REG - Advancedadvt Limited - Update on Cancellation of Listing

AdvancedAdvTAnnouncement

05/12/2023 07:00

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RNS Number : 6296V  Advancedadvt Limited  05 December 2023

5 December 2023

 

AdvancedAdvT Limited

 

Proposed cancellation of the Company's Ordinary Shares from the Official List
and proposed admission to trading on AIM

 

AdvancedAdvT Limited (LSE: ADVT, the "Company") intends to request the
Financial Conduct Authority ("FCA") to cancel the standard listing of the
ordinary shares of the Company (the "Shares") on the Official List and to
request the London Stock Exchange to cancel the admission to trading of the
Shares on the main market (the "Cancellation").

 

The Company will apply for the admission of the Shares to trading on the AIM
market ("AIM") of the London Stock Exchange ("Admission"), such that
Cancellation and Admission will take place simultaneously.

 

Vin Murria, AdvancedAdvT's Executive Chairperson, said

 

"We are switching our listing to AIM and expect to have our shares trading
again on 10 January 2024.  AIM provides a more suitable regulatory
environment for a business of our size and structure as well as offering
flexibility with regard to corporate transactions, and will provide access to
a broader pool of institutional and other investors.

 

"The management's experience, expertise and proven track record, together with
£95m of cash and assets plus supportive shareholders, position us extremely
well to execute on our growth strategy in a rapidly growing and evolving AI
and digitally led landscape.

 

"We recently acquired four businesses with notably strong recurring revenues
and have created an initial platform on which we can rapidly scale, innovate
and build both organically and inorganically.

 

"Our two platforms, business/data and compliance solutions and human capital
management platforms, provide us with a strong and solid foundation to
capitalise on the anticipated rapid market growth and increasing AI, digital
transformation, data analytics and business intelligence requirements across
these sectors, whilst also expanding our presence in adjacent markets,
geographies and digital sectors.

 

"Forecasts indicate that the business solutions, human capital management and
digital transformation markets are anticipated to experience double-digit
growth rates extending through 2030."

 

Core specialisms

 

On 31 July 2023, the Company completed the acquisition of five software
businesses from Capita plc for a combined enterprise value of approximately
£33 million in cash.

 

In the year ended 31 December 2022, these businesses generated a total revenue
of approximately £35 million, with approximately 74 per cent. of the revenue
being recurring or from Software-as-a-Service (SaaS).

 

Four of these businesses operate across two fundamental business
transformational areas: business/data and compliance, and human capital
management. Through these core specialisms, the Company delivers innovative
software solutions and a platform that enables businesses and organisations to
succeed in today's dynamic landscape whilst providing an enabler for,
Artificial Intelligence ("AI"), digital transformation, data analytics and
business intelligence.

 

·    Business Solutions (Integrated Business Software and Solutions
Limited): provision of financial management software solutions and services.
Innovative software solutions allows organisations to achieve their financial
and e-Business strategies by driving transformational changes.

 

Its solutions can be hosted in both the private and public cloud and are
trusted by more than 150 public, health and private organisations in the UK
and Ireland. The use of AI, digital transformation, data analytics and
business intelligence software are expected to be highly valuable to these
markets.

 

·    Data&Compliance (CHKS Limited): one of the leading providers of
AI driven healthcare intelligence compliance and benchmarking software to
address the governance, risk and compliance needs of its healthcare customers.

 

Its UK based tech-enabled solutions of accreditation, benchmarking and coding
services play a role in transforming healthcare services, knowledge sharing
and best practice to the healthcare industry globally.

 

·    Human Capital Management (Retain International Software Limited):
an industry leading global AI centric resource planning and talent management
software and service provider. Its solutions integrate with leading enterprise
resource planning systems and are trusted by some of the largest global
consultancies to deliver effective management and allocation of resources;
optimise utilisation and productivity, and enable efficient cost management,
financial and staff planning tasks.

 

·    Human Capital Management (Workforce Management Software Limited): a
workforce management software provider, with well-established UK presence and
embedded relationships across 300+ clients. Its ability to handle highly
complex payroll calculations delivering a gross number through it
comprehensive time and attendance and access control solutions provide
real-time employee tracking with tangible efficiency benefits.

 

On 21 November 2023, the Company entered into an agreement for the sale of
Synaptic Software Ltd ("Synaptic"), one of the five businesses acquired from
Capita plc, to Fintel IQ Limited (the "Disposal") in order to enable the
business to have a more strategically aligned owner. Synaptic provides a
technology solution platform with research and compliance tools for the retail
financial sector. The Disposal and receipt of the net £3.5 million cash
consideration is conditional upon, inter alia, the approval of the change of
ownership by the FCA.

 

Strategy

 

The Group's strategy is centred around backing sectors characterised by long
term AI, digital transformation, data analytics and business intelligence
trends, that are in early stages of adoption and set to transform the
workplace for professionals for the next few decades.

 

Embracing a long-term perspective, the aim is to build a lasting and thriving
business. This thinking shapes how investment is deployed on both M&A and
within the platform businesses, in order to develop relationships with clients
and partners and with a strategy centred around business and digital
transformation and continuous improvement.

 

This strategy revolves around evaluating high-quality businesses in the
pipeline, based on a set of key characteristics. These characteristics align
with the management team's vision and will enable businesses to consistently
generate long-term value. The Company seeks businesses with:

·    high recurring revenue streams and good forward visibility;

·    sticky customer retention;

·    mission critical products and services;

·    sectors with high barriers to entry;

·    opportunities for both organic and inorganic growth;

·    strong cash generation; and

·    highly fragmented industries with opportunities for consolidation.

 

The Directors believe that the acquisitions embody these characteristics and
offer opportunities to expand the product offerings to deliver against their
existing and future client needs and an opportunity to build on digitisation
trends.

 

The Company will continue in its pursuit of opportunities where a blend of
management expertise, enhanced operational performance, increased investment
capital, and a targeted approach to acquisitions can enable growth and value
creation for stakeholders. Growth opportunities may manifest within the
existing acquired businesses or potential target businesses and their core
markets, new territories and adjacent sectors.

 

Financing resources

 

As of 30 November 2023, the Company has approximately £78 million of cash
available to fund further acquisitions, investment and working capital. The
Company will receive additional cash proceeds following completion of the
Disposal, conditional upon, inter alia, the approval of the change of
ownership by the FCA.

 

Management's track record

 

The Directors have significant experience executing transactions using listed
acquisition vehicles on the London Stock Exchange and have successfully
completed a vast array of M&A transactions on and off London's capital
markets.  The Company plans to strengthen the Board at the time of the
Admission.

 

The management team boasts substantial experience in the software and services
sector, having invested in and operated a range of high-performing businesses.
The team have successfully driven operational excellence within these
enterprises, leading to consistent organic growth. Moreover, it has a proven
track record of targeted and accretive mergers and acquisitions in the
software sector.

 

Market opportunity

 

The use of AI, digital transformation, data analytics and business
intelligence.

 

Across all sectors, businesses have increasingly embraced or are embracing AI
and digitalisation to optimise their insights, processes, operations, and
engagement. Implementing these technologies and developing a digital
transformation strategy is vital for businesses pursuing growth, efficiency,
and long-term success. Sectors and businesses with the highest level of AI and
digitalisation tools have significant opportunity for productivity growth.

 

While the potential of digital transformation and use of AI and digitalisation
tools is now recognised, the adoption of new AI and digital strategies by
businesses and consumers was, until recently, somewhat limited by various
barriers, including companies' willingness to invest in and embrace these
technologies. However, the global restrictions imposed by the Covid-19
pandemic have shattered these barriers and compelled businesses to become more
agile, resulting in a remarkable acceleration of digital transformation.

 

Despite cost-cutting measures implemented due to the pandemic, organisations
have increased their spending on digital transformation as they rapidly adapt
their business models. Harnessing technology has led to the reshaping of
multiple aspects of business operations, from internal processes and workflows
to customer interactions and business models.

 

The Directors believe that the current macroeconomic environment presents a
substantial investment opportunity in companies well-positioned to harness the
structural changes arising from this unprecedented acceleration of AI and
digitalisation.

 

These structural changes have profoundly impacted the way people live, work,
and consume, as well as how businesses operate, engage with customers, and
conduct sales. Consequently, businesses embracing digital transformation,
offering AI and digital solutions, software, and services that enable and
support its strategy are expected to experience sustained demand for their
products.

 

Background

 

The Company was formed on 31 July 2020 for the purpose of effecting a merger,
share exchange, asset acquisition, share or debt purchase, reorganisation or
similar business combination with one or more businesses.  The Company was
admitted to trading on the standard listing segment of the Official List of
the London Stock Exchange on 4 December 2020.

 

The Company's objective is to generate attractive long-term returns for
shareholders and to enhance value by supporting sustainable organic growth,
acquisitions and other performance improvements within the acquired companies.

 

On 5 January 2022, the Company made an investment in M&C Saatchi in
contemplation of a proposed merger, purchasing 12 million ordinary shares in
M&C Saatchi for a price of £2 per share. The executive chairperson of the
Company, Vin Murria OBE, owned 15,237,985 ordinary shares in M&C Saatchi
and was at the time a non-executive director on its board. This resulted in
the combined holdings of Vin Murria OBE and the Company representing
approximately 22.3 per cent. of the issued share capital of M&C Saatchi.
On 17 May 2022, the Company announced its firm intention to make an offer for
M&C Saatchi by way of a contractual offer.

 

On 14 June 2022, the Company published the final offer document in respect of
the final offer for the issued and to be issued share capital of M&C
Saatchi not already owned by the Company. After a prolonged process, the
Company announced on 30 September 2022 that it had not received sufficient
acceptances and the final offer lapsed.

 

Cancellation and Admission

 

Pursuant to Listing Rule 5.2.8, the Company is required to give at least 20
business days' notice of the intended Cancellation. Therefore, it is intended
that the Cancellation will become effective from 8.00 a.m. (London time) on
Wednesday 10 January 2024, such that the last day of trading of the Shares
(with ISIN VGG0103J1075) on the London Stock Exchange would be Tuesday 9
January 2024.

 

Admission is expected to take place, and dealings in Shares are expected to
commence on AIM, at 8.00 a.m. on Wednesday 10 January 2024.

 

Any change to the times and dates mentioned above will be notified to
shareholders by an announcement through a Regulatory Information Service.

 

An AIM Admission Document will be available on the Company's website at
www.advancedadvt.com (http://www.advancedadvt.com) shortly before Admission.

 

Singer Capital Markets Advisory LLP will be appointed Nominated Adviser to the
Company upon Admission.

 

Enquiries:

 

 AdvancedAdvT Limited
 Vin Murria                                 c/o Meare Consulting

 Singer Capital Markets (Broker)            Tel: 020 7496 3000
 Philip Davies / Asha Chotai / Sam Butcher

 KK Advisory (Investor Relations)           Tel: 020 7039 1901
 Kam Bansil

 

 Meare Consulting
 Adrian Duffield     Tel: 07990 858548

 

Further information on the Company can be found on its website at
www.advancedadvt.com (http://www.advancedadvt.com) . Neither the content of
the Company's website, nor the content on any website accessible from
hyperlinks on its website or any other website, is incorporated into, or forms
part of, this announcement nor, unless previously published by means of a
recognised information service, should any such content be relied upon in
reaching a decision as to whether or not to acquire, continue to hold, or
dispose of, securities in the Company.

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