Admission Document. Nominated Advisor & Broker

Transcription

1 Admission Document Nominated Advisor & Broker

2 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document, you shoud consut your stockbroker, bank manager, soicitor, accountant or other independent professiona adviser who speciaises in advising on the acquisition of shares and other securities and is duy authorised under the Financia Services and Markets Act 2000 (as amended) ( FSMA ). This document does not constitute an offer to issue or se, or the soicitation of any offer to subscribe for or buy, any of the Ordinary Shares in any jurisdiction where it may be unawfu to make such offer or soicitation. The distribution of this document in certain jurisdictions may be restricted by aw and therefore persons into whose possession this document comes shoud inform themseves about and observe such restrictions. Any such distribution coud resut in a vioation of the aws of such jurisdictions. In particuar, this document is not for distribution into the United States, Canada, Austraia, Japan, the Repubic of Ireand or the Repubic of South Africa and is not for distribution directy or indirecty to any US person. The Ordinary Shares have not been and wi not be registered under the US Securities Act of 1933, as amended (the US Securities Act ), or under the securities egisation of, or with any securities reguatory authority of, any state or other jurisdiction of the United States or under the appicabe securities aws of any province or territory of Canada or under the securities aws of Austraia, Japan, the Repubic of Ireand or the Repubic of South Africa. This document, which is drawn up as an admission document in accordance with the AIM Rues, has been issued in connection with the appication for admission to trading on AIM of the entire issued and to be issued ordinary share capita of the Company, comprising the ordinary shares in issue as at the date of this document ( Existing Ordinary Shares ), the new ordinary shares to be issued in connection with the initia consideration for the Acquisition ( Initia Consideration Shares ) and the new ordinary shares to be issued pursuant to the Pacing Agreement ( Pacing Shares ) (together the Enarged Share Capita ). This document does not constitute an offer to the pubic requiring an approved prospectus under section 85 of FSMA and, accordingy, this document does not constitute a prospectus for the purposes of FSMA and the Prospectus Rues and has not been pre-approved by the Financia Conduct Authority ( FCA ) pursuant to section 85 of FSMA. It is expected that the admission of the Enarged Share Capita wi become effective, and deaings in the Ordinary Shares wi commence on 23 November The Ordinary Shares are not deat on any other recognised investment exchange and no appication has been or is being made for the Ordinary Shares to be admitted to any such exchange. AIM is a market designed primariy for emerging or smaer companies to which a higher investment risk tends to be attached than to arger or more estabished companies. AIM securities are not admitted to the Officia List of the UK Listing Authority. A prospective investor shoud be aware of the risks of investing in such companies and shoud make the decision to invest ony after carefu consideration and, if appropriate, consutation with an independent financia adviser. Each AIM company is required, pursuant to the AIM Rues for Companies pubished by London Stock Exchange pc ( AIM Rues ), to have a nominated adviser. The nominated adviser is required to make a decaration to London Stock Exchange pc on Admission in the form set out in Schedue Two to the AIM Rues for Nominated Advisers. London Stock Exchange pc has not itsef examined or approved the contents of this document. The Directors and the Proposed Directors, whose names appear on page 8 of this document, and the Company accept responsibiity, both individuay and coectivey, for the information contained in this document. To the best of the knowedge and beief of the Directors and the Proposed Directors and the Company (who have taken a reasonabe care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything ikey to affect the import of such document. Prospective investors shoud read the whoe text of this document and shoud be aware that an investment in the Company is specuative and invoves a significant degree of risk. Prospective investors shoud carefuy consider the section entited Risk Factors set out in Part 2 of this document. Be Heard Group pc (Incorporated and registered in Engand and Waes and registered with number ) Acquisition of Agenda 21 Digita Hoding Limited Pacing of 169,230,770 New Ordinary Shares at 3.25 pence per Ordinary Share Canceation of admission to the Standard Segment of the Officia List Appication for Admission to trading on AIM Nominated Adviser and Broker Numis Securities Limited Expected Ordinary Share Capita immediatey foowing Admission Number Issued and fuy paid Amount 332,930,800 ordinary shares of 1p each 3,329,308 The Pacing is conditiona, inter aia, on Admission taking pace by 8.00 a.m. on 23 November 2015 (or such ater date as the Company and Numis may agree, being not ater than 30 November 2015). The Initia Consideration Shares and Pacing Shares wi, when issued and aotted, rank in fu for a dividends or other distributions decared made or paid on the Ordinary Shares after the date of their aotment and issue and wi rank pari passu in a other respects with the Existing Ordinary Shares in issue at that time. Numis, which is authorised and reguated in the United Kingdom by the FCA, is acting as nominated adviser and broker to the Company in connection with the proposed Pacing and Admission and wi not be acting for any other person (incuding a recipient of this document) or otherwise be responsibe to any person for providing the protections afforded to cients of Numis or for advising any other person in respect of the proposed Pacing and Admission or any transaction, matter or arrangement referred to in this document. Its responsibiities as the Company s nominated adviser under the AIM Rues for Nominated Advisers are owed soey to London Stock Exchange pc and are not owed to the Company or to any Director or to any other person in respect of his decision to acquire shares in the Company in reiance on any part of this document. Apart from the responsibiities and iabiities, if any, which may be imposed on Numis by FSMA or the reguatory regime estabished thereunder, Numis does not accept any responsibiity whatsoever for the contents of this document, incuding its accuracy, competeness or verification or for any other statement made or purported to be made by it, or on its behaf, in connection with the Company, the Ordinary Shares or the Pacing and Admission. Numis accordingy discaims a and any iabiity whether arising in tort, contract or otherwise (save as referred to above) in respect of this document or any such statement.

3 IMPORTANT INFORMATION INVESTMENT RISK Investment in the Company carries risk. There can be no assurance that the Company s strategy wi be achieved and investment resuts may vary substantiay over time. Investment in the Company is not intended to be a compete investment programme for any investor. The price of Ordinary Shares and any income from Ordinary Shares can go down as we as up and investors may not reaise the vaue of their initia investment. Prospective Sharehoders shoud carefuy consider whether an investment in Ordinary Shares is suitabe for them in ight of their circumstances and financia resources and shoud be abe and wiing to withstand the oss of their entire investment (see Part 2: Risk Factors of this document). Potentia investors contempating an investment in Ordinary Shares shoud recognise that their market vaue can fuctuate and may not aways refect their underying vaue. Returns achieved are reiant upon the performance of the Enarged Group. No assurance is given, express or impied, that Sharehoders wi receive back the amount of their investment in Ordinary Shares. If you are in any doubt about the contents of this document you shoud consut your stockbroker or your financia or other professiona adviser. Investment in the Company is suitabe ony for financiay sophisticated individuas and institutiona investors who have taken appropriate professiona advice, who understand and are capabe of assuming the risks of an investment in the Company and who have sufficient resources to bear any osses which may resut therefrom. Potentia investors shoud not treat the contents of this document as advice reating to ega, taxation, investment or any other matters. Potentia investors shoud inform themseves as to: (a) the ega requirements within their own countries for the purchase, hoding, transfer, or other disposa of Ordinary Shares; (b) any foreign exchange restrictions appicabe to the purchase, hoding, transfer or other disposa of Ordinary Shares that they might encounter; and (c) the income and other tax consequences that may appy in their own countries as a resut of the purchase, hoding, transfer or other disposa of Ordinary Shares. Potentia investors must rey upon their own representatives, incuding their own ega advisers and accountants, as to ega, tax, investment or any other reated matters concerning the Company and an investment therein. Statements made in this document are based on the aws and practices currenty in force in Engand and Waes and are subject to changes therein. This document shoud be read in its entirety before making any investment in the Company. FORWARD-LOOKING STATEMENTS Certain statements contained herein are forward-ooking statements and are based on current expectations, estimates and projections about the potentia returns of the Company and industry and markets in which the Enarged Group operates, the Directors and Proposed Directors beiefs and assumptions made by the Director and Proposed Directors. Words such as expects, anticipates, may, shoud, wi, intends, pans, beieves, targets, seeks, estimates, aims, projects, pipeine and variations of such words and simiar expressions are intended to identify such forward-ooking statements and expectations. These statements are not guarantees of future performance or the abiity to identify and consummate investments and invove certain risks, uncertainties, outcomes of negotiations and due diigence and assumptions that are difficut to predict, quaify or quantify. Therefore, actua outcomes and resuts may differ materiay from what is expressed in such forward-ooking statements or expectations. Among the factors that coud cause actua resuts to differ materiay are: the genera economic cimate, competition, interest rate eves, oss of key personne, the resut of ega and commercia due diigence, the avaiabiity of financing on acceptabe terms and changes in the ega or reguatory environment. Such forward-ooking statements are based on numerous assumptions regarding the Company s present and future business strategies and the environment in which the Company wi operate in the future. These forward-ooking statements speak ony as of the date of this document. The Company expressy 2

4 discaims any obigation or undertaking to disseminate any updates or revisions to any forward-ooking statements contained herein to refect any change in the Company s expectations with regard thereto, any new information or any change in events, conditions or circumstances on which any such statements are based, uness required to do so by aw or any appropriate reguatory authority. PRESENTATION OF FINANCIAL INFORMATION AND OTHER DATA The Company and the Enarged Group pubish their financia statements in Pounds Stering. The Company has a year end of 31 December. The financia information presented in this document has been prepared for the Company (as set out in Part 3) and Agenda 21 Subco (as set out in Part 4). In accordance with the AIM Rues, the financia information in respect of the Company covers the period from 17 September 2014 to 30 June 2015 and the financia information in respect of Agenda 21 Subco covers the years ended 31 December 2012, 2013 and 2014 and the six month period to 30 June Agenda 21 Hodco has not carried out any economic activity since it was incorporated on 22 September 2015, other than entering into the share purchase agreement in respect of the Acquisition on 9 October Therefore, no historica financia information has been presented in this document in respect of Agenda 21 Hodco. The financia information contained in this document, incuding that financia information presented in a number of tabes in this document, has been rounded to the nearest whoe number or the nearest decima pace. Therefore, the actua arithmetic tota of the numbers in a coumn or row in a certain tabe may not conform exacty to the tota figure given for that coumn or row. In addition, certain percentages presented in the tabes in this document refect cacuations based upon the underying information prior to rounding, and, accordingy, may not conform exacty to the percentages that woud be derived if the reevant cacuations were based upon the rounded numbers. Certain non-ifrs measures such as operating profit before finance costs, taxation, depreciation, amortisation and exceptiona one-off transaction costs ( EBITDA ), have been incuded in the financia information, as the Directors beieve that these provide important aternative measures with which to assess the Enarged Group s performance. You shoud not consider EBITDA as aternatives for revenue or operating profit which are IFRS measures. Additionay, the Company s cacuation of EBITDA may be different from the cacuation used by other companies and therefore comparabiity may be imited. Certain economic, market and other historic information contained in this document has been obtained from pubished sources prepared by other parties. Certain of the estimates contained herein are subject to change and are uncertain due to imits on the avaiabiity and reiabiity of primary sources of information and the vountary nature of the data gathering process. As a resut, prospective investors shoud be aware that certain of the data contained herein, and estimates and beiefs based on that data, may not be reiabe. Athough the Company beieves the sources referred to herein are reiabe, neither the Company nor any of its affiiates has independenty verified such information and cannot guarantee its accuracy or competeness. GENERAL NOTICE This document has been drawn up in accordance with the AIM Rues and it does not comprise a prospectus for the purposes of the Prospectus Reguations 2005 in the United Kingdom. It has been drawn up in accordance with the requirements of the Prospectus Directive ony in so far as required by the AIM Rues and has not been deivered to the Registrar of Companies in Engand and Waes for registration. This document has been prepared for the benefit ony of the imited number of persons to whom it has been addressed and deivered and may not in any circumstances be used for any other purpose or be viewed as a document for the benefit of the pubic. Those persons are those persons faing within the exemptions to the financia promotion prohibition of section 21 of FSMA set out in artices 19 (investment professionas), 48 (certified high net worth individuas), 49 (high net worth companies, unincorporated associations etc), 50 (sophisticated investors) and 50A (sef-certified sophisticated investors). The reproduction, distribution or transmission of this document (either in whoe or in part) without the prior written consent of the Company and Numis is prohibited. 3

5 NOTICE TO OVERSEAS PERSONS This document does not constitute an offer to se or an invitation to subscribe for, or soicitation of an offer to subscribe for or buy, shares to any person in any jurisdiction to whom it is unawfu to make such offer, invitation or soicitation. In particuar, this document must not be taken, transmitted, distributed or sent, directy or indirecty, in, or into, the United States of America, Canada, Austraia, Japan, the Repubic of Ireand or the Repubic of South Africa or transmitted, distributed or sent to, or by, any nationa, resident or citizen of such countries. Accordingy, the Pacing Shares may not, subject to certain exceptions, be offered or sod, directy or indirecty, in, or into, the United States of America, Canada, Austraia, Japan, the Repubic of Ireand or the Repubic of South Africa or in any other country, territory or possession where to do so may contravene oca securities aws or reguations. The Pacing Shares have not been, and wi not be, registered under the US Securities Act or under the securities egisation of any state of the United States of America, any province or territory of the United States of America, Canada, Austraia, Japan, the Repubic of Ireand or the Repubic of South Africa and they may not be offered or sod, directy or indirecty, within the United States of America, Canada, Austraia, Japan, the Repubic of Ireand or the Repubic of South Africa or to or for the account or benefit of any nationa, citizen or resident of the United States of America, Canada, Austraia, Japan, the Repubic of Ireand or the Repubic of South Africa or to any US Person (within the meaning of Reguation S made under the US Securities Act). The distribution of this document outside the UK may be restricted by aw. No action has been taken by the Company or Numis that woud permit a pubic offer of shares in any jurisdiction outside the UK or possession of this document where action for that purpose is required. Persons outside the UK who come into possession of this document shoud inform themseves about the distribution of this document in their particuar jurisdiction. Faiure to compy with those restrictions may constitute a vioation of the securities aws of such jurisdiction. None of the Ordinary Shares may be sod, transferred or otherwise disposed of by any investor uness such Ordinary Shares are registered under the aws of a reevant jurisdictions or uness such sae, transfer or disposition is exempt from registration. United States securities aws The Pacing Shares are ony being offered and sod outside the United States to persons who are not US Persons (within the meaning of Reguation S under the US Securities Act ( Reguation S )) in transactions compying with Reguation S, which provides an exemption from the requirement to register the offer and sae under the US Securities Act. THE ORDINARY SHARES HAVE NOT BEEN (AND WILL NOT BE) REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY US STATE OR OTHER JURISDICTION AND WILL NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER LAWS. THE ORDINARY SHARES MAY NOT BE TRANSFERRED OR SOLD TO US PERSONS EXCEPT AS PERMITTED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY US STATE OR OTHER JURISDICTION. THE ORDINARY SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR BY ANY US STATE OR OTHER JURISDICTION SECURITIES COMMISSION OR AUTHORITY, NOR HAS ANY SUCH AUTHORITY PASSED ON THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE. 4

6 CONTENTS Page Expected Timetabe of Principa Events... 7 Directors and Advisers... 8 Definitions Part 1 The Business of the Enarged Group Part 2 Risk Factors Part 3 Accountant s Report and Historica Financia Information on the Company Part 4 Accountant s Report and Historica Financia Information on Agenda 21 Subco Part 5 Unaudited Pro Forma Statement of Net Assets Part 6 Additiona Information Part 7 Terms and Conditions of Pacing

7 KEY STATISTICS Existing share capita at the date of this document Existing Ordinary Shares in issue 128,250,000 Pacing Shares and Initia Consideration Shares Price per Pacing Share 3.25 pence Number of Pacing Shares to be issued by the Company 169,230,770 Number of Initia Consideration Shares to be issued by the Company 35,450,030 Enarged Share Capita 332,930,800 Percentage of the Enarged Share Capita represented by the 10.6% Initia Consideration Shares Percentage of the Enarged Share Capita represented by the Pacing Shares 50.8% Upon Admission Number of Ordinary Shares in issue at Admission 332,930,800 Number of Ordinary Shares which wi be subject to Options shorty foowing 82,253,001 Admission (1) Number of Ordinary Shares which are subject to the Numis Warrant (2) 4,993,962 Gross proceeds of the Pacing receivabe by the Company Estimated net proceeds of the Pacing receivabe by the Company Approximate market capitaisation of the Company at Admission (3) TIDM ISIN number SEDOL 5.5 miion 4.4 miion 10.8 miion BHRD GB00BT6SJV45 BT6SJV4 Notes: (1) It is intended that, in aggregate, 82,253,001 Ordinary Shares wi be the subject of Options shorty foowing Admission. (2) The Numis Warrant is in respect of 4,993,962 Ordinary Shares and is subject to sharehoder approva at the Enarged Group s next annua genera meeting or genera meeting if earier. For further information, see paragraph 14.4 of Part 6. (3) This is based on the Pacing Price and on the assumption that the Options in existence shorty foowing Admission and the Numis Warrant wi not be exercised. If the Options that are in existence shorty foowing Admission and the Numis Warrant were exercised in fu then the market capitaisation at Admission, based on the Pacing Price, woud be approximatey 13.7 miion. 6

8 EXPECTED TIMETABLE OF PRINCIPAL EVENTS Pubication of this Admission Document Canceation of admission to the Standard Segment of the Officia List and to trading on the London Stock Exchange s Main Market Admission and commencement of deaings in the Enarged Ordinary Share Capita on AIM CREST accounts credited (where appicabe) Dispatch of definitive share certificates (where appicabe) November 8.00 a.m. 23 November 8.00 a.m. 23 November 23 November 7 December Notes: (1) References to time in this document are to London (GMT) time. (2) If any of the above times or dates shoud change, the revised times and/or dates wi be notified to Sharehoders by an announcement on an RIS. 7

9 DIRECTORS AND ADVISERS Directors: Rodger Sargent (Non-executive director) David Wikinson (Non-executive director) Rakhi Parekh (Non-executive director) A Directors business addresses are at: 10 Norwich Street, London EC4A 1BD Proposed Directors: Registered Office from Admission: Company Secretary from Admission: Corporate website: Trading websites: Soicitors to the Company: Nominated Adviser and Broker: Soicitors to the Nominated Adviser: Soicitors to Agenda 21 Reporting Accountant to the Company: Peter Scott Robin Price Ian Maude 10 Norwich Street, London EC4A 1BD Robin Price Macfaranes LLP 20 Cursitor Street London EC4A 1LT Numis Securities Limited The London Stock Exchange Buiding 10 Paternoster Square London EC4M 7LT Fiedfisher LLP Riverbank House 2 Swan Lane London EC4R 3TT Wragge Lawrence Graham & Co 3 Waterhouse Square 142 Hoborn London EC1N 2SW BDO LLP 55 Baker Street London W1U 7EU 8

10 Auditors to the Company: Auditors to Agenda 21 Subco: PR advisers to the Company: Company Registrars: Haysmacintyre 26 Red Lion Square London WC1R 4AG Kingston Smith LLP Devonshire House 60 Goswe Road London EC1M 7AD Wabrook PR Ltd 4 Lombard Street London EC3V 9HD Shares Registrars Limited Suite E First Foor 9 Lion & Lamb Yard Farnham Surrey GU9 7LL 9

11 DEFINITIONS The foowing definitions appy throughout this document, uness the context requires otherwise: Act the Companies Act 2006 (as amended) Acquisition the acquisition of the entire issued share capita of Agenda 21 Hodco by the Company Acquisition Agreement the agreement (as amended) between the Company and the Vendors dated 9 October 2015 in reation to the acquisition of the entire issued share capita of Agenda 21 Hodco Admission admission of the Enarged Ordinary Share Capita to trading on AIM becoming effective in accordance with rue 6 of the AIM Rues Admission Document or this document dated 18 November 2015 Document Agenda 21 Agenda 21 Hodco and Agenda 21 Subco Agenda 21 Hodco Agenda 21 Digita Hoding Limited, a company incorporated in Engand and Waes with company number Agenda 21 Sae the purchase of controing interest in Agenda 21 or a disposa of, or substantiay a, of Agenda 21 s undertaking and assets after 30 Apri 2017 Agenda 21 Subco Agenda 21 Digita Limited, a company incorporated in Engand and Waes with company number Agenda 21 Subco Acquisition the acquisition agreement between Agenda 21 Hodco and the Agreement Agenda 21 Subco Vendors dated 9 October 2015, as amended, further detais of which are set out in paragraph 14.7 of Part 6 Agenda 21 Subco Vendors the sharehoders of Agenda 21 Subco immediatey prior to the competion of the Agenda 21 Subco Acquisition Agreement AIM the market of that name operated by the London Stock Exchange AIM Rues the rues from time to time (incuding, without imitation, any guidance notes or statements of practice) which govern the responsibiities of companies whose shares are admitted to trading on AIM Artices the artices of association of the Company adopted on 19 November 2014 Audit Committee the audit committee of the Board, as constituted from time to time Board the board of directors of the Company from time to time, or a duy constituted committee thereof BPR business property reief Business Day a day other than Saturday or Sunday on which banks are open for commercia business in the City of London CAGR compound annua growth rate certificated or in certificated recorded on the reevant register of the share or security concerned form as being hed in certificated form (that is not in CREST) City Code the UK City Code on Takeovers and Mergers as issued and administered by the Takeover Pane 10

12 Company Consideration Shares Consideration Loan Notes CREST Be Heard Group pc, a company incorporated in Engand and Waes with company number the Ordinary Shares (incuding the Initia Consideration Shares) to be issued to the Vendors (credited as fuy paid) as consideration for the sae of shares in Agenda 21 Hodco pursuant to and in accordance with the terms of the Acquisition Agreement the Fixed Rate Loan Notes and the Interest Free Loan Notes the computer based system and procedures which enabe tite to securities to be evidenced and transferred without a written instrument, administered by Eurocear UK & Ireand CREST Reguations the Uncertificated Securities Reguations 2001 (SI 2001 No. 3755) (as amended) Directors the directors of the Company as at the date of this document, whose detais are set out on page 8 of this document e-privacy Directive EU Directive 2009/136/EC EBITDA operating profit before finance costs, taxation, depreciation and amortisation Empoyee an individua who is empoyed by, or is a director of, the Company or any of its subsidiary undertakings or an individua whose services are otherwise made avaiabe to the Company or any of its subsidiary undertakings (and empoyment sha be construed accordingy to incude such an arrangement) EIS Enterprise Investment Scheme Enders Anaysis Enders Anaysis Limited, a company incorporated in Scotand with registered number SC Enarged Group the Company and Agenda 21 immediatey foowing competion of the Acquisition Enarged Share Capita the entire issued Ordinary Share capita of the Company as enarged by the issue of Pacing Shares and of new Initia Consideration Shares EU the European Union Eurocear UK & Ireand Eurocear UK & Ireand Limited, a company incorporated in Engand and Waes with registered number and the operator of CREST Executive Chairman Peter Scott foowing his appointment as a director of the Company Exercise Price the amount payabe to acquire an Ordinary Share on the exercise of an Option, as specified in the reevant option agreement Existing Ordinary Shares the Ordinary Shares in issue immediatey prior to Admission Exiting Agenda 21 Subco Vendors the two Agenda 21 Subco Vendors whose empoyment with Agenda 21 Subco terminated on competion of the Agenda 21 Subco Acquisition Agreement FCA Financia Conduct Authority Financia Promotion Order FSMA 2000 (Financia Promotion) Order 2005 Fixed Rate Loan Notes the 950, per cent. fixed rate guaranteed oan notes 2017, further detais of which are provided at paragraph 14.8 of Part 6 11

13 FSMA FY HMRC IFRS IHT Initia Consideration Shares Interest Free Loan Notes the Financia Services and Markets Act 2000 (as amended) in respect of each financia year, the Company s financia year ended or ending 31 December HM Revenue & Customs Internationa Financia Reporting Standards inheritance tax the Consideration Shares issued to satisfy the Vendor Initia Consideration the 500,000 interest free guaranteed oan notes 2017, further detais of which are provided at paragraph 14.8 of Part 6 ITEPA 2003 the Income Tax (Earnings and Pensions) Act 2003 KPI key performance indicators London Stock Exchange London Stock Exchange pc Loan Notes the Fixed Rate Loan Notes and the Interest Free Loan Notes Management Options the Options described in paragraph 5.1 of Part 6 New Ordinary Shares the new Ordinary Shares to be issued in connection with the initia consideration for the Acquisition and the Pacing Shares Nominations Committee the nominations committee of the Board, as constituted from time to time Numis Numis Securities Limited Numis Warrant the right to subscribe for 4,993,962 New Ordinary Shares pursuant to the terms of the Numis Warrant Agreement Numis Warrant Agreement the warrant agreement dated the date of this document entered into between the Company and Numis, further detais of which are contained in paragraph 14.4 of Part 6 of this document Officia List the Officia List of the UK Listing Authority Options options to acquire or subscribe for Ordinary Shares granted under the Option Scheme Optionhoder a hoder of Options Optionhoder Acquisition between Agenda 21 Hodco and certain of the Vendors, further Agreement detais of which are set out in paragraph 4.9 of Part 6 Option Scheme the Be Heard Group pc Option Scheme in its present form with, and subject to, any amendments propery effected from time to time Order the Financia Services and Markets Act 2000 (Financia Promotion) Order 2005 Ordinary Shares ordinary shares of 0.01 in the capita of the Company Pane the Takeover Pane Pacees the subscribers for Pacing Shares pursuant to the Pacing Pacing the conditiona pacing of the Pacing Shares by Numis, as agent for the Company, pursuant to the Pacing Agreement 12

14 Pacing Agreement the conditiona pacing agreement reating to the Pacing dated the same date as this document between: (1) the Company; (2) the Directors and the Proposed Directors; and (3) Numis, further detais of which are contained in paragraph 12 of Part 6 of this document Pacing Price 3.25 pence per Pacing Share Pacing Shares the 169,230,770 New Ordinary Shares to be issued pursuant to the Pacing Proposed Directors the individuas who have agreed to join the Board foowing Admission and whose detais are set out on page 8 of this document Prospectus Directive the Prospectus Directive (2003/71/EC) Prospectus Rues the Prospectus Rues made by the FCA pursuant to sections 73(A)(1) and (4) of FSMA PS Options the Options described in paragraph 5.11 of Part 6 QCA Corporate Governance QCA Corporate Governance Code for Sma and Midsize Quoted Code Companies 2013 pubished by the Quoted Companies Aiance Registrar the registrar of the Company whose name and address is set out on page 9 of this Document Reguation S Reguation S under the US Securities Act Reationship Agreement the agreement between the Company and Peter Scott dated 22 September 2015, further detais of which are set out at paragraph 14.6 of Part 6 Remuneration Committee the remuneration committee of the Board, as constituted from time to time Restricted Jurisdiction United States of America, Canada, Austraia, Japan, the Repubic of Ireand, the Repubic of South Africa, or in any other country outside of the United Kingdom where such distribution may ead to a breach of any appicabe ega or reguatory requirements RIS Reguatory Information Service Sae Date the date faing six months after the competion of the Agenda 21 Subco Acquisition Agreement SDRT Stamp Duty Reserve Tax Sharehoder(s) hoders of Ordinary Shares UK the United Kingdom of Great Britain and Northern Ireand UK Listing Authority the FCA, acting in its capacity as the competent authority for the purposes of FSMA uncertificated or recorded on the reevant register of the share or security concerned in uncertificated form as being hed in uncertificated form in CREST and tite to which, by virtue of the CREST Reguations, may be transferred by means of CREST US or USA or the United States of America and a of its territories and United States possessions US Securities Act The US Securities Act of 1933 USM the Unisted Securities Market operated by the London Stock Exchange between 1980 and

15 VAT Vendors Vendor Earn-Out Vendor Initia Consideration vaue added tax the sharehoders of Agenda 21 Hodco immediatey prior to competion of the Acquisition the earn-out eement of the consideration under the Acquisition Agreement an amount equa to Agenda 21 Subco s normaised EBITDA for the financia year ended 31 December 2015 mutipied by six 14

16 PART 1 THE BUSINESS OF THE ENLARGED GROUP 1. INTRODUCTION The Company was admitted to the Standard Segment of the Officia List and to trading on the London Stock Exchange s Main Market for isted securities on 22 December 2014, and in the process raised gross proceeds of 3,402,500 through a pacing of 106,750,000 Ordinary Shares. As set out in the Company s prospectus (which was pubished on 17 December 2014), the Company was formed to undertake an acquisition of a target company or business. The Company wi seek to buid a network of digita companies spanning the marketing services, technoogy and e-commerce sectors across the UK, the US and Europe. It wi seek to consoidate eading speciaists in key marketing sectors through targeted acquisitions, and provide access to deeper resources and a strong patform for growth. The Company intends to acquire best-in-cass digita marketing services, technoogy and e-commerce businesses in key revenue/growth sectors; for exampe, digita strategy, anaytics and insight, media panning and buying, content and creative, CRM, e-commerce and user experience. Mainstream content and media agencies with strong digita capabiities wi aso be considered. Each agency wi maintain its own brand and proposition whie benefiting from the Company s management team s experience of growing businesses and coaborating with other group agencies to enhance capabiities and everage resources. 2. HISTORY AND BACKGROUND 2.1 The Company The Company was incorporated on 17 September 2014 as a private imited company and re-registered on 20 November 2014 as a pubic imited company with the purpose of carrying out strategic acquisitions. As set out in the Company s prospectus (which was pubished on 17 December 2014) the Company indicated that it woud impement an operating strategy in respect of any acquisitions made with a view to generating vaue for its sharehoders through operationa improvements as we as potentiay through additiona compementary acquisitions foowing any initia acquisition. On 29 May 2015, the Company announced that it woud concentrate on acquisition targets within the TMT (technoogy, media and teecommunications) sector. The Company was admitted to trading to the Standard Segment of the Officia List and to trading on the London Stock Exchange s Main Market for isted securities on 22 December 2014, raising approximatey 3,400,000. On 9 October 2015 the Company entered into a conditiona Acquisition Agreement to purchase the entire issued share capita of Agenda 21 Hodco. Agenda 21 Subco was founded in 2005 and is a market-eading digita media agency operating in the UK and based in centra London. The business of Agenda 21 Subco is referred to as Agenda 21 in this Part of the Admission Document. 2.2 Agenda 21 Agenda 21 s core business is panning, buying and managing muti-channe marketing campaigns across the digita media spectrum on behaf of its cients. This incudes search engine marketing/pay-per-cick (SEM/PPC), search engine optimisation (SEO), dispay advertising, incuding socia, mobie and programmatic opportunities, and other paid media, underpinned by Agenda 21 s own proprietary anaytics. Agenda 21 has an entrepreneuria and motivated management team with over 35 years of combined experience. Agenda 21 has a track record of award winning work. In 2013, the company won Best Use of SEO in Drum Magazine s Dadi Awards, Best Financia Services Marketing Strategy at MiAwards and Best SEO Campaign in the 2013 Search Awards. In 2014, Agenda 21 ranked number three in the E-Consutancy Top 100 Digita Agencies. In 2015, it won the RAR Award for Digita Strategy for agencies with 40 to 99 members of staff. 15

17 Foowing the acquisition by the Company, Agenda 21 wi be ed by two of its co-founders and sharehoders: Pete Robins, co-founder and Sharehoder: Pete has 20 years experience working in media. He has been Chair of the IPA s Digita Media Group for the ast four years and was ranked third in Campaign s top 10 onine pioneers. Rhys Wiiams, co-founder and Sharehoder: Rhys has 15 years experience in media. He is on the IPA s Search Counci, advising and heping to set industry poicy on search marketing. Agenda 21 has achieved consistent financia performance and growth, deivering CAGR of 7 per cent. in gross income and 14 per cent. in normaised EBITDA between 31 December 2012 and 31 December Agenda 21 intends to continue to drive growth as we as efficiency with support and mentoring from the Company via: expanding its product-service offerings in data and insight, SEO/PPC, SEM, dispay advertising and other forms of digita marketing; buiding its digita expertise and increasing capacity and capabiities through key staff hires and taent management and deveopment; deveoping its existing proprietary technoogy to capitaise on automation in digita media, as we as everaging best-in-cass third-party technoogy to expoit emerging opportunities; and exporing bot-ons in areas such as data and anaytics. Agenda 21 s cient base covers a range of key industry sectors, incuding utiities, business-to-business (B2B) and business-to-consumer (B2C) goods and charities, and incudes severa notabe bue-chip companies. Agenda 21 has ow cient concentration compared to the industry standard, with the argest singe cient accounting for 11 per cent. of revenue and the top five cients representing 41 per cent. of revenue in In addition, it has a oya cient base. Approximatey 40 per cent. of Agenda 21 s cients have been with the agency for more than two years. Agenda 21 aso enjoys high eves of cient satisfaction. A recent survey commissioned as part of the Acquisition s due diigence process confirmed that Agenda 21 is rated more highy than the average UK digita agency among critica cient contacts (with a rating of 7.83 compared to 7.52 for comparabe digita agencies) (Source: The Rating Referra Report, produced by The Cient Reationship Consutancy LLP). Agenda 21 s key cients incude AA, Totajobs, Epson, Nord Angia, Investec, SSE, Pantronics, Jurys Inn, Macmian Cancer Support, Equifax, SIS and Prudentia. 2.3 Summary of principa terms of the Acquisition A summary of the main terms of the Acquisition is as foows: The consideration for the shares in Agenda 21 Hodco sha consist of: (1) an amount equa to Agenda 21 Subco s normaised EBITDA for the financia year ended 31 December 2015 mutipied by six ( the Vendor Initia Consideration ); and (2) an earn-out eement to be paid based on the growth in Agenda 21 Subco s EBITDA in the three years foowing the competion of the Acquisition (the Vendor Earn-out ). The maximum consideration sha not exceed 11,932, per cent. of the Vendor Initia Consideration sha be paid in cash, with the remainder setted by the aotment and issue of the Consideration Shares. The payment of the Vendor Initia Consideration sha be made in two tranches: 75 per cent. of the Initia Consideration sha be paid at competion (which is expected to be approximatey 3.3 miion) and 25 per cent. sha be paid once the 2015 statutory accounts have been approved. 16

18 65 per cent. of the Vendor Earn-out sha be satisfied in cash and, as to the remaining 35 per cent., by the issue of fuy paid Consideration Shares. The Vendor Earn-out wi be cacuated based on appying a mutipier to Agenda 21 Subco s average EBITDA growth. The mutipier wi increase depending on the percentage increase in the growth in EBITDA, from a mutipier of zero (for growth beow 5 per cent.) to a maximum mutipier of eight (for growth of 25 per cent. or more). The Company appied the cap to encourage top ine growth. The Acquisition is expected to compete on the date of Admission. Further detais of the terms of the Acquisition are set out at paragraph 14.1 of Part BUSINESS AND STRATEGY OVERVIEW 3.1 Overview The Company s strategic pan is to create a network of digita businesses spanning the marketing services, data and e-commerce sectors through acquiring compementary agencies in the UK, US and Europe. The Directors and the Proposed Directors beieve that current state of the digita advertising and marketing sector presents a significant opportunity to deveop a new digitay-centric network. A research report by Enders Anaysis was commissioned, which provided a thorough review of the current state of the market and supports the Directors and Proposed Directors investment thesis. Digita technoogy is transforming consumer behaviour, how business is conducted and reshaping the communications, media and marketing industries. Growth in spending on commerce, content and communications is increasingy digita and anaysts expect consumer and business expenditure on digita patforms to continue to rise. This shift to digita products and services presents new opportunities for businesses to se, market to and communicate with their existing and potentia customers. However, many marketing cients ack the speciaist skis and resources necessary to expoit the atest digita marketing technoogies and seek externa expertise to hep them deveop and execute digita marketing strategies. Acquiring and deveoping digita competencies has become and remains the key goa for the major marketing services hoding groups as traditiona agencies have been sow to adapt. At the same time, there has been a proiferation of digita speciaists, many of which ack the scae, access to capita and experience necessary to deveop and grow. In recent years, many of the mid-size independent digita groups have been acquired by hoding groups. As a resut, the Directors and the Proposed Directors beieve that there is a gap in the market and an opportunity to buid a new mid-size digitay-centric network, providing more fexibiity than hoding groups and greater scae than digita speciaists can achieve aone. The Company wi seek to acquire best-in-cass marketing services and reated businesses with strong digita capabiities in key service areas that are expected to grow. Initia investments wi focus on estabishing scae and reach in the UK, US and Europe. 4.4 miion raised by the aotment and issue of the Pacing Shares wi be used to fund future investments of the Company and working capita. The Company is deveoping a pan to compete a series of other acquisitions foowing the acquisition of Agenda 21. The Company has a network of contacts across the digita marketing industry as we as with intermediaries and advisors in the UK, the US and Europe. Management wi be seeking targets which meet the Enarged Group s investment criteria in terms of sector, management depth, cient retention, growth, margin and vauation. The Company wi be ed by experienced executive directors, supported by experienced non-executive directors. The proposed executive directors comprise Peter Scott, Robin Price and Ian Maude (a of whom are expected to be appointed shorty foowing Admission). The non-executive directors comprise Rakhi Parekh, David Wikinson and Rodger Sargent. More detais on each of the non-executive directors are set out at paragraph 7.1 of this Part 1. 17

19 3.2 Operating mode The operating mode for the Company wi be based on four principes: Acquire best-in-cass digita businesses and expand their product/service offerings As detaied above, the main areas of focus wi incude digita strategy, anaytics and insight, media panning and buying, search (incuding SEM/PPC and SEO), socia media, CRM, e-commerce, user experience and creative and content. Cross-se services and deveop new business opportunities Seeking to utiise the Company s management team s experience and shared resource across the network to increase share of budget from existing cients, attract new and arger cients and deveop new hoistic digita service offerings. Enhance key partnerships Being part of the Company s network is expected to enabe agencies to buid stronger partnerships with media and technoogy companies, improve procurement functions and share and benefit from best practices and knowedge across the group. Consoidate investment & finance functions This wi incude a group eve taent acquisition and management programme, pooed investment in technoogy and other services where appropriate. The Company wi aso consoidate back-office and treasury functions. 3.3 Acquisition approach The Company is deveoping a dea pipeine with a second acquisition targeted for the first haf of The Company s investment approach wi be based on acquiring companies in the UK and overseas with an enterprise vaue typicay up to 50 miion and is ikey to invove further equity fundraising. The Company has been receiving information on other potentia target businesses and expects dea fow to acceerate once the Acquisition has competed and after Admission. It is expected that the consideration for the companies that the Company acquires wi be paid for argey in Ordinary Shares, subject to ock-in agreements, with an earn-out structure over three to five years. Standard but stringent good/bad eaver protections wi be put in pace in reation to those Ordinary Shares with a view to empoyee retention. The Company recognises that future mutipes and dea structures wi need to remain fexibe and in ine with markets. 3.4 Management strategy The Company wi be buit as a sma, tighty managed group focused on adding vaue to the operating units via: Strong eadership team with experience of growing businesses; Taent management and deveopment; Technoogy eadership and shared expertise; New business resource to attract new cients and cross-se existing cients; Back office, treasury, IT, anaytics and business deveopment consoidation; and Cutura aignment. 4. MARKET AND OPPORTUNITY 4.1 Market size and growth Digita technoogies are increasingy repacing traditiona methods of communicating and consuming information and doing business. Growth in spending on commerce, content and communications is increasingy being driven by digita products and services. 18

20 As a resut, anaysts expect consumer and business expenditure on digita patforms to continue to rise. A recent report pubished by Accenture and Aibaba projects that by 2020 goba consumer spending on e-commerce wi grow by 114 per cent. to $3.4 triion (see Figure 1). Figure 1: B2C consumer e-commerce ($ biion) 4,000 3,000 Growth: 114% 3,394 2,000 1,589 1, f Source: Enders Anaysis based on Accenture/Aibaba Over the same timeframe, Enders Anaysis, a eading UK-based TMT research firm, project that consumer spending on digita content wi ecipse that on traditiona media and wi reach $1 triion by 2020, an increase of 79 per cent. over 2014 (see Figure 2). Figure 2: Digita content expenditure ($ biion) 1,250 1,000 Growth: 79% 1, f Source: McKinsey & Co/Enders Anaysis Increasing adoption of internet-connected devices and innovation in technoogy are reshaping the media, marketing and communication industries. As a resut, companies are increasingy using digita media channes to deiver marketing communications and to deveop reationships with key customer target groups. This is refected in the rapid growth in onine advertising expenditure over the ast decade. Between 2010 and 2014, goba advertising spend on the internet increased from $67 biion to $123 biion, which represents a quarter of goba advertising spend, and an increase mainy at the expense of print media. 19

21 By 2020, Enders Anaysis estimates that the internet wi overtake broadcast teevision to become the argest goba advertising medium, with tota spend increasing by 12 per cent. CAGR to 158 biion and, as such, wi account for more than a third of a advertising expenditure (see Figure 3). Figure 3: Goba Advertising Expenditure ($ biion) Broadcast TV Print Internet Source: Enders Anaysis based on GroupM/ZenithOptimedia The internet has aready become the argest goba advertising medium in the UK, having surpassed broadcast teevision in In Western Europe, internet advertising spend overtook that on broadcast teevision in Other advertising markets, incuding the US, are expected to foow suit in the next few years. To date, growth in digita advertising has been driven by direct response and cassified advertising; the demand for brand and dispay advertising is expected to increase and is expected to drive the growth in digita advertising even further. 4.2 New marketing competencies New distribution channes, incuding mobie, socia and internet video, and trading patforms, incuding advertising exchanges, programmatic buying and rea-time bidding, mean that digita marketing is becoming more fragmented and compex. With the shift towards digita media, new marketing competencies are required. Consequenty, many marketers seek externa digita expertise. Recent surveys indicate that many advertising cients beieve that the eve of compexity in marketing wi increase and rate themseves as unprepared to dea with this (source: Enders Anaysis). Socia media, digita content, and mobie are now viewed as some of the most important discipines in digita marketing. These sectors are driving projected growth in marketing spend. However, they are aso seen by many marketers as the most difficut to execute successfuy (Figure 4). 20