RM plc (RM.) RM plc: Proposed sale of the RM Integris and RM
Finance Business 28-Nov-2022 / 07:00 GMT/BST Dissemination of a
Regulatory Announcement, transmitted by EQS Group. The issuer is
solely responsible for the content of this announcement.
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This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/ 2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("UK MAR"), and is disclosed in accordance
with the Company's obligations under Article 17 of UK MAR. Upon the
publication of this announcement via a Regulatory Information
Service, this inside information is now considered to be in the
public domain. The person responsible for making this disclosure on
behalf of the Company is Mark Lagler, Group General Counsel and
Company Secretary of the Company.
28 November 2022
RM plc Proposed sale of the RM Integris and RM Finance
Business
Continuation of RM's transformation strategy
Cash proceeds intended to reduce debt and strengthen the balance
sheet
RM plc, a leading supplier of technology and resources to the
education sector (LSE: RM) ("RM", the "Company" or, together with
its subsidiary undertakings, the "Group"), today announces that it
has conditionally agreed to sell the RM Integris and RM Finance
Business and related assets of its principal trading subsidiary, RM
Education Limited ( "RMEL"), (the "RM Integris and RM Finance
Business") to The Key Support Services Limited ("The Key").
Total consideration for the Sale, which will constitute a Class
1 transaction, will be up to GBP16.0 million in cash on a
cash-free/debt-free basis and subject to customary normalised
working capital adjustments (the "Sale"). This agreement follows
the strategic review outlined earlier this year. Completion of the
Sale ("Completion") is expected to take place during the first half
of 2023.
Highlights:
-- Sale of the RM Integris and RM Finance Business to The Key
for a consideration of up to GBP16.0 million incash.
-- Initial consideration of GBP12.0 million in cash will be paid
on completion, adjusted to reflect thenormalised working capital
position of the RM Integris and RM Finance Business.
-- The remaining consideration will be paid in cash subject to
the satisfaction of certain conditions,including those relating to
competition clearance.
-- The net proceeds of the Sale will be used to reduce Group
indebtedness and strengthen its balance sheet.
-- The Sale executes against the previously outlined strategy to
restructure the RM Technology Division andto refocus its strategy
on its core Managed Services business.
-- The Sale constitutes a Class 1 transaction under the Listing
Rules of the Financial Conduct Authority(the "FCA"), (the "Listing
Rules") and is therefore conditional upon, amongst other things,
shareholder approval.
Neil Martin, Chief Executive Officer of RM plc, commented:
"This Sale allows RM to better focus our resources and efforts
within RM Technology to take greater advantage of the market
opportunity presented by the growth in larger school groups and the
increasing use of technology. In addition to its strategic
importance, the net proceeds of the Sale will reduce our debt
levels across the Group, thereby supporting our transformation
strategy to deliver long term value for our stakeholders.
"RM Integris and RM Finance are both good products and will be
well placed to develop as part of The Key, which we believe is a
good outcome for our customers, employees, and other stakeholders.
We thank all our employees for their excellent work, especially
those in the RM Integris and RM Finance Business."
Enquiries:
RM plc
Neil Martin, Chief Executive Officer Tel: +44 (0)1235 401 805
Emmanuel Walter, Chief Financial Officer (interim) investorrelations@rm.com
Cynthia Alers, Investor Relations Director (interim)
Headland Consultancy Tel: +44 (0)203 805 4822
Stephen Malthouse smalthouse@headlandconsultancy.com
Jemma Savage
Notes to Editors:
RM plc is a leading supplier to the international education
sector, with a turnover of GBP211m and approximately 2,000
employees globally. Established in 1973, RM provides market-leading
products and services to educational institutions, exam bodies and
international governments which improve, simplify and support
education and learning. The education sector is transforming, and
RM is well positioned to capitalise on this through its three
divisions:
-- RM Resources, an established provider of education resources
for early years, primary schools, andsecondary schools across the
UK and to eighty countries internationally.
-- RM Assessment, a leading provider of assessment software,
supporting exam awarding bodies, universities,and governments
worldwide to digitise their assessment delivery.
-- RM Technology, a market-leading supplier of ICT software,
technology and services to UK schools andcolleges.
Further Information on the Sale 1. Background to, and reasons
for, the Sale
Technology is playing an ever-greater role in education - from
the classroom to the way schools and trusts are managed. Schools
and trusts are asking for more advice, guidance, and support to
realise the benefits that technology can bring. RM's expertise in
the education sector and its national scale mean it can deliver
value for customers in this market by being a platform-led managed
services company.
The continued conversion to Academy status and the growth of
Multi-Academy Trusts are changing the landscape of English schools.
RM's target customers are mid-sized Multi-Academy Trusts, which it
expects will make up most of the market within the next few years.
In contrast, RM Integris and RM Finance are popular with
single-site primary schools, and the product is not developed to
meet the growing requirements of the Group's target Multi-Academy
Trust customers. The Sale of the RM Integris and RM Finance
Business is a strategic decision to enable the Group to focus on
meeting the growing demand from its target customer base. It is
part of the wider restructure of the RM Technology business, as set
out in the Group's transformation plan announced in February 2022.
2. Principal terms of the Sale
The Sale Agreement
The Company (as guarantor), RMEL and The Key have entered into a
sale and purchase agreement (the "Sale Agreement") pursuant to
which RMEL has conditionally agreed to sell the entire issued share
capital of a newly incorporated, wholly owned subsidiary of RMEL,
Schools Educational Software Limited ("Newco"), to The Key.
Newco will acquire the RM Integris and RM Finance Business as
part of the hive-down transaction prior to Completion.
The initial consideration payable under the Sale Agreement is
GBP12.0 million in cash (the "Initial Consideration"). The Initial
Consideration will be paid on a cash-free/debt-free basis and
adjusted to reflect the normalised working capital position of the
RM Integris and RM Finance Business.
The total consideration will increase by up to an additional
GBP4.0 million (the "Additional Consideration") to GBP16.0 million
subject to satisfaction of certain conditions, including those
related to competition clearance. This includes deferred cash
consideration of GBP550,000, which will be payable subject to set
thresholds relating to hosting uptime and assistance in transfer of
services from RM's India subsidiary.
If the Additional Consideration is not payable, but The Key
divests Newco (or all, or substantially all, of its business and
assets) within a defined period following Completion a divestment
fee of up to GBP4.0 million will be payable to RMEL subject to
certain conditions being met.
The Sale Agreement contains certain warranties, undertakings,
covenants, and indemnities from RMEL to The Key in respect of the
RM Integris and RM Finance Business which are in a customary form
for such a transaction.
The Sale constitutes a Class 1 transaction under the Listing
Rules and, as such, the Sale Agreement is conditional upon the
approval of the Company's shareholders in a general meeting (the
"General Meeting"). A Class 1 circular (the "Circular") which is
required to be approved by the FCA, containing, amongst other
things, further details of the Sale, the Company's board of
directors' (the "Board") recommendation to vote in favour of the
resolution approving the Sale (the "Resolution") and the notice
convening the General Meeting will be published by the Company in
due course and will be available for inspection at
https://www.rmplc.com/announcements in due course.
In the event that the Resolution is not approved by shareholders
at the General Meeting on or before the date falling 12 months from
the date of the Sale Agreement (the "Longstop Date") and Completion
does not occur, the Company has agreed to pay The Key a break fee
of GBP343,887 in cash.
Further details of the Sale Agreement will be set out in the
Circular.
The TSA
Prior to Completion, RMEL and Newco will also enter into a
transitional services agreement (the "TSA"). The services under the
TSA will generally be provided for up to one year following
Completion.
Further details of the TSA will be set out in the Circular. 3.
Information on the RM Integris and RM Finance Business RM Integris
is a leading school management information system in England.
Flexible and easy-to-use, RM Integris is designed to give teachers
and administration staff the tools they need for flexible,
efficient working. RM Finance is a financial management system for
administering school finances and budgeting. Together, this
business has approximately 3,000 customers. 4. Information on the
continuing Group
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