris ASX EN Amsterdam 22.8% -8.4% London listed companies continue to enjoy support of investors based outside London. London investors exposure to international equity remained largely flat this quarter, signalling a slow down from the consistent increase witnessed in the last five consecutive quarters. -0.8% Bovespa TSX SGX Domicile of Top 50 investors in listed securities by country UK EMEA (ex-uk) 16% US HK North America 83% North America 30% UK 40% Asia Pacific (ex- China) 52% China 34% Asia Pacific 12% Lat America 2% Asia Pacific 6% Lat America UK 1% 4% EMEA (ex-uk) 6% North America 5% EMEA 7% Lat America 2% Source: Facset and LSE calculation, October 2014 *international portfolios defined as investment in companies different to the country of domicile of the portfolio manager 11

12 US Businesses Listed in London Main Market AIM SFM ATT Total No. of companies Total market capitalization (USD) 2.1trn 3.3bn 120m 229m 2.1trn Total money raised by companies from the USA on London Stock Exchange since January 2010 (USD) 5.2bn Sector distribution by market cap Aerospace & Defense Oil Equipment, 6% Services & Distribution 6% Oil & Gas Producers 6% Software & Computer Services 8% Fixed Line Telecomms 10% Other 12% Banks 19% General Industrials 16% Pharma & Biotech 17% Source: LSE data October

13 A Snapshot of AIM Profile of AIM companies Admissions to AIM 2009 to September 2014 There are 1,099 companies (222 international businesses) on our AIM market with an aggregate value of $124.7bn Since 1995 over $147bn has been raised on the market ($83bn through further issues) All 10 ICB Industries are represented by these AIM companies Number of admissions UK Int'l Fundraisings on AIM 2009 to September Industries represented by number of companies Further issues Technology, 119 Oil & Gas, 132 Money raised ($bn) New issues Financials, 206 Utilities, 15 Telecomms, 14 Basic Materials, 175 Industrials, *ICB industry classification Consumer Services, 118 Health Care, 73 Consumer Goods, 62 Source: LSE statistics, September

14 London Hosts Global Peer Groups # of companies by Exchange 3,500 LSE, 2,351 Borsa Italiana, 361 EN Paris, 913 EN Amsterdam, 135 EN Brussels, 346 EN Lisbon, 63 TSX-V, 2,170 TSX, 911 # of Companies 3,000 2,500 2,000 1,500 1, Aggregate Market Cap by Exchange 0 LSEG NYSE NASDAQ ASX HKSE TMX DB Euronext 26.1 LSE 73% Borsa Italiana 27% EN Lisbon EN 2% Amsterdam 22% EN Brussels 12% EN Paris 64% TSX-V 2% TSX 98% Aggregate Market Cap (USD Trn) LSEG NYSE NASDAQ ASX HKSE TMX DB Euronext Source: Bloomberg September

15 London is the Home for International Companies International companies on major exchanges More international companies choose London for the listing home than any other exchange. Close to 40% of all international companies are listed in London. By Market Cap LSEG 42% NYSE 46% NASDAQ 6% ASX 2% DB 1% HKSE 1% Euronext 1% TMX 1% Thanks to tried and tested market expertise, developed financing infrastructure and internationally minded investors community, London is the home of international companies. 3,500 3,000 2, By # of Companies LSEG 36% NYSE 21% NYSE 18% ASX 4% HKSE 2% TMX 7% Euronext 5% Euronext 7% # of Companies* 2,000 1,500 1, , ,536 2,074 2,020 2,010 1, , LSEG NASDAQ ASX HKSE TMX DB Euronext NYSE Domestic International Source: Bloomberg September 2014 * International classification relies on company s Country of Domicile 15

16 Superior Analyst Coverage # of Analysts Covering International Companies 3,500 3,000 2,500 2,000 1,500 1, % 10% 3% 4% 5% 11.7 Average of analyst recommendations per London listed int l company LSEG NASDAQ TMX HKSE Euronext ASX DB 3% 4% 35% 30% 25% 20% 15% 10% 5% 0% % = # of Analysts Covering Int'l Companies/ Total # of Analyst Total # of Analysts Covering Int'l Companies % of Overall Analysts Covering Int'l Companies 14.0 Average of Analysts Recommendations- Int'l companies* Analysts raise profile for listed companies which they cover Analyst reports deepen issuers liquidity potential London listed companies have higher analyst coverage compared to peers - LSEG Euronext TMX NYSE NASDAQ HKSE ASX DB Source: Bloomberg, *excluding investment funds and smaller corporates 16

17 Connecting Investors Around the World Selected major Institutional investors in London listed equities Americas Capital Research Vanguard SSgA Funds Fidelity Blackrock Thornburg Investment Artisan Partners Alliance Bernstein T. Rowe Price Caisse de dépôt et placement du Québec Itau Unibanco Brazil Europe Blackrock Legal & General Scottish Widows Invesco M&G Standard Life AXA Societe Generale Alecta Pension DWS Investment Swedbank Robur Allianz Global Investors BNP Paribas Union Investment Privatfonds GMBH Norges Bank Africa and Middle East QIA P.I.C South Africa Kuwait Investment Authority Investec ABC Islamic Bank Abu Dhabi Investment Authority Asia Pacific State Administration of Foreign Exchange (China) GIC BNY Mellon Hong Kong Blackrock Japan Mitsubishi UFJ Trust Sumitomo Mitsui Aberdeen Asset Management Asia Hang Seng Investment London trading hours GMT Source: Factset 17

18 London Peer Diversity Across Sectors Telecom 5% Technology 1% Utilities 4% Basic Materials 10% Telecom 3% Technology Utilities 3% 2% Oil & Gas 5% Basic Materials 6% Consumer Goods 6% Oil & Gas 16% Industrials 7% Health Care 9% Consumer Goods 17% Consumer Services 9% Industrials 20% FTSE 100 FTSE 250 Health Care 3% Consumer Services 19% Financials 22% Financials 33% ICB Industry classification by market capitalisation in USD. Source: Bloomberg, August

19 Global Profile Romanian power supplier Electrica raised 1.95 billion lei ($ million) in an initial public offering on Bucharest and London stock exchanges June 2014 Gulf Marine Services Seeks to Raise $100 Million From London IPO Feb 2014 TBC Bank, a Georgian lender, said it will raise as much as $262.6 million in the nation s largest initial public offering in London. June 2014 Allied Minds, an IP specialist with access to the US military s R&D pipeline, has set its initial public offering price at 190p, valuing the Boston-based company at 398m January 2013 Nigerian oil firm Seplat, the first ever company to be listed in both London and Lagos, was yesterday valued at over 1bn in its stock market debut April

20 Lowest IPO Fees Among Major Exchanges Cost of listing in London is further reduced by: Regulation which is widely tested and balanced Highly competitive legal services which have experience of listing process Timing of the admission process is clearly communicated Direct communication with the regulator and the Exchange All disclosures in English Comparison of underwriting costs (%) 2 1 Based on gross underwriting fees % (excluding AIM). Source: Dealogic, LSEG data August YTD LSE NYSE Nasdaq HKSE TMX ASX 20

21 3) Appendices 21

22 Appendix I Selected Case Study 22

23 Company Market Sector Trading System Country of incorporation Company Details Company profile Experian Main Market Support Services SETS Jersey Experian is the leading global information services company, providing data and analytical tools to clients around the world. Experian helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. They help individuals to manage their credit relationships and protect against identity theft. The company employs around 16,000 people in 39 countries. Revenue for FY14 was $4.8bn. North America contributes 50% of Experian s revenue, with 11% from Latin America, 20% from the UK & Ireland and 19% from EMEA & Asia Pac Experian is a constituent of the FTSE 100 Index Transaction Details Admission Date 11 th October 2006 Money raised at admission Current Market Cap Lead Managers Listing story $1.5bn $14.9bn Merrill Lynch UBS JPM Cazenove Experian listed on the Main Market of the London Stock Exchange in October 2006, following the demerger of GUS into Home Retail Group and Experian. The company admitted 142m ordinary shares at a price of $10.44 a share, raising $1.5bn in proceeds. Since IPO, the stock has traded up 67% Price rebased to Oct-06 Oct-08 Oct-10 Oct-12 Oct-14 Experian Top institutional investors FTSE 100 Index Value held in USD millions Artisan Partners 767 Harris Associates 756 Legal & General Investment Management 455 Norges Bank Investment Management 277 Thornburg Investment Management 231 OppenheimerFunds, 205 Massachusetts Financial Services Co. 204 Scottish Widows Investment Partnership. 201 Jupiter Asset Management 200 The Vanguard Group 179 Source: Bloomberg & Factset October 2014 Price performance rebased to 100 as of IPO date 23

24 Appendix II Equity Market Backdrop 24

25 Global IPO Market - Robust Q # of IPOs Top 5 Exchanges by # IPO Q Borsa Italiana Nasdaq LSEG HKSE NYSE ASX Number of IPOs* (Q3 2014) no IPO Global IPO proceeds for Q reached $70bn, falling by 13% compared to the previous quarter. Geopolitical instability as well as the uncertainty surrounding the result of the Scottish referendum combined to make for a relatively weak quarter in London compared to the $13bn raised in Q2. The dining & lodging and healthcare sectors raised the most capital (vs Q2: retail and finance), largely owing to the significant proceeds raised by SSP and Spire Healthcare in the quarter. USD bn 39.8bn Top 5 Exchanges by Money Raised at IPO Q Borsa Italiana NYSE HKSE LSEG Nasdaq ASX Source: Dealogic, October 2014 *Number of IPOs by listing venue Note: GBP/USD conversion rate of 1.67 applied 25

26 Strong London Market Activity Summary Fundraising and admissions activity on our markets 110 IPOs in 2014 (52 Main Market, 58 AIM) across 33 sectors 95% increase on the 56 IPOs for the same period in $25.9 billion raised at IPO (Main Market: $22.4bn; AIM: $3.5bn) 161% increase compared to $9.9 billion raised at IPO in the same period last year. USD bn Fundraising at IPO ($bn) Further fundraising ($bn) Number of IPOs Number of IPOs Another $36.6bn billion in further issues (Main Market: $32.4bn; AIM: $4.2bn) compared to $27.2 billion over the same period last year Main Market AIM 10 Number of IPOs Aggregate market value ($billion) Fundraisings at admission ($billion) Average market value ($million) Average IPO size ($million) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Source: Dealogic and London Stock Exchange statistics as at 30 September Note: SFM is incorporated in Main Market stats for the purposes of this summary 26

27 UK IPO Market Has Outperformed Investments in London IPOs have delivered 10.7% excess returns, compared to the relevant FTSE benchmark indices The 52 Main Market IPOs to the end of August outperformed, on average, the FTSE All Share Index by 5% The 57 IPOs on AIM that took place in the same period outperformed, on average, the FTSE AIM All Share Index by 16% 40.0% Main Market 30.0% 20.0% 10.0% KWE MCLS AO LNTR GRIT SMIF PETS PLND CIR GMS NSA CREI JLEN BRIT COPL JE SEPL NHL PLP EXO CMBN NESF CARD BCRE SAGA P2P CLG OSB TBCB GMD FAIR PUMX BME FDM FAN ZPLA FEET ALM TSB AA RIV SIT ESP ELSA IEH MTMY SQN SSPG SPI BGLF AUCT GNI Average 0.0% -10.0% -20.0% -30.0% -40.0% AIM 90.0% 70.0% 50.0% 30.0% 10.0% RM2 CFHL HUR MANX DDDD ARL SMTG DX KOOV BOO DAL MSMN XLM XSG HZD SCHO VLG SCH RAME TEK HAYD BAGR EYE RDT SPRP SSTY RXB GLS LME CAKE FLO SHOE MARI NAH SIR MYSL ZBO CDOG IMO AFHP EZH GINV ABZA CLST JSI ERGO AMPH DJI EPWN BCN-CA ULS GTS PFIT SAVP FFX ATQT MED Average -10.0% -30.0% -50.0% Source: Factset and LSE calculations, September

28 Strong Private Equity Issuance The London market continues to feature financial sponsor deals in continues to see a favourable market for private equity-backed IPOs on the London market with 29 businesses successfully floating and raising a combined $14.7bn Almost 60% of money raised in 2014 has come from financial sponsor backed IPOs Average % of IPO size consisting of secondary selldowns in 2014 YTD LSEG NYSE Nasdaq 0-250m m 500m-1bn 1bn+ Pricing date Company name Sector Private equity sponsor(s) Mkt cap at IPO $m IPO size $m Secondary portion of offering (%) Price Chg since IPO (%) 25-Feb-14 McColl's Retail Group Retail Coller Capital % 28-Feb-14 Lenta Retail TPG Capital, VTB 4, % 12-Mar-14 Poundland Retail Warburg Pincus 2, % 12-Mar-14 Pets at Home Retail KKR 3, % 14-Mar-14 Gulf Marine Services Transportation Gulf Capital % 28-Mar-14 Brit Insurance Insurance Apollo, CVC 2, % 3-April-14 Just Eat Consumer Index, Vitruvian * 2, % 11-Apr-14 Cambian Group Healthcare GI Partners % 11-Apr-14 Exova Group Professional Services Clayton Dubilier & Rice % 11-Apr-14 Polypipe Chemicals Caird Capital % 15-May-14 Card Factory General Retailers Charterhouse 1, % 23-May-14 Saga Financial Services Permira, Charterhouse, CVC 3, % 5-Jun-14 OneSavings Bank Financial Services JC Flowers % 11-Jun-14 B&M European Value Retail Retail Clayton Dubilier & Rice 4,477 1, % 18-Jun-14 Volution Group plc Machinery TowerBrook % 20-Jun-14 FDM Group Ltd Computers & Electronics Inflexion % 23-Jun-14 AA plc Auto/Truck CVC, Charterhouse, Permira 2,356 2, % 09-Jul-14 SSP Group Dining & Lodging EQT Partners 1, % 18-Jul-14 Spire Healthcare Healthcare Cinven 1, % Source: Bloomberg, Dealogic, October 2014 * Other Financial Sponsors include: SM Trust, Redpoint Ventures and Greylock Partners 28

29 Significant Further Sponsor Monetisations Solid performance of PE-backed IPOs in the secondary market has allowed PE firms to sell down further tranches through accelerated transactions Investor demand has allowed placings of a significant number of days volume at relatively tight discounts to market Date Company name Sector Private equity sponsor % of company sold Block size ($m) Block size (x ADTV) % discount to previous close % stake remaining with sponsors 14-Aug-13 Countrywide Real Estate Alchemy, Oaktree, Apollo 26-Sep-13 HellermannTyton Group Electronic & Electrical Equipment Oaktree: 9.3% Apollo: 6.7% x 4.5% Alchemy: 5.9% Oaktree: 27.6% Apollo: 10.9% Doughty Hanson 20.9% x 6.4% 21.6% 27-Sep-13 Countrywide Real Estate Alchemy, Oaktree, Apollo Alchemy: 5.9% x 3.6% 12-Nov-13 Countrywide Real Estate Oaktree, Apollo Apollo: 10.22% x 4.3% 20-Mar-14 HellermannTyton Group Electronic & Electrical Equipment Alchemy: 0.00% Oaktree: 27.6% Apollo: 10.9% Oaktree: 27.6% Apollo: 0.00% Doughty Hanson 21.6% x 5.6% 0% 20-Mar-14 Arrow Global Financials RBS Asset Management 23.9% x 2.1% 0% 08-Apr 14 Stock Spirits Group Beverages Oaktree 36.8% x 10.6% 0% 01-May-14 Foxtons Real Estate BC Partners 7.8% x 2.0% 14.5% 13-Jun-14 Merlin Entertainments Leisure & Recreation Blackstone, CVC 9.9% x 0.2% 0% 05-Sep-14 Foxtons Real Estate BC Partners 7.3% x 3.6% 7.2% Source: Bloomberg, Dealogic, September 2014 *ADTV calculated over previous 20 trading days 29

30 Lessons Learned from Recent IPOs Observation Prepare Ahead Early Look Investor Engagement Adapt to Changing Demand Minimising Execution Risk Comment In a crowded primary market calendar, early preparation is critical Very hard to accelerate an IPO process, so early preparation enhances ultimate timing flexibility As activity has increased, pressures / bottlenecks likely to increase within advisory community choosing the right advisers therefore increasingly important Buyside fund managers have been vocal in the past about wanting to meet management teams ahead of an IPO This practice of early look engagement with a number of the key investors has been very valuable: Feedback for the Company and owners at an early stage on the business model, the management team and likely valuation parameters Investors get an opportunity to build a rapport with management at this early stage, enhancing their likely participation at the IPO Information at this stage can be carefully managed, such that management teams are not held to specific forecasts later at the time of the IPO In many of the UK IPOs in , participation from US investors (who were significantly underweight Europe) typically totalled 30-50% of gross demand; while this tailed off a little towards the end of Q2, fund flows from the US into Europe still constructive Appetite from retail both directly and through intermediaries has been strong and merits real consideration, especially for consumeroriented businesses Important to consider complementary distribution platforms in IPO syndicates to tap all of these pockets Increased market volatility has created headwinds for some IPOs (e.g. FatFace, WizzAir, Miller Homes, Aldermore postponing) However, pipeline remains full a number of transactions announced in mid-september as soon as Scotland referendum uncertainty was removed (e.g. Virgin Money, BCA) With plenty of IPO supply and the broader market headwinds, investors will continue to be selective and differentiation of equity story has become even more important Investors reiterating that demand still there for the right stories at the right valuation across a wide variety of sectors Seeing structures to de-risk IPO execution (shortening timetables, anchor / cornerstone orders etc.) 30

31 Appendix III Overview of IPO Process and Preparation 31

32 IPO Process Overview Pre-IPO Preparation Preparation of the offering IPO Execution Phase 4-6 months months 1 month PUBLIC PROCESS Company preparation IPO Process Preparation of the listing Preliminary Valuation Analyst Presentation Investor Education Management Roadshow, Bookbuilding Aftermarket IPO Readiness Define business plan and strategy Financials/ accounting/ disclosure Capital structure/ dividend policy Corporate structure/ governance Management incentivisation Internal controls/ systems Appoint advisers / kick-off meeting Develop equity story Offer structure: Type & size Timing Listing location/ target investors Syndicate structure Options/ESOP Initial assessment of demand Due diligence Prepare offering prospectus and other legal documents Financial statements prepared for inclusion in prospectus Finalise business plan / strategy / equity story Finalise offer structure Develop marketing strategy Preliminary valuation Set initial valuation range Shareholders and management s views on price, size, structure Analysts meeting/ presentation Analysts draft research reports Factual accuracy review Publication of research Signals public launch of IPO Investor targeting and education Sound out key investors feedback re: issues/concerns + initial valuation thoughts Monitor market Analyse feedback Refine offer size, valuation Publish preliminary prospectus Management roadshow Analyse demand/ feedback Sign placing agreement Pricing and allocation Stabilisation Greenshoe Market-making Ongoing research Investor relations Ongoing obligations Preparation for International Market Plan the execution phase of potential IPO Ensure basic readiness of Company for the listing Proceed with analysts presentation Proceed with investor education Launch (size, price range decision) Price, sign subscription agreement and allocate shares Life as a Plc 32

33 Pre-IPO: Key Preparation Ingredients Pre-IPO Company Preparation Kick-off Meeting Start Due Diligence / Prospectus Drafting Business Plan / Financial Structure Analyst Presentation Investor Education Valuation / Price Range Management Roadshow Bookbuilding Pricing and Allocation Aftermarket T months T - 2 months T - 1 month T - 2 weeks T T + Business Plan/Strategy and Equity Story Financials/ Accounting/ Disclosure The business plan translates the strategy into numbers: Should cover both short-term and medium-term projections Financial targets & funding needs Should be credible and deliverable Will draw comparison vis-à-vis comparables and help to drive relative positioning The equity story (alongside the business plan/strategy) will drive the marketing of the IPO key pillar of all offering-related documentation underpinning the valuation that investors are prepared to ascribe to the Company Together with the Company and the bookrunner(s) will develop the business plan/strategy and equity story This will be a priority in the months leading up to the formal IPO kick-off and during the first few weeks of the formal IPO process Recommendations as to offer size, capital structure and dividend policy/guidance to maximise value will result from this workstream The transaction timetable will hinge around the timely preparation of the accounts Early involvement of international capital markets experts is critical, as early identification of key issues is key Base case financial requirements: 3 years of audited IFRS financial statements Reviewed or audited interim results for current and prior period (if required) Accounting conventions require that the transaction should close within 135 days from the end of the last audited or reviewed reporting period Results will likely have to be completed and audited much earlier than historically was the case Disclosure (segmental, KPIs) will need to target best-in-class benchmarks set by industry peers to meet investor expectations and maximise valuation Internal reporting controls and systems may have to be upgraded 33

34 Pre-IPO: Key Preparation Ingredients (cont d) Pre-IPO Company Preparation Kick-off Meeting Start Due Diligence / Prospectus Drafting Business Plan / Financial Structure Analyst Presentation Investor Education Valuation / Price Range Management Roadshow Bookbuilding Pricing and Allocation Aftermarket T months T - 2 months T - 1 month T - 2 weeks T T + Internal Planning Corporate Governance / Structure / Ownership Offer Structure Selection of Advisors Internal planning ahead of IPO will be important to limit management distraction Formation of core working party with clearly defined roles Working party will need contacts for key areas Finance, Marketing, Operations, Legal and HR Company should designate an internal IPO Project Manager to oversee the transaction and ensure seamless co-ordination between external advisers and internal teams Focus on adequacy and readiness of internal controls & systems for a post-ipo world Company should give thought to installing the appropriate IR officer for IPO and aftermarket Investor Relations has an active participation in the IPO process Corporate governance (and in particular Board composition) is a significant investor issue Objective should be to target best practice, e.g. UK Corporate Governance Code Key to consider Board composition early in process as can require substantial lead time and may otherwise delay IPO Non-executives (as well as executive directors) will need to take responsibility for the prospectus Clear and transparent ownership and legal structure recommended Management incentivisation should also be considered early on Determine offer type, size, listing location and syndicate structure Planned option schemes and employee/retail participation in IPO should also be considered early on Selecting an international legal counsel with adequate expertise in both the legal issues of the industry as well as experience in capital market transactions Selecting auditors with suitable experience and credibility from an investor perspective Clear investor preference for a big four firm Consider appointment of PR firm ahead of launch to manage information flow to the market 34

35 Appendix IV IPO Execution and Marketing Considerations 35

36 Indicative IPO Transaction Timeline Company Financial Legal - 6 months Tax planning IFRS preparation (if needed) Working capital statements Long form financials Forecasts and offer size agreed Suitability and due diligence -3 months Transaction structure and board preparations Discussions with existing shareholders Due diligence Engage with sponsor (if applicable) Audit Financials and valuations Admission Document drafting Early engagement with the UKLA Memorandum and articles of association / underwriting agreement/ Board minutes/ depositary agreement and other documents - 1 month UKLA approval stage Prospectus approved Investors and distribution Investor education and business case Test marketing Early engagement with the UKLA Preparation of research Pre-marketing Pricing model Roadshow Bookbuilding Pricing PR Company profile and story LSE Preliminary discussions and on-going support Admission to trading 36

37 Overview of Financial Information Required for IPO Observation Historical Financial Information Financial Controls Financial Position and Prospects ( FPP ) Long Form Report Working Capital Report Comment 3 years of audited financials for a period ended no more than 6 months from the date of the prospectus 75% of the business must be supported by historical financial information for three years Accounts prepared according to IFRS Appropriate KPIs identified and prepared historically these will be key to the equity story In advance of IPO, Listed Company financial controls must be established Ensures that the Company has adequate controls over its Financial Position and Prospects an IPO pre-requisite Non-executives are focused on accurate and timely management information as it mitigates their personal risk Premium listing regime imposes a stringent set of responsibilities which management has to be ready to meet Timely and accurate reporting and disclosure is a fundamental requirement for a listed company and key to ongoing investor relations Sponsor must be satisfied that established financial procedures are in place which allow the Directors to make timely and proper judgements as to the financial position of the Company on an ongoing basis Expectation at a minimum to provide (i) monthly management accounts, (ii) full management accounts and (iii) annual accounts within 4 months of year end and interim accounts within 2 months Helps the Sponsor and the other syndicate banks fulfil their diligence requirements and conclude on company s suitability for listing Identifies any significant issues for remediation or disclosure in the IPO process Provides building block for analyst presentation and prospectus Ideally should be completed before work on the prospectus is started The Directors must make a working capital statement in the prospectus, that the Company has sufficient working capital for its present requirements for at least 12 months from the date of the prospectus Typically Sponsors will look for sufficient working capital for 18 months Focus on headroom and cash; only committed financing facilities can be included Early engagement of auditors to begin financial IPO readiness is key this is the most common source of delay in IPO processes 37

38 Due Diligence: Key Process Items Financial Due Diligence Will consist of data room due diligence combined with interviews with the Company s CFO, control and internal audit departments and with its auditors The investigation will include, amongst others, management reporting systems, accounting and control, historical financials, balance sheet (including pension liabilities) Due diligence and finalisation of business plan and projections, led by the Bookrunner(s), required to assess: Attractions of equity story Capital structure Liquidity Review of historical financials by counsels in order to: Assess financial performance Identify business trends Establish key issues MD&A utilised in prospectus and analyst presentation Management Due Diligence 1 to 2 days of management presentations by the Company s senior management and by managers of each business unit to the underwriters and both sets of legal counsel that cover: Business overview and strategy Detailed operational review Key business drivers Business plan for the Company going forward Market overview and competitive environment Financial analysis Relevant issues Additional presentations from risk management, legal, IT and HR departments Management presentations are a prerequisite for efficient drafting of the prospectus Bring-down due diligence calls upon publication of the prospectus, pricing and closing Legal Due Diligence Legal / tax due diligence will be conducted by issuers and underwriters counsel and will include at least a review of material contracts / litigation, auditors management letters, material tax documentation and minutes of management board and supervisory board meetings Primarily conducted in the Data Room: Document request list agreed between both sets of counsel Created at the start of the IPO process Contents of the data room will evolve over the course of the transaction Covers both international and local legal diligence requirements Legal due diligence drives ability of counsels to deliver 10b-5 Disclosure Letters Senior Management Involvement Minimal Management Involvement 38

39 Prospectus Drafting and Contents The prospectus is the key marketing and disclosure document the legal and selling document available to all potential international investors The prospectus is produced by the Company s Counsel with significant input from the Company, the underwriters and underwriters counsel Issuer s counsel and the Sponsor / Bookrunner(s) will lead the drafting of the document The prospectus will be the core document for marketing the IPO: Describes the terms and conditions of the securities and the plan of distribution Describes the Company, its business, industry, regulation, risks, directors and management, shareholder structure, financial statements and analysis, material contracts, and recent developments and outlook The offer document from which key selling messages will derive Fair and accurate depiction (full disclosure of risks, no material omissions) Often used as a resource of information also after listing Minimum required information is governed by EU prospectus directive requirements, disclosure customary in a Rule 144A offering and international best practice The Company will ultimately be fully responsible for the contents of these documents and has to be closely involved in the drafting process International Prospectus Table of Contents Illustrative Part 1 Part 2 Part 3 Part 4 Part 5 Part 6 Part 7 Part 8A Part 8B Part 9 Part 10A Part 10B Part 11 Part 12 Part 13 SUMMARY RISK FACTORS OFFER HIGHLIGHTS SECTOR OVERVIEW THE BUSINESS SECTOR REGULATORY ENVIRONMENT DIRECTORS, SENIOR MANAGEMENT AND CORPORATE GOVERNANCE SELECTED FINANCIAL INFORMATION OPERATING AND FINANCIAL REVIEW RELATED PARTY TRANSACTIONS FINANCIAL INFORMATION ON THE COMPANY CAPITALISATION TABLE THE OFFER ADDITIONAL INFORMATION DEFINITIONS AND GLOSSARY 39

40 Analyst Presentation and Syndicate Research Overview of the Analyst Presentation: Management presentation to research analysts in the syndicate Typically lasts half a day (minimum) to a full day High level of detail provided (disclosure must be in line with prospectus) The first non-private event in most IPOs Used by the analysts as input for their written research reports In order to be able to hold this presentation effectively, all due diligence must be substantially completed, the equity story must be finalised and the prospectus should also be substantially completed Presentation produced by the bookrunner together with the Company Recommend that one or two rehearsal and Q&A sessions are held prior to the actual presentation to analysts In most cases, this initial analyst meeting will be complemented, a few days later, by follow-up Questions & Answers conference call(s) with the Analysts to clarify any outstanding issues Preparation to start around 4-6 weeks before meeting date Drafting of the Presentation takes place in conjunction with Prospectus drafting and disclosure must be in line with the Prospectus Presentation to Syndicate Research Analysts Syndicate Research Production: The research report is produced by research analysts independently, written using data from the Analyst Presentation Note: research analysts are independent and accountable to their institutional investor clients, not to the Company or the investment bankers Typically reports are prepared and published 3-4 weeks post-analyst Presentation Draft submitted for review of factual accuracy and consistency by the Company, counsels and bookrunner(s) Distribution of research and certain aspects of content are subject to research guidelines (i.e. no recommendation, no price target or valuation, duration of forecasts, black-out period, no distribution in the US) 40

41 Refining Valuation through the IPO Process Investment Banking Valuation Research Valuation Market Valuation P 12 weeks P - 10 weeks P - 4 weeks P - 2 weeks P Company Drivers Preliminary valuation assessment, driven by investment banking / advisers Management projections Due diligence Development of the equity story Analysts presentation Research publication Management roadshow and price range IPO Offer Price Market Drivers Equity/Macro Market Environment Review of IPO Pipeline Investor methodologies (depending on sector) e.g. P/E, EV/EBITDA, DCF Valuation price talk & investor feedback Views on valuation crystallise during the process investor soundings at various points in the process are key to minimise any surprises 41

42 Management Roadshow The culmination of the marketing process is the two-week Management roadshow. The roadshow is a key marketing tool for the IPO, allowing management to meet with investors in key investor hubs (e.g. in the UK, in continental Europe and in the US) cements confidence and comfort level of investors with investment case At start of roadshow: Price range announced Preliminary prospectus (or pathfinder ) published Book of demand opened A concise management presentation is prepared by the bookrunner together with the Company and management is coached on delivering it compellingly - as such, thorough preparation is of paramount importance and external training often utilised Bookrunner will make all necessary arrangements (flights, hotels, transportation, venues and meetings) occasionally assisted by an external agency There are essentially three types of meetings: One-on-one meetings with usually one institution only at offices of institution. Given the limited time available to management, these are generally reserved for the highest quality investors that have shown greatest interest in the stock Group presentation normally in a neutral location (hotel, restaurant) at breakfast / lunchtimes Conference calls, video conferences, etc. Most meetings attended by salesman, banker and the management team Illustrative Roadshow Venues / Schedule The management roadshow is a gruelling experience where often 80+ meetings held need to keep the story fresh for every meeting! 42

43 Demand and Pricing Dynamics Illustrative Build Up of Demand Illustrative Demand at Price Demand (m shares) Offer size Demand (x Cove Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 Day 8 Day 9 Day 10 Day 11 0 Bottom of the range Optimum Pricing Price sensitivity once books close Top of the range Typically demand is slow to build in the early stages of the bookbuilding as investors digest their meetings with management, analyse the prospectus and syndicate research before they come to an investment decision Equally, many investors like to see some momentum in the book before placing orders as this gives comfort that the offering is proving popular Pricing of the offering needs to balance maximising proceeds with sufficiently attractive pricing for institutions to be under-allocated and shares to have the maximum chance of trading positively in the immediate aftermarket 43

44 Allocation Criteria and Finalising IPO Distribution Allocation Criteria Type Split Retail / Employees vs. Institutional Geographical split (e.g. balance between UK / US / RoE / Asia) For institutional investors, quality and type of investors (e.g. long-only vs. hedge funds) Timeliness of Order Early orders help to generate momentum Involvement in Marketing Process Participation in roadshow meetings (one-on-ones, group meetings) and in investor education Quality of feedback provided (institutions show that they have done the work) Commitment to Company Long-term holders of the shares limit stock flowback Ownership in the sector Potential buyers in the aftermarket Pricing Approach / Sensitivity Accounts prepared to pay higher price / without price limits Rationale of Orders Orders consistent with their normal unit size Quality Size of funds under management Understanding of the Company s business Holdings in comparable companies / domestic equities Allocation is critical in that it determines who the future shareholders of the Company will be the Sponsor / bookrunners will make a recommendation to the Company on this based on the make-up of the book and their assessment of the best long term shareholder base 44

45 Aftermarket: Stabilisation of the Stock Description Is Stabilisation Permitted? Process by which the stabilising manager (a bookrunner) enters the market for a limited period of time following the pricing of IPO, to stabilise or maintain the market price of the shares, by making purchases IPOs and secondary offerings typically not blocks / AEOs When the stock is at or below the offer price Over-allocation to investors Creating short position How Does it Work? Settled with borrowed stock Stock loan repaid through Purchases in the market Greenshoe Stabilisation Period Stabilisation period ends on the 30 th day after the offering closes 45

46 Aftermarket: Mechanics of the Greenshoe Description Call option which entitles the stabilisation manager to acquire up to an agreed number of additional securities (beyond the number of base shares in the offering) to cover the short position created by any over-allocation Provided by shareholders Exercisable within 30 calendar days post-offering Usually 10-15% of initial offering size Additional proceeds to the seller of the securities Standard feature of almost all international equity offerings Purpose Protect the new shareholders against any immediate and sudden fall in the share price post-offering not for market protection Action items Define size of over-allotment option Stock borrow availability and stock lending agreement Aftermarket Scenarios Price Rises Day 1 Day 2 Bookrunner can exercise the Greenshoe Price Falls Day 3 Day 4 Day 5 Day 6 Day 7 Day 8 Day 9 Day 10 Day 11 Day 12 Day 13 Day 14 Bookrunner can purchase in the market Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 Day 8 Day 9 Day 10 Day 11 Day 12 Day 13 Day 14 46

47 Appendix V Additional LSE Group Overview Materials 47

48 A Choice of Routes to Market to Cater for All Sizes, Strategies and Development Stages Market designation Not public Exchange regulated EU Regulated Official List & EU Regulated Funding requirement 1bn 150m 1m 500k 100k 50k Concept & seed stage Start - Up Early Stage Expansion Consolidation & further capital raising Strategic consideration Diversification of investors, M&A and International Expansion 48

49 Comparison of Different Routes to Market for Commercial Companies MAIN MARKET Description Premium Standard HGS AIM Domicile Any Any EEA incorporated Any Regulation EU Regulated Market & Listed EU Regulated Market & Listed Minimum free float 25% 25% Revenue criteria Admission Adviser Corporate governance Ongoing obligations Significant transactions Cancellation Indices 75% of business supported by historic financial information (3 years) Prospectus & Eligibility letter to UKLA under Listing Rules Listing Sponsor at admission & for transactions UK Corporate Governance Code Disclosure & Transparency Rules Class tests as per Listing Rules 75% shareholder approval FTSE UK Series, where eligible n/a Prospectus n/a Corporate Governance statement Disclosure & Transparency Rules n/a No shareholder approval required n/a EU Regulated Market 10% with a min value of 30m 20% CAGR in revenues over 3 year period Eligibility letter to Exchange under HGS rules & Prospectus to UKLA Key Adviser at admission & to seek advice for certain events Corporate Governance statement Disclosure & Transparency Rules Class tests as per HGS rulebook 75% shareholder approval, unless cancelling to transfer to Premium n/a AIM MTF Assessment of suitability n/a AIM Admission Document & Nomad declaration of suitability Nominated Adviser at all times Expected market practice & guidance from Nomad AIM Rules Class tests as per AIM rules 75% shareholder approval FTSE AIM Series, where eligible 49

50 Main Market Premium Listing of Commercial Companies Listing Rules Accounts Corporate Governance Key eligibility requirements Compliance with the Listing Principles (LR 7) Appointment of a sponsor 75% of the business to be supported by a historical financial information Control over the majority of the entity s assets Independent business as main activity Unqualified working capital statement Minimum 25% shares in public hands Minimum market capitalisation GBP 700,000 Free transferability of securities Eligible for electronic settlement 3 years of audited financial information* Latest accounts no more then 6 months old (Interims included if accounts more than 6 months old)* EU IFRS or equivalent UK Corporate Governance Periodic Reporting Listing Rules Disclosure and Transparency Rules Corporate governance Key continuing obligations Annual Financial Report (four months after the end financial period) Half yearly financial report Interim Management Statement Significant transactions (class tests) Pre-emption rights extended to existing shareholders Model code Inside information made public without delay List of insiders Major shareholder notification Directors Dealings Related party transactions UK Corporate governance comply or explain Statement in the annual report Sponsor To be retained at all time Prospectus Prospectus approved by the UKLA Admission & Disclosure Standards Compliance with the London Stock Exchange's Admission and Disclosure Standards *Does not apply to mineral or scientific research companies 50

51 Main Market Standard Listing of Shares and Depositary Receipts Listing Rules Accounts Key eligibility requirements Minimum 25% shares in public hands Minimum market capitalisation GBP 700,000 Free transferability of securities Eligible for electronic settlement 3 years of audited financial information (or such shorter period the company was in operation) Latest accounts no more than 18 months old (if audited interims included) or 16 months old (if undated interims included). If accounts are older than 9 months old interims must be included. EU IFRS or equivalent Corporate Governance Domestic corporate governance code applies Periodic Reporting Disclosure and Transparency Rules Corporate governance Key continuing obligations Annual Report (four months after the end financial period)* List of insiders Inside information made public without delay Domestic Corporate governance applied Statement in the annual report Prospectus Prospectus approved by the UKLA Admission & Disclosure Standards Compliance with the London Stock Exchange's Admission and Disclosure Standards * 6 months for DR issuers admitted on PSM 51

52 Main Market High Growth Segment: Admission & Ongoing Responsibilities Key eligibility requirements Rulebooks High Growth Segment Rulebook Admission & Disclosure Standards Prospectus Rules Eligibility criteria Admission documents Financial information Corporate governance Incorporated in an EEA state Free float: Min 10% shares in public hands at admission, with a value of 30m (majority of 30m to be raised at admission) Growth: 20% CAGR in revenue for historic 3 year period Appointment of Key Adviser Prospectus approved by UKLA/ home competent authority Eligibility letter confirm compliance with entry criteria prescribed in HGS rulebook As per Prospectus directive: 3 years (or shorter) of audited financial information, with latest accounts no more than 18 months old & interims to be included as appropriate EU IFRS or equivalent Statement on what corporate governance code has been adopted, to what extent, and explanation of any non-compliance Continuing obligations Ongoing requirements are those set out in the Disclosure & Transparency Rules, with additional requirements around significant transactions set out in the HGS Rulebook Periodic Reporting Event Driven reporting Corporate governance Annual Report (four months after the end financial period) Half yearly financial report Interim Management Statement Inside information made public without delay List of insiders Major shareholder notification Directors dealings notification Statement in the annual report on what corporate governance has been adopted, to what extent, and explanation of any non-compliance Adviser To consult with Key Adviser on specific events (e.g. notifiable transactions / cancellation) No obligation to retain Key Adviser at all times 52

53 AIM: Admission & Ongoing Responsibilities Key eligibility requirements Continuing obligations Rulebooks AIM Rules for Companies and Nominated Advisers Periodic reporting Audited Annual Report Half yearly financial report Eligibility criteria Admission documents Corporate governance No minimum track record requirement or free float criteria, but company must demonstrate appropriateness to join a public market Appointment of nominated adviser Pre-admission announcement at least 10 business days prior to admission AIM admission document Nomad declaration of appropriateness Adoption of corporate governance measures as appropriate for the business UK Corporate Governance Code / QCA Corporate Governance Code as best practice Disclosure requirements Corporate transactions Adviser Price sensitive information to be made public without delay Significant shareholder notification Directors dealings notification Company website with up-to-date regulatory information Class tests to assess transactions Notification of substantial transactions, related party transactions Shareholder approval for reverse takeovers, fundamental disposals & cancellation To retain a nominated adviser at all times, failure to do so may result in suspension in the company s shares 53

54 Access to the FTSE Indices FTSE UK series is one of the world s most widely tracked family of indices FTSE UK Series is the only flagship index series of any major exchange to admit international companies Premium Listing on the London Stock Exchange enables issuers to get access to tracker funds Passive and active funds in London FTSE UK Index Series 100% 80% FTSE All share Index FTSE All-small Index 60% 40% FTSE All Sector Index FTSE Small Cap Index 20% FTSE 100 FTSE 250 FTSE 350 0% Active Passive Source: Investment Management Association s 10th Asset Management Survey 54

55 FTSE UK Index Series Decision Tree Yes Premium Listing on Main Market of the London Stock Exchange No Incorporation? Not eligible UK Overseas Potentially eligible (if free float>25%)* Incorporated in FTSE developed country? Yes No Yes Free float >50% at admission? No Yes Incorporated in low taxation jurisdiction as approved by FTSE?** No Adherence to principles of UK Takeover code Not eligible Not eligible Yes No Potentially eligible* Not eligible *Each company inclusion into FTSE UK Series is individually assessed by the FTSE practitioners committees. Eligibility is dependent on the company passing liquidity screening. The calculation of the minimum free float will be based on the ordinary share capital issued by the company and may include shares that would otherwise be excluded solely because they are subject to a lock-in clause of twelve months or less from their first day of trading, but that would in all other respects be considered part of a company s free float. **Examples of low taxation countries include: BVI, Bermuda, Cayman Islands, Guernsey, Isle of Man, Jersey, Marshall Islands. 55

56 Appendix VI LSE s Equity Primary Markets Team 56

57 LSE Equity Primary Markets Team Equity Primary Markets John Millar Global Head of Primary Markets Russia, CIS, Mongolia Asia India, Africa & Middle East UK Americas Italy & Continental Europe Jon Edwards Head of Russia, CIS, Asia Pacific Ibukun Adebayo Head of India, Middle East, Africa Marcus Stuttard Head of UK and AIM Alexander Lehmann Head of Americas Luca Peyrano Head of Italy & Continental Europe Tom Attenborough Head of UK Large Caps Mark Fahy Head of UK Small and Mid Caps Axel Kalinowski Continental Europe Business Development Lucy Tarleton Regional Director Chris Mayo Regional Director 57

58 LSE Equity Primary Markets Team (cont d) Global Head of Primary Markets John Millar +44 (0) Relationship Management Region Relationship Manager Telephone UK Marcus Stuttard Tom Attenborough Lucy Tarleton Mark Fahy Chris Mayo mstuttard@lseg.com tattenborough@lseg.com ltarleton@lseg.com mfahy@lseg.com cmayo@lseg.com Russia, CIS, Asia Pacific Jon Edwards (London) Ayuna Nechaeva (London) Julia Wang (Beijing) Yi Xie (HK) jedwards@lseg.com anechaeva@lseg.com jwang@lseg.com yxie@lseg.com India, Middle East, Africa Ibukun Adebayo iadebayo@lseg.com Americas Alexander Lehmann (New York) alehmann@lseg.com Continental Europe Product management and development Luca Peyrano (Milan) Axel Kalinowski Market Product Manager Telephone Main Market, AIM, PSM, SFM, ELITE and ATT Only Joanne Dutton Darko Hajdukovic Umerah Akram Marcello Sathya Cassanelli Luca Broglio Jonathan Sharpe Emma Titmus David Smith lpeyrano@lseg.com akalinowski@lseg.com jdutton@lseg.com dhajdukovic@lseg.com uakram@lseg.com mcassanelli@lseg.com lbroglio@lseg.com jsharpe@lseg.com etitmus@lseg.com d.smith@lseg.com For further information refer to 58

59 Legal Disclaimer This document has been compiled by the London Stock Exchange plc (the Exchange ). The Exchange has attempted to ensure that the information in this document is accurate, however the information is provided AS IS and on an AS AVAILABLE basis and may not be accurate or up to date. The Exchange does not guarantee the accuracy, timeliness, completeness, performance or fitness for a particular purpose of the document or any of the information in it. The Exchange is not responsible for any third party content which is set out in this document. No responsibility is accepted by or on behalf of the Exchange for any errors, omissions, or inaccurate information in the document. No action should be taken or omitted to be taken in reliance upon information in this document. The Exchange accepts no liability for the results of any action taken on the basis of the information in this document. All implied warranties, including but not limited to the implied warranties of satisfactory quality, fitness for a particular purpose, non-infringement, compatibility, security and accuracy are excluded by the Exchange to the extent that they may be excluded as a matter of law. Further, the Exchange does not warrant that the document is error free or that any defects will be corrected. To the extent permitted by applicable law, the Exchange expressly disclaims all liability howsoever arising whether in contract, tort (or deceit) or otherwise (including, but not limited to, liability for any negligent act or omissions) to any person in respect of any claims or losses of any nature, arising directly or indirectly from: (i) anything done or the consequences of anything done or omitted to be done wholly or partly in reliance upon the whole or any part of the contents of this document, and (ii) the use of any data or materials in this document. Information in this document is not offered as advice on any particular matter and must not be treated as a substitute for specific advice. In particular information in the document does not constitute professional, financial or investment advice and must not be used as a basis for making investment decisions and is in no way intended, directly or indirectly, as an attempt to market or sell any type of financial instrument. Advice from a suitably qualified professional should always be sought in relation to any particular matter or circumstances. The contents of this document do not constitute an invitation to invest in shares of the Exchange, or constitute or form a part of any offer for the sale or subscription of, or any invitation to offer to buy or subscribe for, any securities or other financial instruments, nor should it or any part of it form the basis of, or be relied upon in any connection with any contract or commitment whatsoever. London Stock Exchange and the London Stock Exchange coat of arms device are registered trade marks of London Stock Exchange plc. Other logos, organisations and company names referred to may be the trade marks of their respective owners. October 2014 London Stock Exchange plc 10 Paternoster Square London EC4M 7LS Telephone +44 (0)

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61 23 rd October 2014 Introduction to Cenkos Delivering Growth Capital on AIM Think Big, AIM High: U.S. Companies Accessing Growth Capital Through London's AIM Market

62 Cenkos Team Max Hartley Corporate Finance Growth Companies CORPORATE FINANCE Max Hartley joined Cenkos in July 2006, Recent IPO deals include the AA, ClearStar, FairFX and Rightster He is a Qualified Executive in the eyes of the London Stock Exchange. He has 9 years experience in corporate finance, including IPO s, M&A and capital markets transactions. Andy Roberts Equity Sales Growth Companies INSTITUTIONAL EQUITIES Partner in the six man Growth Companies sales team Founding member of Cenkos Growth Company team 2006 Over 12 years sales experience Over 40 Tech. transactions Previously at Evolution Securities Jason Holden Technology Analyst Growth Companies INSTITUTIONAL RESEARCH 20+ years institutional research experience Previously Extel#1 rated Previously at NatWest Markets, Deutsche Bank, DKW, Bank of America, and Edison Research Pan-European to Growth Company technology coverage. Understanding of industry trends and a global perspective gives credibility with investors Growth Company Corporate Finance +10 Professionals Growth Company Sales Largest Sales Team in Growth Sector Research Team +2 Professionals covering Software, Services & IT Hardware 62

63 Cenkos Securities plc Independent UK, specialist institutional securities firm - AIM listed, established in April c. 115 employees based in London and Edinburgh - Focused on UK small and mid-cap companies. Partnership based model - Significant owners of the business - Interests of staff and clients fully aligned - Performance driven culture - Entrepreneurial approach Focus on clients and their needs - Corporate client focus unique approach - Low client to staff ratio - High service level Clear differential from peer group - Stability 15 years is the average length of time each Growth Company team member - Strong balance sheet Cenkos has been profitable every year since inception - Team structure Fully integrated Growth Companies Team (GCT): - Sales - Research - Corporate Finance Source: 1 Ownership Structure information as at 15 th October Financial Statements information taken from the unaudited final results for the 6 month period ended 30 June 2014 Ownership Structure Invesco 15% Hargreave Hale 12% JP Morgan 7% Employees / Others Over 60% Interim Financial Results Revenue 65.2m PBT 23.5m Cash 43.2m EPS 31.2p Interim Dividend 7.0p 63

64 What are we good at? Enabling management teams to achieve their corporate objectives - Creating supportive, broad institutional shareholder lists - Achieving attractive valuations that enable corporate activity - Executing corporate transactions to fund growth - Cenkos have never failed in an attempt to execute an IPO/ secondary fundraise - c.50% of Cenkos clients have undertaken corporate activity in past 18 months - FY14 YTD raised 1.9 billion - Aftermarket focus Building relationships with corporate clients - 1st ranked NOMAD and broker by number of FTSE AIM UK 100 clients - 2nd ranked NOMAD and broker by number of AIM clients - Long standing professional and personal relationships (Personal Group, Prezzo, E1) Access to institutional clients - Significant Growth Company sales experience with strong relationships with over 200 institutions - Cenkos have raised over 8 billion since inception FY13 Track Record No. of corporate transactions 48 Total funds raised 1.2bn Total deal value 2.1bn Deal size 2m to 210m Average fundraising size 28m FY12 Track Record No. of corporate transactions 50 Total funds raised 711m Total deal value 1.4bn Deal size 2m to 350m Average fundraising size 17m 64

65 Cenkos IPO track record No. 1 NOMAD and Broker for AIM IPOs (2012 Baker Tilly Market Report) - IPOs executed by Cenkos in 2012 & 2013 are up on average 38% from first day of dealings - Largest number of AIM IPOs executed by any financial advisor 2012 and Track record of executing IPOs in both good and bad investor markets - 100% IPO success rate Selected IPOs International animal health, and sustainability science Mkt Cap on IPO: New Money Raised: Old Money Raised: 87.3m 27.5m 17.6m Funds Raised Market Cap Sector Transaction Year Funds Raised Market Cap Sector Transaction Year $15m $38m Technology m 83m Technology m 17.3m Technology m 322.8m IPO m 79m Healthcare m 193m Technology ,385.0m 1,718.8m IPO m 112.3m Healthcare 2013 Timetable Aug 13 Oct 13 Early Nov 13 Late Nov 13 marketing Dec 13 oversubscribed Appointed Soft marketing Funds raised Formal IPO 45 Days Trading 98% premium to IPO price Funds Raised 13.6m Market Cap 46.7m Sector Technology Transaction Year m 65m Technology m 22.1m Technology m 31.9m Leisure

66 Case Study: ClearStar About the Company Since 1995, ClearStar has been a leader in the human capital management profession with a full suite of background and drug screening solutions providing critical data on applicants across many industries and businesses around the globe. Institutions who participated in the IPO The AIM IPO When? July 2014 Institutions % River & Mercantile Asset Management LLP 9.9 How much raised? Time taken? $15m and over subscribed Process from start to finish 4 months Level of demand? Oversubscribed Standard Life Investments Ltd. 8.2 Hargreave Hale Ltd. 6.4 Ennismore Fund Management Ltd. Artemis Investment Management LLP J. M. Finn & Co. Ltd. 1.3 Cenkos unique approach Cornerstone to de risk the transaction 6 institutional Cornerstone meetings WHI Stockbrokers Ltd. Goldman Sachs & Co All Cornerstones subscribed in IPO High quality investment research Hargreaves Lansdown Stockbrokers Ltd

67 Example Small Cap Roadshow Monday 4.45 pm Cenkos Sales Team Tuesday Am Financial PR Analysts meeting pm Kestrel Partners LLP Stuart Rollason 1.30 pm Threadneedle AM James Thorne 3.00 pm Impax Asset Mgmt Jon Forster Wednesday 8.30 am Old Mutual AM Luke Kerr am Insight Investments Matt Cooke am Ignis Asset Mgmt David Clark 1.00 pm Tavistock Comm s PCB Lunch 2.30 pm AXA Framlington Chris St John 4.00 pm Brewin Dolphin Simon Oliver Monday 8.15 am Miton Group Gervais Williams am Cavendish Paul Mumford am Henderson Volantis Adam McConkey 1.15 pm Investec Asset Mgmt Philip Rodrigs 2.30 pm ISIS EP LLP Sam Plumptre Tuesday am National Farmers Union Robert Platts am Cazenove Fund Mgrs John Warren 1.00 pm AD Securities Megan Ray 2.30 pm M&G Investments Louise Nash 4.00 pm Credo Capital Jarrod Cahn Thursday 8.30 am F&C Asset Mgmt Catherine Stanley am Aerion Fund Mgmt John Etchells am Cornhill Capital Nick Josh 1.15 pm Equity Development Investor Webinar 2.30 pm Newlands Capital David Newlands 4.00 pm Crystal Amber Adv Juan Morera Friday 8.30 am Hargreave Hale David Walton 2.30 pm Four Capital Partners Tom Carroll 4.00 pm Fidelity Thomas Sinclair 67

68 Cenkos pre-ipo track record in the USA Advanced Plasma Therapies About: Advanced Plasma Therapies, Inc. commercialises a technology that is incorporated in medical devices to produce and deliver nitric oxide, a biologic agent, through a stream of arc-generated warm plasma. Its technology has applications in treating pain and inflammation, wounds, ulcers, and infections of skin and soft tissues. The company s technology-based devices are in use in overseas markets. Advanced Plasma Therapies, Inc. was incorporated in 2010 and is headquartered in Lawrenceville, New Jersey. Raise: When? September 2014 Amount? $27 million Institutional buy in? Institutional fundraise Strong platform for an IPO 68

69 Recent Cenkos Growth Companies Transactions Deal Value Market Cap* Transaction Type Transaction Date $15m 20.5m IPO Jul m 11.5m IPO Jul 14 23m 77.9m IPO Jul m 39.6m IPO Aug 14 25m 39.6m Pre-IPO Sept m 59.0m Placing Sept 14 45m 39.8m Acq Oct 14 15m 180.9m Placing Oct 14 Deal Value Market Cap* Transaction Type Transaction Date 42m 100.4m Placing Jul 14 1,385.0m 1,718.8m IPO Jun m 620.8m Placing Jun m 71.5m Placing Jun 14 10m 17.3m IPO Apr m 152.5m Placing Apr m 83m IPO Mar m 159.8m IPO Feb 14 Deal Value Market Cap* Transaction Type Transaction Date 11.5m 65m Placing Jan m - Placing Jan m - Takeover offer Jan m 322.8m IPO Jan m 21.1m Placing Dec m 59.0m Placing Dec 13 5m 68.5m Placing Feb m 12.3m IPO Dec 13 Deal Value Market Cap* Transaction Type Transaction Date 15.7m 83.2m Placing Dec m 200.4m Placing Dec m 100.4m IPO Nov m 50.9m Placing Nov m 592.3m Placing Nov m 3.1m Placing & Acqn Nov m 31.9m IPO Nov m 55.3 Placing Oct 13 Deal Value Market Cap* Transaction Type Transaction Date 2.7m 31.8m Placing Oct m 104.0m Placing Oct m 11.6m Reverse Tkvr Sept m - Takeover Offer Sept m 180.9m Placing Sept m 16.9m IPO Aug m 59.0m Reverse Tkvr Jul m 3.5m Subscriptio n Jul 13 Deal Value Market Cap* Transaction Type Transaction Date 1.6m 4.4m Placing Jul 13 * All market capitalisations as at 17 October m 60.4m Placing Jul m 73.1m Placing Jul m - Placing Jul m - Placing Jun m 24.4m Placing Jun m m Placing Jun m 11.2m Demerger Jun 13 69

70 Cenkos Technology Research 70

71 Specialist technology research Internet of things - Dedicated technology equity research team with three members covering Software, Services & Hardware: Andy Bryant (ex BZW, NatWest, Morgan Stanley, Edison), Jason Holden (Deutsche, Hd of Telco Bank of America), Martin O Sullivan (Philips Semiconductors) - Average of 20 years of equity research experience, previously No.1 ranked in Extel - Coverage of pan-european large cap players (combined Mkt. Cap. c. 100bn), as well as small cap, allows understanding of broader industry trends on a global scale and gives credibility with investors - Regular dialogue with institutional investors across large, mid and small cap tech - Coverage of all Cenkos small cap technology universe totalling 18 clients and involved in fundraisings of c 400 million in last 12 months including three successful IPOs - One of the leading technology teams on AIM in terms of number of brokerships Software & Services Coverage Hardware Coverage 71

72 Ticking the boxes for the UK investor UK investors are looking for Leading validated technology Technology Sector vs FTSE All share Growing blue-chip client base Proven, experienced management Market growth ROI for customers Multi-dimensional high growth revenue opportunity Increasing recurring revenues Source: FactSet Cash generative Opportunity to globalise 72

73 What does a typical AIM Technology IPO look like? Proven technology and business model Illustrative software revenue model Entrepreneur/owner managed Outside/venture/private equity investors Typically $10m+ of revenue Profits/cash a plus but not a requirement Existing, leveragable customers Valuation $50m+ Sometimes appetite for pre revenue business with done it before management Source: Cenkos Securities 73

74 Valuations on AIM The model IPO UK investors increasingly catching up US investors in terms of technology understanding and valuation. Benefit of scarcity value. eg On the LSE less than 5 semiconductor companies, 2 datacentre companies, 1 social network Recent explosion in listing of cloud software companies Hardware has more risk/reward FTSE Technology vs Nasdaq AIM recurring revenue software businesses Company Mkt Cap 2015 P/E 2015 EV/Sales Allocate Bond Brady Eckoh Escher First Derivatives Gresham Ideagen Incadea KBC Microgen Netcall StatPro Average Source: Cenkos Securities estimates Source: Company 74

75 The medium term Q2 15 list at pre-money $50m raising $25m The 3 year plan 3 years of new customer wins, growing profits etc Increasing investor confidence = higher valuation Cenkos helping you raise $50m for expansionary acquisitions! Source: Company 75

76 The Cenkos Broking Model Post Float 76

77 CASE STUDY 1 Transformational broking Regenersis (RGS/Mkt cap: 155.9m) Regenersis provides services that improve the consumer or user experience after the initial purchase of a device. It helps the likes of HTC, Nokia, Samsung, Orange, Virgin Media, Toshiba and others deliver the best possible after market service to its customers. Provision of technical call centres or managing returns and repairs. Strong growth expected in emerging markets. Global presence across Europe, USA, South America, Africa and Asia. Cenkos appointed in October 2013 share price increase of 75% since appointment. Annual results announced. Revenue up 13%, operating profit up 24% Acquired largest set top box repair business in South Africa Cenkos appointed as joint broker Shareholder % M&G Investment Management Limited 12.8 Hanover Investors Management 6.3 Impax Asset Management 5.0 NFU Mutual Investment Services 3.9 Hargreave Hale Ltd 3.2 Henderson Global Investors Ltd 3.1 Investec Asset Management Ltd 3.1 FIL Investments International 2.6 Aviva Investors Global Services 2.5 Schroder Investment Management Ltd 2.2 Announce placing to raise 100m Impax increase holding to over 5% Hargreave Hale increase shareholding to 5.1% Henderson increase shareholding to 6.5% NFU increase stake to over 3% 1-Oct-12 1-Jan-13 1-Apr-13 1-Jul-13 1-Oct-13 1-Jan-14 1-Apr-14 1-Jul-14 Hanover increase holding to over 6% 77

78 CASE STUDY 2 M&A transactional support Restore plc (RST.L/Mkt cap: 187.9m) Office support services focussed on data management Shares trade on 14x FY14 P/E and an EV/EBITDA of 9.9x. Sales message is based around 30%+ EPS growth, acquisitions and strong cash generation A buy and build investment story requires a strong valuation multiple and access to capital through a wide institutional shareholder base. Cenkos has helped create a blue chip institutional investor base capable of supporting the company now and in the future. Shareholder % Hargreave Hale & Co 17.0 BlackRock Investment Management 10.1 Octopus Investments Limited 7.0 M&G Investment Management 6.3 Investec Asset Management 5.6 River and Mercantile Asset Management 5.4 Slater Investments Limited 5.2 Old Mutual 4.6 Schroder Investment Management 4.5 Franklin Templeton Acquisition: Thoroughshred Acquisition: M&L Document Acquistion: Archive Solutions Placing: 7.0m raise Acquisition: IT Efficient Ltd Acquisition: Paterson Data Acquisition: Brunswick Document Placing: 6.3m raise Acquisition: Harrow Green Placing: 3.0m raise Acquisition: Atix Ltd. Placing (old): 42.7m raise Acquisition: Magnum Secure Limited- Replacement Slater Investments Limited increase to over 5%, Hargreave Hale to over 17%, BlackRock 10% 3-Oct-11 2-Jan-12 2-Apr-12 2-Jul-12 1-Oct-12 1-Jan-13 1-Apr-13 1-Jul-13 1-Oct-13 1-Jan-14 1-Apr-14 1-Jul-14 78

79 6 CASE STUDY 3 Transactional support Personal Group (PGH.L/Mkt cap: 150.7m) Personal Group Holdings Plc engages in the business of providing short term accident and health insurance, employee benefits related business and financial services in the United Kingdom. Consistently paid dividends over the last 24 months Cenkos helped to strengthen the board Cenkos helped to strengthen the institutional shareholders Personal Group Holdings Plc Shareholder % Johnston Christopher W T 41.7 Delta Lloyd Asset Management NV 12.1 Investec Wealth & Investment Ltd. 5.9 Seneca Investment Managers 5.0 Miton Asset Management Ltd. 5.0 Hargreave Hale Ltd. 4.1 Royal London Asset Management Ltd. 3.7 Killik 2.0 Fennell Ann Theresa 1.2 Kennard T 1.1 Close Asset Management Buyer: Personal Group Holdings PlcTarget: Lets Connect IT Solutions Ltd.Deal Size: $20.1 mil EPS: 0.25Year Ending: 12/2011 EPS: 0.07Year Ending: 12/ EPS: 0.20Year Ending: 12/2012 Investec Wealth & Investment Limited increase stake to over 5% 3-Oct-11 2-Jan-12 2-Apr-12 2-Jul-12 1-Oct-12 1-Jan-13 1-Apr-13 1-Jul-13 1-Oct-13 1-Jan-14 1-Apr-14 1-Jul-14 79

80 Cenkos Growth Company Client List Clean Energy ( m) Empyrean Energy PLC 29.0 Leaf Clean Energy Company 49.6 Nature Group PLC 14.9 Renewable Energy Generation Ltd* 69.7 Consumer/Leisure Everyman Media Group 31.9 FairFX plx 39.6 Finsbury Food Group plc 39.8 Gaming Realms Plc 56.7 Gusbourne Plc 10.9 International Greetings plc 41.7 Paragon Entertainment Limited 3.5 Prezzo PLC Richoux Group plc 14.2 Tasty plc 55.3 Financial Services BCB Holdings Limited 12.5 London Cap. Group Holdings plc 15.6 Share Plc 4.11 Personal Group Holdings Plc Shellshock Limited 6.0 NBNK Investments Plc 20.7 Healthcare Abzena plc 77.9 Angle plc Benchmark Holdings Plc 67.4 Proteome Sciences plc 11.7 Provexis plc 11.7 Imperial Innovations ReNeuron Group plc 60.3 Scancell Holdings Plc 73.1 Science in Sport plc 16.8 Investment ( m) Kennedy Ventures plc 2.1 Masawara plc 65.2 Juridica Investments Limited Manufacturing/Engineering Corac Group plc 21.1 Eleco Plc 14.8 Michelmersh Brick Holdings PLC 50.9 Optare Plc 2.9 Plastics Capital plc 31.8 Skil Ports & Logistics Limited 19.5 Breedon Aggregates Limited Media/Marketing Cello Group plc 71.2 Communisis plc Dods (Group) plc 22.0 Entertainment One Ltd Jaywing plc 21.6 XLMedia 83.0 Real Estate Summit Germany Limited Support Services Redde PLC AA Public Limited Company 1,718.8 Impellam Group plc Plexus Holdings Prime People Plc 10.7 Restore plc Stobart Group Limited Software and Computer Services ( m) KBC Advanced Technologies plc 70.7 Bond International Software plc 35.0 Brady plc 49.5 CSF Group PLC 2.0 Forbidden Technologies plc 24.4 IBEX Global Solutions Plc 46.7 incadea PLC 65.0 Quindell Plc 576 StatPro Group plc 48.6 Vianet Group plc 22.7 Technology Avanti Comm. Group plc Bango plc 41.5 CAP-XX Limited 4.3 ClearStar Inc CML Microsystems Plc 47.7 Concurrent Technologies Plc 31.2 Enables IT Group Plc 20.7 Flowgroup plc 3.1 Regenersis plc 14.9 Rightster Group Plc 83.2 RM2 International SA 24.4 Rosslyn Technologies plc Zamano Plc 10.9 Utilities Fulcrum Utility Services Limited 12.7 OPG Power Ventures Plc Smart Metering Systems PLC Position as at 16 October

81 Appendix: Comprehensive Offering Investor Relations Targeted Research 81

82 Comprehensive offering corporate finance and broking Communication with the stock market should be led by your broker / NOMAD. The Cenkos Corporate Broking Service offers not just regulatory advice but also a pro active approach to communication and messaging Corporate Finance Fundraising Strategic advice Regulatory advice Takeover advice Transaction advice and execution Private equity and debt fundraising IPO and secondary fundraising Pre-IPO funding advice Restructuring/ reorganisation/ disposal strategy Effective financing structures Board composition and committees Pre-fund raising advice Experienced Sponsor/NOMAD Application of Listing Rules and AIM Rules Advice on disclosure requirements Monitoring of continued regulatory obligations Advice on applying the Takeover Code Bid defence and/or Rule 3 (Independent) advice Take Privates and use of Private Equity Co-ordination and leadership of transactions Acquisition and disposal analysis and advice Public recommendations and opinions (e.g. fairness opinions, de-listings) Corporate Broking Equity story Investor relations strategy Communication to the Market Communication from the Market Strategic advice In-depth understanding of the equity story Knowledge of valuation drivers and investment case Proximity to current investor attitudes and trading activity (exit price / buy in price) One size does not fit all Define a bespoke investor relations programme Maximise the impact of management time Input into market communication Regular road show and investor meetings Coordinated approach between Corporate Finance, Research and Sales Daily market s and weekly contact Sector, market and macro news and developments Investor feedback and shareholder register movements Prompt a regular forum for strategic debate Consider optimal capital structure Provide the equity market s perspective on corporate strategy 82

83 Investor relations tailored products throughout the financial year Daily Proactive Alerts Share Price movements, orders and volumes traded Market/sector news flow Key buyers and sellers Periodic Institutional meetings Weekly Broking Reports Share price performance benchmarked against peer group Key sector news flow Analysis of traded volume Investor targeting Post results and ad hoc road shows Institutional investor lunches Site visits Sector conferences / Company teach in Detailed investor feedback following meetings Monthly Broking Reports Key sector news flow Peer group benchmarking Market perceptions Market and stock specific events Strategic reviews / benchmarking Investment case and market perceptions IR strategy review and planning Financial and operational metrics Capital structure Dividend policy M&A opportunities / market view Quarterly Share Analysis Share register analysis Detailed trading/ beneficial order analysis Section 793 analysis Section 808 maintenance Report ECM Trends and Developments...in addition to day to day technical and regulatory advice Detailed planning and advice on preparation ahead of all major news flow and investor presentations Routine announcements: TR1s, director dealings, block listing interim reviews, AGM notices Facilitation of director and employee share dealings Buy backs by the company Ad hoc. Regulatory advice: Listing / AIM Rules, LSE, Takeover Panel 83

84 Targeted Research Enhances Message Delivery Cenkos research team - Comprises around 20 analysts - Research is separated into independent unites including Growth Companies, Large Cap, Investment Trusts, Special Situations and Resources - Five analysts work exclusively for the Growth Companies team Correspondence Flash Notes Role of Growth Companies research - Promote our corporate clients - Provide up to date estimates for the market - Keep the market informed of all developments and newsflow Publications sent to c.200 institutions and private client brokers - Corporate results - Company and sector news flow - Investor roadshows - Fund raisings Cenkos works alongside a number of research houses - Research increases profile and reinforces key messages - Edison Research In-Depth/ Initiation Notes On Demand Research 84

85 Disclaimer This marketing communication has been produced by Cenkos Securities Plc ( Cenkos ) which is authorised and regulated by the Financial Conduct Authority ( the FCA ). This document is not independent and should not be relied on as an impartial or objective assessment of its subject matter. It is not investment research and it has not therefore been prepared in accordance with legal requirements designed to promote the independence of investment research. In particular, Cenkos is not prohibited from dealing ahead of the distribution of this document, as it would have been were it independent investment research. Please visit to see our conflicts management policy and additional relevant information. Nothing in this document constitutes, or is to be construed as, an offer or a solicitation of an offer to buy or sell investments. The information and opinions constitute a judgment as at the date of this document and are subject to change without notice. Whilst the information in this document is based on sources believed to be reliable, Cenkos has not independently verified the contents of this document and makes no representation or warranty that it is wholly accurate or complete. Cenkos accepts no responsibility or liability for any losses arising from this document. This document is being supplied to you solely for your information and may not be reproduced by, or further distributed to, any other person without our specific consent. No other person may rely or act upon it. We are not advising you on the merits of the investments discussed in this document and the document is not based on a consideration of your circumstances. We have not assessed the suitability of any investments for you. You should base any investment decisions on your own financial objectives and you should seek independent investment, tax and legal advice as you consider appropriate. Past performance is not necessarily a guide to future performance. An investor may not get back the amount originally invested. Cenkos may, from time to time, undertake transactions (as principal or agent) in securities the subject of this report, and have or may have a position or holding in such securities, or a related investment, as a result of such activities. In addition, Cenkos may, from to time, provide or have provided services to the company the subject matter of this document. 85

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87 AIM how to bring a company to market October 2014

88 Wragge Lawrence Graham & Co and AIM Acted on first AIM IPO No. 1 law firm on AIM by market capitalisation c.450 AIM transactions to date raising over US$11bn 6 th most active law firm (IPOs) since 2008

89 Eligibility Domicile Free float Track record (inc. financials) Working capital Electronic settlement

90 Timetable Week Housekeeping Test marketing Appoint advisers Due diligence Restructuring Presentation Admission document Placing agreement Verification Marketing Book build Admission

91 Advisers Nominated Adviser (Nomad) Broker Company s legal advisers Solicitors to the Nomad and Broker Reporting Accountants Financial PR Registrars Others (e.g. valuer, technical expert) 91

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