RNS Number:5399N
Plasmon PLC
07 February 2008
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES,
CANADA, AUSTRALIA, JAPAN, REPUBLIC OF SOUTH AFRICA OR THE REPUBLIC OF IRELAND
Plasmon Plc ("Plasmon" or the "Company")
Growth strategy update and proposed placing of 100,000,000 new ordinary shares
at 10 pence per share to raise �10 million before expenses
Introduction
The Board of Plasmon today announces a major growth strategy update and a
proposed placing to raise approximately �10 million, before expenses, by way of
a placing of 100,000,000 new ordinary shares at 10 pence per share ("Placing").
The Placing is subject to shareholder approval. A circular, which comprises a
prospectus ("Prospectus"), setting out further details of the Placing and
including a notice convening a general meeting of the Company, is expected to be
dispatched to shareholders in early March 2008.
Growth strategy update
The $45bn global storage market continues to grow and, within this, archive
storage revenues are forecast to increase from $9bn in 2007 to $23bn by 2010.
Business and public sector organisations recognise that most of their rapidly
growing storage of data is rarely accessed after 90 days. However, they are
faced with a need to make such data readily available to meet legal and
regulatory requirements. There is, therefore, an increasing opportunity to move
rarely-accessed data archives from expensive hard disk (RAID) servers to a lower
cost, more permanent storage infrastructure tier.
Plasmon's archive solutions (based on the proven UDO optical disk technology)
offer immediate recall of archive data, with high levels of data authenticity
and longevity at a significantly lower cost than RAID. Plasmon's Archive
Appliance also consumes less power than disk storage, at a time when the
environmental impact of growing data centres is a concern. By combining the
performance of disk with the low cost of traditional tape archives and the
integrity of a permanent, non-magnetic media, Plasmon is building on 20 years of
leadership in professional optical storage, and its unique intellectual
property, with the objective of becoming the archive solution provider of
choice.
Steven Murphy was appointed CEO in November 2007, bringing a long record of
senior corporate leadership and entrepreneurial success in the storage and
systems management industry. He was previously president of Amdahl Software and
Fujitsu Software Inc. and most recently led an MBO of Softek, where, as CEO, he
transformed the business into a leading provider of data migration solutions and
successfully negotiated its sale to IBM in 2007.
Steven has accelerated Plasmon's sales execution strategy in order to deliver
faster growth in higher value customer segments. Key to this strategy is the
development of a customer-facing marketing, sales and service channel; focused
on stimulating awareness and demand within major enterprise customers in support
of the current third party reseller channel.
This strategy will build on two successes achieved in 2007. Firstly, the
signing of 16 new reseller channel partners which, in 1H08, grew Archive
Appliance sales by c.50 per cent year-on-year and increased the sales pipeline
fourfold. Secondly, a major programme of operational restructuring, which has
already reduced the overhead cost base by 17 per cent and, the Company expects,
will have reduced headcount by 25 per cent when the outsourcing of hardware
manufacturing is concluded in June 2008. Contribution margin on sales is now
approaching management's target of 60 per cent.
Rod Powell (Non-Executive Chairman) said "The Board and I are delighted with the
impact Steven Murphy has made in the last 2 months. His experience and skills
are exactly what the Company needs to turn its technology leadership into market
leadership."
Steven Murphy (Chief Executive) said "Archiving is becoming a mainstream
application just as the Archive Appliance is being recognised as the solution of
choice. We now have access to the people and resources we need to deliver
exceptional sales growth."
Reasons for the Placing
To achieve its growth objectives, the Company wants to invest in the development
of a direct customer-facing sales and service channel. This will involve the
recruitment of senior (predominantly US-based) executives, most of whom have
been identified and are ready to join the business. The directors believe that
existing facilities will fund the working capital requirement relating to sales
growth.
The proceeds of the Placing are expected to be �10 million before expenses and
will be used to:
* fund recruitment and investment in the customer-facing sales and service
channel and industry marketing strategy;
* strengthen the Company's intellectual property in the 'software solution
layer' of Archive Appliance; and
* fund the working capital requirements of the Company and provide customers
and employees with confidence in Plasmon's long-term growth prospects.
Primarily as a result of this investment in a faster growth strategy, the
Company is now deferring its cash break-even target to 2H09.
Details of the Placing
The Company proposes to issue 100,000,000 new ordinary shares by way of a
Placing at 10p each to raise �10 million before expenses.
The Placing is conditional on, inter alia, shareholder approval and admission of
the new shares to listing on the Official List and trading on the London Stock
Exchange's market for listed securities ("Admission") becoming effective by not
later than 31 March 2008 (or such later date, being not later than 28 April
2008, as the Company and Kaupthing Singer & Friedlander Capital Markets Ltd may
agree).
New Ordinary Shares
Application will be made to the UK Listing Authority and to the London Stock
Exchange for Admission. Subject to the fulfilment of the conditions of the
Placing, it is expected that Admission will become effective and that dealings
will commence in the new ordinary shares around the end of March 2008 and CREST
accounts will be credited on that date. A further announcement will be made in
due course advising of the expected date of admission.
Details of the Placees
Invesco Perpetual - funds managed by Invesco Perpetual hold approximately 29.4
per cent of the existing share capital of the Company. 29,420,211 new ordinary
shares have been conditionally placed with Invesco Perpetual on the same terms
as the other placees. Following admission of the new ordinary shares, Invesco
Perpetual will hold approximately 29.4 per cent of issued share capital of
Plasmon.
Hanover Investors, currently holds approximately 25.0 per cent of the existing
share capital of the Company. 26,838,200 new ordinary shares have been
conditionally placed with Hanover Investors on the same terms as the other
placees. Following admission of the new ordinary shares, Hanover Investors will
hold approximately 25.8 per cent of issued share capital of Plasmon. Matthew
Peacock, a non-executive director of the Company, is a partner of Hanover
Investors.
In addition, the other directors of the Company intend to subscribe for
1,500,000 of the new ordinary shares to be issued under the Placing.
The other placees are primarily investment management firms and existing
shareholders in Plasmon.
The resolution to approve the issue of new ordinary shares will include consent
for the issue of new ordinary shares to Invesco Perpetual and Hanover Investors
which is required by the Listing Rules as Invesco Perpetual and Hanover
Investors each hold over 10 per cent. of the issued share capital of the Company
and are therefore deemed to be a related parties to the Company.
Proposed Long-Term Incentive Plan
As part of the Placing, the Company proposes to introduce a long-term incentive
plan under which Steven Murphy, Chief Executive, will be awarded a conditional
grant of shares in the Company ("LTIP"). The LTIP, which is subject to the
approval of shareholders at the General Meeting, will grant approximately 6.6
million shares to Steven Murphy which will vest over a three year period
depending on share price performance, with a starting threshold of 35p per share
and fully vesting if 120p per share is achieved. Further details of the LTIP
will be disclosed in the Prospectus.
General Meeting
The Placing is conditional, inter alia, upon the approval of certain resolutions
at a general meeting of the Company. The resolution to be proposed at the
general meeting will seek approval to:
a) increase the authorised share capital of the Company from �10,000,000 to
�15,000,000 by the creation of 100,000,000 ordinary shares of 5p each;
b) authorise the directors to issue the 100,000,000 shares under the Placing
for cash at 10p per share;
c) approve allotment of shares under the Placing at a discount in excess of
10 per cent;
d) waive statutory pre-emption rights in respect of the 100,000,000 new
ordinary shares;
e) approve the placing of shares with funds owned or controlled by Invesco
Perpetual and Hanover Investors; and
f) approve the proposed LTIP.
Outline Timetable
It is expected that a prospectus including a notice of the general meeting will
be sent to shareholders of the Company in early March 2008 and that admission of
the new Ordinary Shares will take place following the general meeting in late
March 2008.
For further information, please contact
Plasmon Plc
Steven Murphy, Chief Executive 01763 261 466 / +1 703 628 3871
Timothy Arthur, Finance Director 01763 261 466
Kaupthing Singer & Friedlander Capital Markets Ltd.
Paul Wedge / James Maxwell 020 3205 5000
Citigate Dewe Rogerson
Martin Jackson / Ged Brumby 020 7638 9571
Kaupthing Singer & Friedlander Capital Markets Ltd, which is a member of the
London Stock Exchange and is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting exclusively for Plasmon in
connection with the Placing and is not acting for any person other than Plasmon
and will not be responsible to any person other than Plasmon for providing the
protections afforded to its customers or for providing advice on the
transactions and arrangements proposed in this announcement.
This announcement does not constitute a prospectus and does not form part of any
offer of securities, or constitute a solicitation of any offer to purchase or
subscribe for securities in any jurisdiction, and nor shall it, or any part of
it, or the fact of its distribution form the basis of, or be relied on, in
connection with, or act as an inducement to enter into, any contract therefor.
This announcement is not for release, publication or distribution, in whole or
in part, in or into Australia, Canada, Japan, the Republic of South Africa, the
Republic of Ireland, or the United States or to any national, resident or
citizen of Australia, Canada, Japan, the Republic of South Africa, the Republic
of Ireland, or the United States or any other jurisdiction where to do so would
constitute a violation of the relevant laws of such jurisdiction.
This announcement and the information contained herein are not an offer of
securities for sale or a solicitation of an offer to buy any securities in the
United States or by any US person and are not for publication or distribution in
the United States (within the meaning of Regulation S under the US Securities
Act of 1933, as amended (the 'Securities Act')). The securities proposed to be
offered in the Company have not been and will not be registered under the
Securities Act, any state securities laws in the United States or under the
applicable securities laws of Australia, Canada, the Republic of Ireland, the
Republic of South Africa or Japan.
Subject to certain exceptions, the securities may not be offered or sold within
the United States, Australia, Canada, the Republic of Ireland, the Republic of
South Africa or Japan or to any national, resident or citizen of the United
States, Australia, Canada, the Republic of Ireland, the Republic of South Africa
or Japan. Pursuant to the placing, the securities may not be offered or sold in
the United States, or to, or, subject to certain specific exception, for the
account or benefit of U.S. Persons as defined in Regulation S under the
Securities Act ('Regulation S'). The distribution of this announcement in other
jurisdictions may be restricted by law and the persons into whose possession
this announcement comes should inform themselves about, and observe, any such
restrictions.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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