Actual Experience plc (LON:ACT), the analytics-as-a-service company, has announced its intention to raise gross proceeds of £10.0 million by means of a placing to institutional investors, of new ordinary shares of 0.2 pence each in the Company, at a price of no less than 105.0 pence per share.
The minimum Issue Price is at a discount of approximately 13.9 per cent. to the mid-market closing price of an existing ordinary share of 122.0 pence on 20 January 2021, the last practicable date prior to the date of this Announcement.
Nplus1 Singer Capital Markets Limited is acting as nominated adviser, sole bookrunner and sole broker in connection with the Placing.
The Placing will be conducted through an accelerated bookbuilding process which will be launched immediately following this Announcement. The timing of the closing of the Bookbuild and allocations are at the absolute discretion of N+1 Singer and the Company. The result of the Placing will be announced as soon as practicable after the close of the Bookbuild. The Placing is not being underwritten (in whole or in part) by N+1 Singer or any other person.
As part of the Placing, the Company is also seeking to raise funds by the issue of the EIS/VCT Placing Shares. The EIS/VCT Placing Shares to be issued pursuant to the Placing will rank as “eligible shares” for the purposes of the Enterprise Investment Scheme and will be capable of being a “qualifying holding” for the purposes of investment by venture capital trusts to investors seeking the benefit of tax advantages pursuant to the Enterprise Investment Scheme and available to venture capital trusts, respectively, each as governed by HMRC. The EIS/VCT Placing Shares will be unconditionally issued to the relevant Placees at First Admission (being one Business Day prior to the anticipated date of Second Admission). No assurance has been obtained from HMRC that a subscription for Ordinary Shares is a “qualifying holding” under EIS or VCT legislation.
The Placing is being conducted in three tranches.
The EIS/VCT Placing Shares will be allotted and issued pursuant to the EIS/VCT Placing and are expected to be admitted to trading on AIM on or around 27 January 2021. The General Placing Shares will be allotted and issued pursuant to the General Placing and are expected to be admitted to trading on AIM on or around 28 January 2021. The EIS/VCT Placing and General Placing will utilise the Company’s existing shareholder authorities to issue new shares on a non-pre-emptive basis for cash.
Subject to the passing of the Resolutions, the Conditional Placing Shares will be allotted and issued pursuant to the Conditional Placing and are expected to be admitted to trading on AIM on or around 9 February 2021.
First Admission and Second Admission are conditional, inter alia, upon the Placing Agreement not having been terminated and becoming unconditional in respect of the EIS/VCT Shares and the General Placing Shares. Admission of the Conditional Placing Shares (at Third Admission) is also conditional, inter alia, upon the passing of the Resolutions by the Shareholders at the General Meeting to be held at 11.00 a.m. on 8 February 2021 and upon the Placing Agreement not having been terminated and becoming unconditional in respect of the Conditional Placing Shares. The notice convening the General Meeting will be set out in the Circular expected to be sent to Shareholders on or around 22 January 2021.
This Announcement should be read in conjunction with the Trading Update published by the Company earlier today.
Defined terms used in this Announcement are defined and explained at the end of this Announcement in the section headed “Definitions”.
Background for the Placing and Use of Proceeds
In the first six months of the financial year 2020, the Company completed its pivot from a managed services-led offering to one of professional services. The Covid-19 pandemic initially slowed down the implementation of the professional services offering as it diverted attention of all of the Company’s Channel Partners towards implementing business continuity processes, not just for their customers but for their own organisations.
However, as the Channel Partners and their customers have adapted to new ways of conducting their businesses in light of the pandemic, with a shift to remote and home working, the relevance of and opportunity for the Company’s offering has increased significantly. The Company has been working closely with new and existing Channel Partners to support their customers in this new environment and has seen early indications of increasing levels of engagement and shorter sales cycles as a result. As well as significant reduction to sales cycles, the introduction of HXM also facilitates a seat-based pricing model. Since August 2020, the Company’s Channel Partners have rapidly established a list of target customers amounting to over 4 million addressable employees or seats highlighting a significant opportunity for the Company.
The Company believes that it now has a solid operational platform and sales funnel with its Channel Partners to enable it to effect customer deployments more quickly, efficiently and on a larger scale. The Company intends to use part of the proceeds of the Placing to expand its sales and support teams in response to the expanding pipeline of sales prospects, and smoothly on-board the Company’s new partners. Part of the Placing proceeds will also be deployed to expand the Company’s technology development team to facilitate the development of enhanced cloud efficiency and scalability, as well as increased automation of report generation for the PS engagements.
The balance of the proceeds will be used to fund general working capital requirements and strengthen the Company’s balance sheet.
Details of the Placing
The Placing is subject to the terms and conditions set out in the Appendix to this Announcement.
The Placing Shares, when issued, will be fully paid and will rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of issue.
The Placing Agreement
Pursuant to the terms of the Placing Agreement, N+1 Singer, as agent for the Company, has conditionally agreed to use its reasonable endeavours to place the Placing Shares with institutional investors. The Placing has not been underwritten. The Placing Agreement is conditional upon, amongst other things, First Admission becoming effective on or before 8.00 a.m. on 27 January 2021, Second Admission becoming effective on or before 8.00 a.m. on 28 January 2021 and Third Admission becoming effective on or before 8.00 a.m. on 9 February 2021 (or, in each case such later time and/or date as the Company and N+1 Singer may agree, but in any event by no later than 8.00 a.m. on 15 February 2021).
The Placing Agreement contains warranties from the Company in favour of N+1 Singer in relation to, inter alia, matters relating to the Company and its subsidiary undertakings and its business. In addition, the Company has agreed to indemnify N+1 Singer in relation to certain liabilities it may incur in respect of the Placing. N+1 Singer has the right to terminate the Placing Agreement in certain circumstances prior to the Admissions, in particular, in the event that any of the warranties given to N+1 Singer in the Placing Agreement are untrue or inaccurate in any respect; the failure of the Company to comply in any material respect with its obligations under the Placing Agreement; the occurrence of a force majeure event or a material adverse change affecting the condition, the earnings or business affairs or prospects of the Group as a whole, whether or not arising in the usual course of business or; any statement contained in the Placing Agreement, or other document published by the Company or on its behalf in relation to the Placing is or has become untrue, inaccurate or misleading in any material respect.
The Appendix sets out further information relating to the Bookbuild and the terms and conditions of the Placing. Persons who have chosen to participate in the Placing, by making an oral, electronic or written offer to acquire Placing Shares, will be deemed to have read and understood this Announcement in its entirety (including the Appendix) and to be making such offer on the terms and subject to the conditions herein, and to be providing the representations, warranties, agreements, acknowledgements and undertakings contained in the Appendix.