REG - Sivota PLC - Conditional Acquisition of Stake in Apester

SivotaAnnouncement

25/01/2022 07:05

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RNS Number : 4557Z  Sivota PLC  25 January 2022

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE
UK ‎VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF
ENGLISH LAW ‎BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS
AMENDED.  ‎ UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA REGULATORY
INFORMATION SERVICE, THIS INSIDE INFORMATION IS ‎NOW CONSIDERED TO BE IN
THE PUBLIC DOMAIN

 

25 January 2022

 

SIVOTA PLC

 

("Sivota," or the "Company")

 

Conditional Acquisition of Majority Stake in Apester

 

Further to its announcement of 7 December 2021, Sivota, the special
opportunities investment vehicle focused on "under the radar" Israeli
technology-related companies, announces it has entered into a conditional
share purchase agreement with Apester, a digital marketing engagement
platform, (the "Transaction") to acquire a majority stake in the business (the
"SPA").

 

Sivota is a platform which leverages the significant technology investment
potential between the UK and Israel, identifying unique opportunities and then
leveraging the Company's experience to introduce change and growth.

 

Apester will be Sivota's first acquisition, and is closely aligned with
Sivota's strategic principals. Sivota is keen to leverage Apester's existing
assets whilst applying forward thinking leadership and insight in order to
increase value for the Company's investors over time

 

About Apester

 

Apester is a digital experience end-to-end software platform that enables
brands to engage and understand customers across all digital media channels,
in turn increasing lead generation, brand uplift, conversion and sales for its
customers.

 

Developed over seven years and with c. $36 million invested in its technology
to-date, Apester employs 35 people worldwide, generated revenues of $9.2
million(1) in 2021 (2020: $7.2 million), and services c. 143 global customers
including renowned brands such as CNN, RollingStone, The Independent, IKEA,
Australian Football League and more.

 

Apester facilitates businesses to better understand their customers across all
digital channels including websites, apps and social media. Its platform
provides tools to create a range of personalised interactive experiences and
applications, including customer surveys, mobile landing pages, onboarding
forms, interactive videos, polls, quizzes, custom applications and web
stories.

 

Apester's suite of software applications also includes a Data Management
Platform that allows customers to collect, store and 'own' Zero Party and
First-Party engagement data generated from experiences and applications
created on Apester while adhering to compliance and privacy regulations. AI
analytics help to create valuable insight into customer trends, sentiment and
preferences, enabling brands and publishers to better understand their
customers and to accelerate their business performance.

 

The Digital Experience Platform (DXP) market size is projected to reach $43.43
billion by 2028, growing at a CAGR of 13.4% from 2021 to 2028(2). This growth
is underpinned by key trends including the acceleration of the digital economy
as a result of Covid-19 and customers increasingly wanting to maximise
engagement to deliver meaningful ROI. Apester's self-serve, scalable and
customer-friendly platform is well-placed to capitalise on this significant
market growth.

 

Following completion of the Transaction, Sivota will focus on the following
key growth priorities:

 

·    Market focus and client segmentation: concentrate on small- to
medium-sized brands/e-commerce businesses and publishers; and identify
potential customers with business cases similar to proven case studies

 

·    Sales and marketing capabilities: align sales and marketing teams to
drive change

 

·    Enhance self-serve platform: continued development of the technology

 

·    Business model: shift focus from usage-based model to a SaaS business

 

·    Financial model management: setting new financial plans and KPIs;
tight control over ROI, cash flow and models

 

·    Operational processes: optimise delivery processes to improve margins
with existing clients and scale capabilities

 

Ziv Ben-Barouch, Chief Executive Officer of Sivota, commented:

 

"We believe Apester ideally fits our profile of investing in overlooked, high
potential technology-backed businesses. The strength of Apester's technology
stack and the marketplace within which it operates, coupled with our own track
record in value creation represents a significant growth opportunity.

 

"We look forward to providing further updates as we implement our strategy for
Apester, alongside broadening our investment portfolio."

 

About the Transaction

 

The SPA is conditional upon, inter alia, the completion of a placing by
Sivota, publication of a prospectus approved by the Financial Conduct
Authority ("FCA") and readmission of Sivota's enlarged issued share capital to
trading on the Main Market of the London Stock Exchange ("Readmission").  In
addition, Sivota is required to obtain shareholder authorities to enable the
completion of the placing and an announcement regarding the general meeting
will be made shortly.  The Company has submitted a draft prospectus to the
FCA for review.

 

On completion of the SPA, the Company will receive 14,947,409 Preferred Seed
Shares in the capital of Apester for an aggregate price of US $12 million.
This reflects a pre-money valuation of Apester of $16 million on a fully
diluted basis.  The issue of the Preferred Seed Shares will provide the
Company with 57.5 per cent. of Apester's voting rights.  The investment
proceeds are to be used by Apester for its working capital requirements as set
out in its business plan and budget as well as for specific repayment of
certain liabilities agreed by Sivota as set out in the SPA.

 

The SPA sets out various representations and warranties from Apester in favour
of the Company, including without limitation, its business and assets its
contracts and trading, its compliance with laws, and its employees.  In
addition, Apester and its founders have agreed to indemnify the Company
against any losses resulting from, arising out of, in connection with a breach
of, or any misrepresentations in, the agreement. The liability of Apester is
limited to the aggregate amount invested by the Company.  Apester has also
agreed to run Apester in the ordinary course of business to completion.

 

Conditional upon completion of the Transaction, Apester has agreed to
contribute up to USD 420,000 for the Company's legal and other fees in
connection with the Transaction.

 

Sivota and Apester have also agreed to enter into a Management Services
Agreement To take  effect from Readmission, which will sets out the terms on
which Sivota shall provide certain management services to Apester and the
related annual fee, calculated as 2 per cent. of the total investment made by
Sivota into Apester.  The agreement will continue for up to five years from
Readmission.

 

Further, Sivota has been granted certain veto and consent rights, conditional
on completion of the Transaction  pursuant to the amended and restated
articles of association  of Apester. In particular, Sivota will be granted
the right to appoint a majority of directors to the Apester Board of
Directors, which it intends to exercise immediately following completion

 

In addition, Sivota has entered into two conditional convertible loan
assignment agreements with lenders to Apester, pursuant to which $1,575,000 in
convertible loan (plus interest) will be assigned to Sivota, for consideration
equal to the aggregate outstanding principal and interest accrued until the
date of completion of the Transaction. The assignment agreements are subject
to completion of the Transaction.   Sivota has renegotiated the terms of the
underlying convertible loans with Apester and following the completion of the
Transaction, the convertible loans will bear interest at a rate of 6% per
annum and will be capable of conversion by Sivota into Preferred Seed Shares
in Apester.  If converted in full, the Preferred Seed Shares would represent
immediately after the completion of the Transaction approximately 5.6 per cent
of Apester's share capital on a fully diluted basis. If the convertible loans
are not so converted, Apester will be required to repay all outstanding
principal and interest on the loans in full in 24 monthly instalments starting
February 2024 .

 

Further announcements will be made in due course.

 

(1) Unaudited

(2)
https://www.prnewswire.com/news-releases/digital-experience-platform-market-size-worth--43-43-billion-globally-by-2028-at-13-4-cagr-verified-market-research-301432876.html

 

Enquiries:

 

 Sivota PLC                                 via Vigo Consulting

 Tim Weller, Non-Executive Chairman

 Ziv Ben-Barouch, Chief Executive Officer

 Canaccord Genuity Limited                  + 44 (0) 20 7523 8000

 Alex Aylen - Head of Equities

 Vigo Consulting                            + 44 (0)20 7390 0230

 Jeremy Garcia / Antonia Pollock

 

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