REG - Northcoders Group - Acquisition of Tech Returners and Issue of Equity

NorthcodersAnnouncement

07/02/2023 07:00

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RNS Number : 0841P  Northcoders Group PLC  07 February 2023

7 February 2023

Northcoders Group PLC

('Northcoders' or the 'Group' or 'Company')

 

Acquisition of Tech Returners

Issue of Equity and Total Voting Rights

 

Northcoders (AIM:CODE), an independent provider of training programmes for
software coding, is pleased to announce that it has entered into a conditional
agreement (the 'Acquisition Agreement') to acquire Tech Returners Limited
('Tech Returners'), a leading UK technology re-training business for
senior-level personnel (the 'Acquisition') for a total consideration of
£1.576 million, to be satisfied in cash and shares.  This strategic
Acquisition will further diversify Northcoders' Business Services division,
adding a new income stream to the Group's growing corporate-focused business
model.

 

Founded in 2016, Tech Returners specialises in remote training and placing of
senior level professionals looking to re-enter the workplace in the technology
sector.  The business uses its industry leading knowledge and techniques to
up-skill corporate sponsored individuals or existing corporate teams for large
corporate clients across a number of industries.  Corporate clients have
included global brands such as AutoTrader, BBC, booking.com, checkout.com, The
Guardian, Holiday Extras, Lloyds, On the Beach and the Telegraph.  Tech
Returners is expected to be fully integrated into the Group by Q2-2023 and
will continue to operate under its existing brand.

 

Pursuant to the terms of the Acquisition, the Company has agreed to acquire
the entire equity interest in Tech Returners from Rebecca Ferguson (néeTaylor
) and James Heggs ('the Tech Returners Founders'), for a total consideration
of £1.576 million, to be satisfied in cash and shares.  The initial
consideration of £1.326 million will be satisfied on completion by payment of
£0.326 million ('Cash Consideration') and the issue of 322,580 new ordinary
shares of £0.01 each in the capital of the Company ('Consideration Shares').
 Deferred consideration of £0.25 million is payable twelve months post
Completion in cash ('Deferred Consideration').  Completion of the Acquisition
is conditional on admission to trading of the Consideration Shares
('Admission') which is expected to take place on 8 February 2023.  The Cash
Consideration and Deferred Consideration will be financed through the Group's
existing cash and debt resources.  The Consideration Shares will be issued on
a non-pre-emptive basis utilising the Company's existing shareholder
authorities.  In addition, the Acquisition Agreement contains lock-in
provisions pursuant to which the Tech Returners Founders have agreed that
subject to certain customary exceptions for a period of twelve months from the
date of completion, they shall not transfer or dispose of the Consideration
Shares without the prior permission of the Company and for a further period of
twelve months, the Tech Returners Founders shall only sell, transfer or
dispose of the Consideration Shares through or with the agreement of WH
Ireland.

 

The Tech Returners Founders will join the Northcoders senior leadership team
on completion of the Acquisition and their commitment to staying with the
enlarged group is supported by their willingness to accept the Consideration
Shares.  Rebecca has years of experience as a human resources leader within
the technology sector and James has many years of experience as a chief
technology officer, much of this within the consultancy area, and both will be
a tremendous asset to the Group's Business Services division.

 

In 2019 Rebecca Ferguson founded Reframe Women in Tech, the largest women in
technology conference in the North of England and she will continue to run and
grow Reframe Women in Tech as part of the Northcoders Group.

 

Following the Acquisition, Northcoders will not only benefit from entry into a
new service area, specialising in senior level re-training, but the team of 16
Tech Returners will significantly support the Group in building a significant
presence in key locations such as London.  There is a solid shared cultural
focus on diversity in the technology sector, with over 60% of returners being
women and a strong track record of training ex-Services personnel, refugees
and supporting international disposition.

 

In its last reported results for the year ended 30 November 2021 Tech
Returners reported a profit before tax of £68k on revenues of £565k and had
net assets of approximately £7k.  For the equivalent period to 30 November
2022 management accounts indicated revenues of over £800k and a breakeven
position.  Tech Returners is expected to grow further in 2023 supported by a
strong order book of over £300k and an encouraging levels of new
opportunities.

 

Under Northcoder's ownership, Tech Returners is expected to make a positive
contribution to the Group's performance for the year ending 31 December 2023.

 

Admission

 

Application has been made to the London Stock Exchange for the Consideration
Shares to be admitted to trading on AIM.  It is expected that Admission will
become effective and that dealings in Consideration Shares will commence on
AIM on 8 February 2023.  The Consideration Shares will rank pari passu in all
respects with the existing ordinary shares of £0.01 each in the capital of
the Company ('Ordinary Shares').

 

Total Voting Rights

 

Following Admission, the Company's issued share capital will consist of
8,011,469 Ordinary Shares of which none are held in treasury.  Therefore, the
total number of voting rights in the Company is 8,011,469 and Shareholders may
use this figure as the denominator by which they are required to notify their
interest in, or change to their interest in, the Company under the Disclosure
Guidance and Transparency Rules.

 

Chris Hill, Chief Executive Officer of Northcoders, said: "As demonstrated in
our Interim Results announced last September and also in our recent trading
update issued on 31 January 2023, Northcoders is experiencing record demand as
our reputation as a leading UK technology training provider grows and the
demand for technology-skilled personnel continues to increase.

 

"The UK-wide digital skills shortage is forcing corporates to reassess the
skillsets of their workforces and creating more and more opportunities in the
sector.  The lack of supply to meet this demand is in turn pushing salaries
to record highs and, increasing the attraction for senior level professionals
to retrain as technology engineers.

 

"Tech Returners is a leading technology re-training business in the UK with a
high-quality corporate client list.  We look forward to welcoming their team
into our enlarged Group and look forward to continuing to build on its
existing success."

 

Commenting on the acquisition, Tech Returners' CEO & Co-Founder, Rebecca
Taylor, said: "The combination of both our organisations gives us an increased
opportunity to have a really tangible impact on diversity and inclusion within
the technology industry.  The power of the Group provides opportunities
across different levels and backgrounds for organisations and individuals."

 

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

 

- Ends -

 

For further enquiries:

 Northcoders Group plc                                        Via Buchanan
 Chris Hill, CEO                                              Tel: +44 (0) 20 7466 5000
 Charlotte Prior, CFO                                         www.northcodersgroup.com (http://www.northcodersgroup.com/)

 WH Ireland Limited (Nominated Adviser & Joint Broker)        Tel: +44 (0)20 7220 1666
 Mike Coe / Darshan Patel / Sarah Mather (Corporate Finance)

 

 Peterhouse Capital Limited (Joint Broker)  Tel+44 (0) 20 7496 0930
 Martin Lampshire                           www.peterhousecap.com (http://www.peterhousecap.com/)
 Lucy Williams

Duncan Vasey

 Buchanan Communications                    Tel: +44 (0) 20 7466 5000
 Henry Harrison-Topham                      northcoders@buchanan.uk.com (mailto:northcoders@buchanan.uk.com)
 Jamie Hooper
 George Cleary

Notes to Editors

 

Northcoders is a market leading provider of coding and software development
training for businesses and individuals. Founded in 2015, its business model
operates a hybrid structure with a flagship site in Manchester and other sites
in Leeds, Birmingham and Newcastle supported by a proven digital offering to
support its students across the UK.

 

Powered by IP rich technology, Northcoders' coding school offers boot camp
courses to individuals from a range of backgrounds, delivered through virtual
and physical learning.  The Group also works with blue chip corporates across
multiple sectors to supply innovative EdTech solutions for the upskilling and
reskilling of employees, and is also a registered provider of
government-backed apprenticeships in the field.

 

With a keen focus of inclusivity, diversity and quality at its core,
Northcoders aims to address the digital skills gap in the UK to meet the
increasing demand for digital specialists from businesses and public agencies.
 It operates in a significant and growing market with structural growth
trends further accelerated by Covid-19.

 

Northcoders was admitted to trading on AIM in July 2021 with the ticker
CODE.L.  For additional information please visit www.northcodersgroup.com
(https://www.northcodersgroup.com/) .

 

About Tech Returners: www.techreturners.com (https://www.techreturners.com/)

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