R4E.L Regulatory News (R4E)

11 Jul 2006 07:10

11 July 2006 First Artist Corporation plc ("First Artist" or the "Company") ACQUISITIONS OF PROACTIVE SCANDINAVIA A/S AND N.C.I. MANAGEMENT LIMITED AND PLACING OF NEW ORDINARY SHARES TO RAISE APPROXIMATELY ‚£1.0 MILLION First Artist Corporation plc (AIM: FAN), the acquisitive sports andentertainment group, announces the acquisitions (conditional in one case on thecompletion of a placing by the Company) of Proactive Scandinavia A/s("Proactive Scandinavia") from Formation Group plc (AIM:FRM) ("Formation") for‚£1.75 million plus both the net asset value of Proactive Scandinavia as at 31May 2006, estimated to be approximately ‚£250,000 to be paid in cash oncompletion and ‚£250,000 payable in 2 instalments to Karsten Aarbrink, ProactiveScandinavia's continuing executive director (the "Proactive Acquisition") andN.C.I. Management Limited ("NCI") from Nicola Ibison for a maximumconsideration of ‚£1.75 million (the "NCI Acquisition"), together (the"Acquisitions").In addition, the Company announces today the placing of 16,758,334 new ordinaryshares of 0.25 pence each in the share capital of the Company (the "PlacingShares") by Arbuthnot Securities Limited with institutional and other investors(including certain executive directors of the Company) at a price of 6 penceper Placing Share to raise approximately ‚£1.0 million before expenses (the"Placing"). The Placing Shares represent approximately 18.7 per cent. of theexisting issued share capital of the Company. The net proceeds of the Placingwill be used for the Acquisitions and for working capital purposes. The balanceof the cash consideration payable for the Acquisitions will be financed fromnew banking facilities.The Board anticipates that each of the Acquisitions will be earnings enhancingimmediately.Proactive ScandinaviaProactive Scandinavia is an established football management agency based inCopenhagen, Denmark and is currently owned by Formation. Proactive Scandinaviahas 13 staff with offices in Denmark and Norway, a presence in Portugal andalso operates in Germany, Holland, Sweden and Belgium. It has 8 registeredfootball agents, representing over 90 players in both the UK and across Europeincluding Thomas Gravesen and Claus Jensen. In the year to 31 August 2005,Proactive Scandinavia reported audited turnover of approximately ‚£1.6millionand operating profit of approximately ‚£0.3 million. As at 31 August 2005,Proactive Scandinavia had net assets of approximately ‚£0.5 million.The Proactive Acquisition will expand the Company's existing football agencybusinesses, provide it with a North European base and strengthen First Artist'sposition as a leading force in the European football market. On completion ofthe Proactive Acquisition, the Company will pay ‚£1.75 million in cash toFormation and, in addition, will pay ‚£150,000 in cash to Karsten Aabrink with afurther ‚£100,000 being payable by the Company to him on the first anniversaryof completion. Karsten Aabrink has agreed a new two year service contract,subject to termination by 12 months' notice thereafter. It is intended thatProactive Scandinavia will be re-named First Artist Scandinavia A/S followingcompletion.On completion of the Proactive Acquisition, the Company will pay to Formationapproximately ‚£130,000 being equal to a sum advanced by Formation to ProactiveScandinavia.NCINCI is one of the UK's leading entertainment agencies. It was established byformer GMTV producer Nicola Ibison in 1997 and currently represents over 50 TVpresenters and journalists. Based in central London with 7 employees, NCI is afull service agency handling, book deals, PR and radio. In the year to 31 March2006, NCI reported turnover of ‚£0.73 million and operating profit of ‚£0.37million. As at 31 March 2006, NCI had net assets of approximately ‚£0.13million.NCI will complement First Artist's existing Entertainment Division led byCorinne Goodall to create one entertainment agency with approximately 100clients (as at completion) having a particular strength in brokering deals forTV presenters. Other members of the First Artist group are expected to benefitfrom the NCI Acquisition as it is expected to create opportunities both for itsexisting events division, The Finishing Touch (Corporate Events) Limited, andits financial advisory business, ABG Financial Management Limited, whichspecialises in providing financial advice to celebrities, professionalsportspeople and other high net worth individuals. Nicola Ibison will becomeManaging Director of First Artist's combined entertainment division withCorinne Goodall becoming Deputy Managing Director.The consideration payable by the Company in respect of the NCI Acquisition willbe settled by the aggregate of the following (subject to a maximumconsideration payable of ‚£1.75 million): * initial cash consideration of ‚£650,000; * an amount equal to NCI's net assets on completion (forecast to be approximately ‚£210,000), payable in cash; * by the issue by the Company to Nicola Ibison of 500,000 new ordinary shares of 0.25 pence each in the capital of the Company ("Ordinary Shares") at a deemed rate of 10 pence per share, representing approximately 0.5 per cent. of the Company's existing issued share capital (the "Acquisition Shares"); * further payments to be satisfied by a combination of unsecured loan notes and the allotment of Ordinary Shares, depending on the combined NCI/First Artist existing Entertainment Division achieving certain performance targets in each of the next three years. Under the Placing, Jon Smith (Chief Executive), Richard Hughes (FinanceDirector), Phil Smith (Executive Director) and Vincenzo Morabito (ExecutiveDirector) have each conditionally subscribed for 166,667 Placing Shares at thePlacing Price. On completion of the Placing, Jon Smith will hold 11,610,110Ordinary Shares, representing 10.88 per cent. of the Company's enlargedordinary share capital following Admission, Richard Hughes will hold 900,000Ordinary Shares, representing 0.84 per cent. of the Company's enlarged ordinaryshare capital following Admission, Phil Smith will hold 8,219,089 OrdinaryShares, representing 7.70 per cent. of the Company's enlarged ordinary sharecapital following Admission, and Vincenzo Morabito will hold 8,219,090 OrdinaryShares, representing 7.70 per cent. of the Company's enlarged ordinary sharecapital following Admission.Application has been made to the London Stock Exchange for the AcquisitionShares and the Placing Shares (together the "New Ordinary Shares") to beadmitted to trading on the Alternative Investment Market of the London StockExchange ("AIM"). The New Ordinary Shares will rank pari passu with theexisting Ordinary Shares. The Placing is conditional, inter alia, on theadmission of the New Ordinary Shares to AIM becoming effective ("Admission"),which is expected to occur on 14 July 2006, when dealings in the New OrdinaryShares are expected to commence. Following Admission, the Company will have106,700,571 Ordinary Shares in issue.Commenting on the Acquisitions and the Placing, Jon Smith, Chief Executive ofFirst Artist, said,"We are pleased to be delivering on our declared strategy of acquiringcomplementary businesses that strengthen the Group's position in the sports andentertainment arenas. The Acquisitions expand significantly our position inboth the football agency and celebrity representation industries. We now lookforward to the two-way flow of opportunities across our celebrityrepresentation, sports representation, event management and wealth managementdivisions as a result of the Acquisitions. We will continue to identify andacquire relevant businesses as they present themselves."Furthermore, we are delighted with the success of the Placing and we welcomeour new investors and thank our existing shareholders for their continuedsupport."For further information please contact:First Artist Corporation plc 020 8900 1818Jon Smith, Chief ExecutiveRichard Hughes, Finance DirectorArbuthnot Securities 020 7012 2000Tom Griffiths/Andrew Fullertongth media relationsToby Hall/Jade Mamarbachi 020 7153 8039/8035ENDFIRST ARTIST CORPORATION PLC