Amino Technologies : Proposed acquisition of Entone, Inc. and Placing by way of an accelerated bookbuild to raise £21.0 million

Amino Technologies PLC:Proposed acquisition of Entone, Inc. and Placing by way of an accelerated bookbuild to raise £21.0 million

21 Jul 2015

THIS ANNOUNCEMENT, AND THE INFORMATION CONTAINED HEREIN, IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA, CANADA, THE REPUBLIC OF SOUTH AFRICA, AUSTRALIA, JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

21 July 2015

Amino Technologies PLC

("Amino" or the "Company")

Proposed acquisition of Entone, Inc.

and

Placing by way of an accelerated bookbuild to raise £21.0 million

Amino Technologies PLC (LSE: AMO), the Cambridge-based provider of digital entertainment solutions for IPTV, Internet TV and in-home multimedia distribution, announces that it has conditionally agreed to acquire the entire issued share capital of Entone, Inc. ("Entone") for a total consideration of $73.0 million (£46.7 million).

Acquisition Highlights

· Acquisition of Entone, a provider of broadcast hybrid TV and connected home solutions:

o a market leader in the US IPTV market

o 150+ global customers

o highly experienced management team

· Strategic rationale:

o the Acquisition will increase global footprint and scale

o consolidation of a direct competitor

o synergies identified (anticipated EBIT synergies of approximately £1.0 million in first full year of ownership)

o the Directors believe that the combination of high quality management, cost synergies, supply chain enhancement and economies of scale will lead to enhanced operational performance for the Enlarged Group

· Total Consideration of $73.0 million (£46.7 million):

o Initial Consideration of $65.0 million (£41.6 million), payable to Entone Equityholders on Completion, in cash

o Deferred Consideration of $8.0 million (£5.1 million), payable to qualifying Entone Management on the first and second anniversaries of Completion, in cash (of which a proportion will be used to subscribe for the Deferred Consideration Shares)

· Acquisition to include Entone's balance sheet as at Completion. As at 31 May 2015, Entone had net cash of $12.0 million, and net assets of $15.9 million

· Acquisition expected to be significantly earnings accretive in first full year of ownership (FY2016)

Summary of Placing

· Placing of 16,153,846 Placing Shares at 130.0 pence per Placing Share to raise gross proceeds of £21.0 million

· Placing by way of an accelerated bookbuild

· Books are open with immediate effect

Canaccord Genuity has been appointed as financial adviser and joint bookrunner in connection with the Acquisition and Placing. finnCap, Amino's Nominated Adviser, has been appointed as joint bookrunner in connection with the Placing (together, with Canaccord Genuity, the "Joint Bookrunners").

Completion of the Acquisition is conditional, inter alia, on completion of the Placing. The Placing will comprise a non pre-emptive placing of new Ordinary Shares conditional, inter alia, on Shareholder approval at the General Meeting, expected to be held on 10 August 2015.

Interim Results and Current Trading

The Company also today announces its unaudited results for the six month period ended 31 May 2015 which demonstrates strong first half performance with year-on-year revenue growth of 9 per cent. and EBITDA growth of 34 per cent., before exceptional items.

The Company anticipates that the traditional second half seasonal weighting in revenues will continue in the current year. The Group is trading in line with expectations for the year ending 30 November 2015, with the second half of the financial period commencing well.

The Company is confident in the outlook for the remainder of FY15 and reiterates its commitment to pursue a progressive dividend policy of no less than 10 per cent. growth per annum up to and including the year ending 30 November 2016. Full details of the interim results and the dividend declaration are set out in a separate announcement released today.

Acquisition of Entone

The Company has conditionally agreed to acquire the entire issued share capital of Entone for the Total Consideration of $73.0 million (£46.7 million).

The Total Consideration will comprise:

· Initial Consideration of $65.0 million (£41.6 million), payable to Entone's Equityholders, entirely in cash, to be funded by:

o the Placing - to raise gross proceeds of £21.0 million;

o the existing cash resources of the Company - as at 31 May 2015 Amino had a cash balance of £17.3 million; and

o the Revolving Credit Facility - $8.0 million (£5.1 million) is expected to be drawn down, in dollars, to fund the Acquisition.

· Deferred Consideration of $8.0 million (£5.1 million), payable to qualifying Entone Management only, in cash, of which a proportion will be used to subscribe for the Deferred Consideration Shares (such proportion of cash and Deferred Consideration Shares is to be pre-determined at the election of Entone Management prior to Completion, with a minimum share component election obligation of 50 per cent.), such payment to be structured as follows:

o $5.0 million (£3.2 million) to be paid on the first anniversary of Completion; and

o a further $3.0 million (£1.9 million) to be paid on the second anniversary of Completion.

Entone is a provider of hybrid TV and connected home solutions. The Acquisition is expected to enhance Amino's global footprint and enable Amino to expand its addressable market. The Acquisition is expected to be significantly earnings accretive to Amino in its first full financial year of ownership (FY2016).

Entone has consistently demonstrated above peer growth. Entone had revenues of $43.4 million in the fiscal year ended 30 June 2014 (2013: $29.2 million) and EBITDA of $3.9 million (2013: $(1.4) million) (audited financial information). In the 11 month period to 31 May 2015, Entone had revenues of $46.7 million and EBITDA of $5.1 million (unaudited management accounts). As at 31 May 2015, Entone had net cash of $12.0 million and net assets of $15.9 million.

Details of the Placing

Amino proposes to raise £21.0 million (before commissions, fees and transaction costs) by way of a conditional placing on a non pre-emptive basis of 16,153,846 Placing Shares at the Placing Price of 130.0 pence per Placing Share, via an accelerated bookbuild. The Placing Price represents a 6.5 per cent discount to the closing middle market quotation price of an Ordinary Share on 20 July 2015 (of 139.0 pence per Ordinary Share).

The books for the Placing will open with immediate effect. The books are expected to close no later than 10.00 a.m. London time on 21 July 2015. The timing of the closing of the books and the making of allocations may be accelerated or delayed at the Joint Bookrunners' discretion. The appendix to this announcement contains detailed terms and conditions applicable to the Placing. The Placing is not underwritten.

By choosing to participate in the Placing and by making an oral and/or written legally binding offer to acquire Placing Shares, investors 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 contained herein and to be making the representations, warranties, undertakings and acknowledgements contained in the appendix to this announcement.

Participation in the Placing will be restricted to institutional investors and the directors of the Company.

The issue of the Placing Shares is conditional, inter alia, upon the passing of the Resolutions at the General Meeting and upon the Admission becoming effective. The General Meeting will be held at 10.00 a.m. on 10 August 2015 at the offices of finnCap Ltd at 60 New Broad Street, London EC2M 1JJ.

Application will be made to the London Stock Exchange for the Placing Shares to be admitted to trading on AIM. Subject to the Resolutions having been passed and the Placing Agreement not having been terminated in accordance with its terms, it is expected that Admission will become effective and that dealings in the Placing Shares will commence at 8.00 a.m. on or around 11 August 2015 (or such other time and/or date, being no later than 8.00 a.m. on 18 August 2015, as Canaccord Genuity, finnCap and the Company may agree).

A circular to Shareholders is expected to be posted shortly, including details of the General Meeting and the Resolutions (the "Circular").

The Board unanimously recommends that Shareholders vote in favour of the Resolutions at the General Meeting, as they intend to do in respect of their own beneficial holdings of Ordinary Shares amounting to, in aggregate, 1,103,495 Ordinary Shares, representing approximately 2.04 per cent of the Existing Voting Rights.

Donald McGarva, Chief Executive of Amino, commented:

"The proposed acquisition of Entone has the potential to transform our business and broaden our capabilities and market reach globally across IPTV, hybrid broadcast and a range of connected home solutions. It also aligns closely with our recent acquisition of cloud-TV platform provider Booxmedia, in enabling us to meet the evolving needs of customers across a range of markets as they transition to cloud-based IP-driven multiscreen entertainment delivery. We anticipate a number of synergies between the two companies and expect the proposed acquisition to be earnings enhancing in the first full year of combined operations."

Steve McKay Chief Executive of Entone, commented:

"Bringing together Amino and Entone would create a significant new presence in the pay-TV market with solutions and skillsets that are highly complementary. We share a very similar vision as to how our industry is changing and the kinds of solutions that are required to address both existing and new customers."

For further information please contact:

Amino Technologies PLC
[phone]

Thomas Keith Todd CBE, Chairman
Donald McGarva, Chief Executive Officer
Julia Hubbard, Chief Financial Officer

FTI Consulting LLP (Financial PR)
[phone]
Matt Dixon / Chris Lane / Alex Le May

Canaccord Genuity Limited (Financial Adviser and Joint Bookrunner)
[phone]
Simon Bridges / Piers Coombs / James Craven / Emma Gabriel

finnCap Ltd (NOMAD and Joint Bookrunner)
[phone]
Stuart Andrews / Matt Goode / Carl Holmes (Corporate Finance)
Simon Johnson (Corporate Broking)

Presentation of financial information
The rate of exchange used for information in this announcement is US$1.5635 to £1, as published in the Daily Official List of the London Stock Exchange on 17 July 2015.

Important notice
This announcement, including the Appendix, and the information contained herein is not for release, publication or distribution, directly or indirectly, in whole or in part, in or into or from the United States, Canada, the Republic of South Africa, Australia, Japan or any other jurisdiction where to do so might constitute a violation of the relevant laws or regulations of such jurisdiction.

This announcement does not constitute or form part of any offer to sell, or any solicitation of an offer to buy, securities in the United States. Securities may not be offered or sold in the United States absent (i) registration under the Securities Act or (ii) an available exemption from registration under the Securities Act. The Placing Shares have not been and will not be registered under the Securities Act or under the securities laws of any state or other jurisdiction of the United States and may not be offered, sold, resold or delivered, directly or indirectly, in or into the United States absent registration except pursuant to an exemption from or in a transaction not subject to the registration requirements of the Securities Act. No public offering of the Placing Shares is being made in the United States. The Placing is being made (i) outside the United States in offshore transactions (as defined in Regulation S under the Securities Act ("Regulation S")) meeting the requirements of Regulation S under the Securities Act; and (ii) to a limited number of "qualified institutional buyers" within the meaning of Rule 144A under the Securities Act who have executed and delivered a United States investor representation addressed to the Company and the Joint Bookrunners substantially in the form agreed between the Company and the Joint Bookrunners, in transactions that are exempt from or not subject to the registration requirements of the Securities Act. Persons receiving this announcement (including custodians, nominees and trustees) must not forward, distribute, mail or otherwise transmit it in or into the United States or use the United States mails, directly or indirectly, in connection with the Placing.

This announcement does not constitute an offer to sell or issue or a solicitation of an offer to buy or subscribe for Placing Shares in any jurisdiction including, without limitation, the United States, Canada, the Republic of South Africa, Australia, Japan or any other jurisdiction in which such offer or solicitation is or may be unlawful (a "Prohibited Jurisdiction"). This announcement and the information contained herein are not for publication or distribution, directly or indirectly, to persons in a Prohibited Jurisdiction unless permitted pursuant to an exemption under the relevant local law or regulation in any such jurisdiction. No action has been taken by the Company, Canaccord Genuity, finnCap or any of their respective affiliates that would permit an offer of the Placing Shares or possession or distribution of this announcement or any other publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons receiving this announcement are required to inform themselves about and to observe any such restrictions.

This announcement is directed at and is only being distributed to: (A) persons in member states of the European Economic Area who are "qualified investors", as defined in article 2.1(e) of the Prospective Directive (Directive 2003/71/EC) as amended, (B) if in the United Kingdom, persons who (i) have professional experience in matters relating to investments who fall within the definition of "investment professionals" in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 as amended (the "FPO") or fall within the definition of "high net worth companies, unincorporated associations etc." in article 49(2)(a) to (d) of the FPO and (ii) are "qualified investors" as defined in section 86 of FSMA or (C) otherwise to persons to whom it may otherwise lawfully be communicated (each, a "Relevant Person"). No other person should act or rely on this announcement and persons distributing this announcement must satisfy themselves that it is lawful to do so. By accepting the terms of this announcement, you represent and agree that you are a Relevant Person.

Persons (including, without limitation, nominees and trustees) who have a contractual or other legal obligation to forward a copy of this announcement should seek appropriate advice before taking any action.

Certain statements in this announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as "aim", "anticipate", "believe", "intend", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries in which the Company's businesses operate to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by the FCA, the London Stock Exchange or applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Any indication in this announcement of the price at which the ordinary shares of the Company have been bought or sold in the past cannot be relied upon as a guide to future performance. Persons needing advice should consult an independent financial adviser. No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company.

Canaccord Genuity, which is authorised and regulated in the United Kingdom by the FCA, is acting for Amino and for no one else in connection with the Placing and will not be responsible to anyone other than Amino for providing the protections afforded to clients of Canaccord Genuity or for affording advice in relation to the Placing, or any other matters referred to herein.

finnCap, which is authorised and regulated in the United Kingdom by the FCA, is acting for Amino and for no one else in connection with the Placing and will not be responsible to anyone other than Amino for providing the protections afforded to clients of finnCap or for affording advice in relation to the Placing, or any other matters referred to herein.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into, or forms part of, this announcement.

For full details of this announcement please visit our investor site which can be accessed via the Investor tab in the navigation bar at the top of the home page of this website.