NetDimensions : Proposed Recommended Cash Offer For NetDimensions

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED TO CONSTITUTE INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) NO. 596/2014. UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

FOR IMMEDIATE RELEASE 3 February 2017

PROPOSED RECOMMENDED CASH OFFER
by
LEARNING TECHNOLOGIES GROUP PLC
for
NETDIMENSIONS (HOLDINGS) LIMITED

1. Introduction

The board of Directors of Learning Technologies Group plc ('LTG'), the integrated e-learning services and technologies provider, is pleased to announce that it has reached agreement with the board of NetDimensions (Holdings) Limited ('NetDimensions'), the integrated enterprise talent management software platform provider, on the terms of a proposed recommended all cash offer for the entire issued and to be issued share capital of NetDimensions ('Offer').

The sources and bases of information contained in this announcement are set out in Appendix II to this announcement and the definitions of certain expressions used in this announcement are set out in Appendix IV to this announcement.

2. The Offer

Under the terms of the Offer, NetDimensions Shareholders will be entitled to receive:

for each NetDimensions Share 100 pence in cash ('Offer Price')

The Offer Price represents a premium of approximately:

• 27.4 per cent. to the Closing Price of 78.5 pence per NetDimensions Share on the Latest Practicable Date;
• 118.6 per cent. to the Closing Price of 45.75 pence per NetDimensions Share on 4 October 2016, being the last Business Day prior to the announcement by NetDimensions of an unsolicited approach regarding a potential transaction; and
• 29.9 per cent. to the volume weighted average Closing Price of 77 pence per NetDimensions Share for the 30 trading days ended on the Latest Practicable Date.

The entitlement to receive the Offer Price under the terms of the Offer values the Offer at approximately £53.6 million (on a fully diluted basis assuming a cash buy-out or cashless exercise of the outstanding 'in the money' options over NetDimensions Shares).
The Offer is conditional upon completion of the Placing, with the balance of the Offer to be funded by a £5 million facility from LTG's Chairman Andrew Brode and the remainder by a £3.5 million overdraft from Barclays Bank PLC. The Offer is also conditional upon the consent of Barclays Bank PLC and, inter alia, LTG not being in breach of its existing banking facilities with Barclays Bank PLC.

3. Background to and reasons for the Offer

LTG believes that NetDimensions is a strong strategic fit and that NetDimensions' track record and high levels of client service will be complementary to LTG's existing platforms and provide numerous operational and financial benefits. LTG anticipates delivering run-rate EBITDA margin of at least 30 per cent. on NetDimensions' revenue by the end of 2017 which will make the acquisition significantly earnings accretive in the 2018 financial year.

LTG believes that the Offer represents an attractive opportunity to:

• complete the range of capabilities required for a full service offering;
• expand its geographic reach, particularly in the Asia Pacific region;
• deepen its expertise in highly regulated sectors such as financial services, defence and security and government and support ambition in the pharma/health, energy and aviation sectors;
• extend its partner-base;

• achieve savings of approximately $8 million per annum (before tax) across the combined businesses from, inter alia, synergies, elimination of duplicate listing costs, greater buying power, reduction in sales and marketing costs and improved utilisation of chargeable staff. Non recurring costs of up to $1 million will be incurred in 2017 to deliver these benefits; and

• take the LTG Group to a more than £50 million revenue business with approximately 44 per cent. recurring revenue on a pro forma basis.

4. Information on LTG

LTG was listed on AIM in 2013 to provide a comprehensive and integrated range of e-learning services and technologies to corporate and government clients. LTG's businesses are at the forefront of innovation and best-practice in the learning technology sector, and have received numerous awards for their performance. LTG has grown organically through gains in market share and sector growth, augmented with acquisition of complementary businesses. The ambition is to grow through strategic acquisition and diversification, with the objective of providing a truly exceptional portfolio of services and products for our existing and new clients across the globe.

5. Information on NetDimensions

NetDimensions was established in 1999 and is a global enterprise solutions provider of talent and learning management systems. NetDimensions provides companies, government agencies, and other organisations with talent management solutions to personalise learning, share knowledge, enhance performance, foster collaboration, and manage compliance programs for employees, customers, partners, and suppliers. Inherent capabilities of NetDimensions' integrated Talent Suite provide organisations with solutions for mobile learning, social collaboration, compliance and extended enterprise management.

6. Irrevocable undertakings

In aggregate, LTG has received irrevocable undertakings to accept or procure acceptance of the Offer in respect of a total of 28,991,507 NetDimensions Shares, representing 56.54 per cent. of NetDimensions' entire issued share capital at the Latest Practicable Date.

LTG has received irrevocable undertakings to accept the Offer from the NetDimensions Directors who hold NetDimensions Shares (together with the trustees of trusts in which they have an interest and certain members of their families) in respect of their entire beneficial holdings of NetDimensions Shares amounting to a total of 8,964,027 NetDimensions Shares (as set out in Appendix III to this announcement) representing approximately 17.48 per cent. of NetDimensions' entire issued share capital at the Latest Practicable Date. These undertakings demonstrate the strength of the commitment to and support for the Offer of those NetDimensions Directors (in their capacity as NetDimensions Shareholders).

Each of the above irrevocable undertakings has been entered into by the relevant NetDimensions Director only as a shareholder of NetDimensions and not in their capacity as a director; nothing contained in the undertakings requires any of the relevant NetDimensions Directors to take or not to take any decision or action in their capacity as a NetDimensions Director.

LTG has also received irrevocable undertakings to accept the Offer from certain NetDimensions Shareholders in respect of their entire beneficial holdings of NetDimensions Shares amounting to a total of 20,027,480 NetDimensions Shares (as set out in Appendix III to this announcement) representing approximately 39.06 per cent. of NetDimensions' entire issued share capital at the Latest Practicable Date.

The above irrevocable undertakings will cease to be binding if:

• the Offer is not made to NetDimensions Shareholders by 5.00 p.m. on 21 February 2017, unless otherwise agreed; or
• the Offer, having been announced, lapses or is withdrawn.

Furthermore, the irrevocable commitment given by certain NetDimensions Shareholders (as set out in Appendix III to this announcement) will also cease to be binding in the event that a third party announces a competing offer to acquire the entire issued share capital of NetDimensions which is at a price equal to or greater than 110 pence per NetDimensions Share.

Further details of these irrevocable undertakings are set out in Appendix III to this announcement.

7. Financing

The terms of the Offer value the Offer at approximately £53.6 million (on a fully diluted basis assuming a cash buy-out or cashless exercise of the outstanding 'in the money' options over NetDimensions Shares) which LTG expects to fund through a combination of the following:

• the use of the net proceeds of the Placing, being approximately £45.1 million;
• drawdown under a new £5 million debt facility with Barclays Bank PLC ('New Debt Facility'), the arrangement and terms of which are expected to be finalised prior to the Offer becoming or being declared unconditional in all respects. In the interim, and in the event that such New Debt Facility is not forthcoming in the time available (or at all), Andrew Brode has extended a subordinated unsecured loan facility of £5 million to LTG on the terms described below ('AB Facility'); and
• the drawdown under an on demand overdraft facility of up to £3.5 million to be provided by Barclays Bank PLC ('Overdraft'), further details of which are set out below.

As required under the terms of LTG's existing loan agreement with Barclays Bank PLC, Barclays Bank PLC has consented to the Company entering into the AB Facility (and the drawdown of funds under such facility) and, subject to the satisfaction of certain conditions prior to completion (including LTG not being in breach of its existing loan agreement with Barclays Bank PLC), the proposed acquisition of NetDimensions.

Placing
LTG has today, through its broker, Numis Securities, conditionally raised £46.5 million through a placing of new ordinary shares of LTG with new and existing institutional investors. Under the conditional placing, LTG is expected to issue 124,000,000 new ordinary shares of 0.375 pence each ('Placing Shares') at an issue price of 37.5 pence per Placing Share ('Placing').

The Placing is supported by existing and new institutional investors and is being carried out for the purposes of partially funding the Offer.

Assuming the Offer is made, the contractual obligations of the placees in the Placing ('Placees') will be conditional upon the placing agreement entered into between Numis Securities and LTG ('Placing Agreement') becoming unconditional in all respects by 8.00 a.m. on 30 March 2017 (or such later time and/or date as may be agreed by Numis Securities, being not later than 8.00 a.m. on the Longstop Date) and not having been terminated prior to Admission.

The Placing Agreement is conditional, among other things, on the Offer, having been made, becoming or being declared unconditional in all respects (save for the admission of the Placing Shares). If the Offer, having been made, does not become or is not declared unconditional in all respects (save for Admission of the Placing Shares), the Placing will not proceed.

The Placing Shares, when issued and fully paid, will be identical to, and rank in full with, the existing ordinary shares in LTG for all dividends or other distributions declared, made or paid after Admission and will rank pari passu in all respects with the existing ordinary shares. No temporary documents of title will be issued.

The Placing Agreement is also conditional on the passing of Resolutions to be put to shareholders at the General Meeting to give effect to the Placing (being resolutions to disapply pre-emption rights in respect of the Placing and to convey authority for the Directors to allot the Placing Shares), LTG entering into the AB Facility (and related subordination agreement), the Overdraft and admission of the Placing Shares to trading on the AIM market of the London Stock Exchange.

Other conditions to the Placing Agreement include:

• the delivery by LTG of certain customary documents and letters;
• LTG having complied with its obligations under the Placing Agreement to the extent that the same fall to be performed prior to Admission; and
• the warranties contained in the Placing Agreement being true and accurate and not misleading at all times before and on Admission.

The Placing is not being underwritten. However, binding placing commitments have been entered into with the Placees, pursuant to which they have conditionally agreed to take up their allocation of Placing Shares.

Numis Securities, in its absolute discretion, also has the right to terminate its obligations under the Placing Agreement if, among other things, at any time on or prior to Admission, any of the following circumstances arise:

• there has been a breach of the warranties, representations or other obligations of LTG contained in the Placing Agreement;
• in the opinion of Numis Securities, there shall have been any development or event which will or is likely to have a material adverse effect on the condition (financial, operation, legal or otherwise), prospects, management, business affairs or financial position of the LTG Group (inclusive of NetDimensions), taken as a whole, whether or not arising in the ordinary course of business; and
• for certain events of force majeure.

LTG will today post an explanatory circular to its Shareholders in relation to the Placing which includes a Notice of General Meeting for a General Meeting to be held on 20 February 2017 at which the Shareholders will be asked to consider and, if thought fit, approve the Resolutions that will grant the Directors the authority to allot the Placing Shares and the power to disapply pre-emption rights with respect to the Placing.

The Directors believe that the Placing and the passing of the Resolutions are in the best interests of LTG and its Shareholders, taken as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions, having irrevocably undertaken to do so in respect of their own holdings of LTG ordinary shares, totalling 240,816,383 LTG ordinary shares, being approximately 57.15 per cent. of LTG's existing issued share capital.

AB Facility

Utilisation of the AB Facility is conditional, among other things, upon the Offer becoming or being declared unconditional in all respects, a subordination agreement having been entered into with Barclays Bank PLC and Barclays Bank PLC having given its consent to LTG's drawdown under the AB Facility. The terms of the AB Facility include, among other things: (i) a facility of up to £5 million available for drawdown within 6 months; (ii) repayable in a single repayment within 1 month from the final instalment of LTG's existing loan facility from Barclays Bank PLC or the termination of such facility if earlier ('Termination Date') or earlier at the discretion of LTG; (iii) interest will be accrued at a fixed rate of 8 per cent. per annum and paid in full on the Termination Date; (iv) a commitment fee of 2 per cent. per annum of any undrawn balance paid in full on the Termination Date; and (v) an arrangement fee of 1.5 per cent of the total facility to be paid on entering into the AB Facility. If the Offer, having been made, does not become or is not declared unconditional in all respects, LTG will not have use of the AB Facility for any purpose.

Overdraft

Barclays Bank PLC has given credit approval to an on demand overdraft facility of up to £3.5 million which (subject to definitive documents being entered into) will be available for drawdown by LTG before the Offer becomes or is declared unconditional and which the Directors intend to repay from the cash reserves of the Enlarged Group following completion of the Offer.

8. Directors' proposed participation in the Placing

The following Directors have confirmed that they support the Placing and they have agreed to participate in the Placing and subscribe for the following number of Placing Shares:

9. Offer-related arrangements

Confidentiality Agreement

LTG and NetDimensions entered into the Confidentiality Agreement pursuant to which LTG has undertaken to, amongst other things: (i) keep confidential information made available by NetDimensions confidential and not to disclose it to third parties (other than to permitted disclosees) unless required by law or regulation; and (ii) comply with customary non-solicitation provisions.

Waiver Agreement

NetDimensions and the NetDimensions Directors entered into the Waiver Agreement pursuant to which the NetDimensions Directors and NetDimensions have undertaken and confirmed that in their opinion the takeover provisions pursuant to Article 142 of the NetDimensions Articles do not apply in making the Offer and, upon the Offer becoming or being declared unconditional in all respects in accordance with its terms, to the extent that there is any such alleged or actual breach of Article 142, such breach shall be waived.

10. Related party transactions

Andrew Brode is a Director and substantial Shareholder, holding in aggregate 113,215,005 ordinary shares of LTG representing approximately 26.89 per cent. of the voting rights and, consequently Mr Brode is considered to be a related party of LTG pursuant to Rule 13 of the AIM Rules. The AB Facility which has been entered into between the Company and Mr Brode (and the related subordination agreement with the Company and Barclays Bank PLC to be entered into in connection therewith) constitutes a related party transaction for the purposes of the AIM Rules. The Directors (other than Mr Brode) consider, having consulted with Numis Securities, that the terms of the AB Facility are fair and reasonable insofar as LTG's shareholders are concerned.

The Directors proposing to participate in the Placing ('Participating Directors'), as described in paragraph 8 above, are each considered to be related parties of LTG pursuant to Rule 13 of the AIM Rules. The Participating Directors' subscription for Placing Shares constitutes a related party transaction for the purposes of the AIM Rules. The Directors (other than the Participating Directors) consider, having consulted with Numis Securities, that the participation in the Placing by the Participating Directors is fair and reasonable insofar as LTG's shareholders are concerned.

11. Management and employees

LTG attaches great importance to the skills and experience of the management and employees of NetDimensions, and LTG believes that the Transaction will create an exciting opportunity for the NetDimensions management and employees to join LTG. LTG's plans for NetDimensions do not involve any material change in the conditions of employment of NetDimensions' employees. Subject to any changes which may be agreed with individuals, the existing employment rights of all NetDimensions employees will be respected following completion of the Offer.

12. Share options

The Offer will extend to any NetDimensions Shares not already owned or agreed to be acquired by LTG and which are unconditionally allotted or issued and fully paid (or credited as fully paid) on or before the date on which the Offer closes to acceptances (or such earlier date as LTG may decide), including the exercise or release of existing options or awards granted in relation to any such shares allotted or issued, following the Offer becoming or being declared unconditional in all respects. If the Offer becomes or is declared unconditional in all respects, to the extent options remain unexercised or have not lapsed, LTG intends to make appropriate proposals to the holders of such options or awards to enable a cash buy-out or cashless exercise of such options.

13. Compulsory acquisition, de-listing and cancellation of trading

If LTG receives (within 4 months of making the Offer) acceptances from not less than 90 per cent. in value of the NetDimensions Shares under the Offer and assuming that all of the other Conditions have been satisfied or waived (if capable of being waived), LTG intends to exercise its rights pursuant to the relevant provisions of Cayman Companies Law to acquire compulsorily any remaining NetDimensions Shares to which the Offer relates on the same terms as the Offer by giving notice to the holders of any such remaining NetDimensions Shares. The holders of any remaining NetDimensions Shares are entitled to apply for relief to the Grand Court of the Cayman Islands, however, unless the Grand Court orders otherwise, LTG will proceed to acquire compulsorily any remaining NetDimensions Shares to which the Offer relates on the same terms as the Offer. In calculating whether the threshold has been reached in connection with a compulsory acquisition, any treasury shares held by NetDimensions shall be treated as having been acquired by the LTG.

Assuming that the Offer, having been made, becomes or is declared unconditional in all respects and subject to any applicable requirements of the AIM Rules (including the receipt by LTG of valid acceptances of the Offer in excess of 75 per cent. in nominal value of the NetDimensions Shares), LTG intends to procure that NetDimensions applies to the London Stock Exchange for the cancellation of the admission of the NetDimensions Shares to trading on AIM.

The cancellation of trading of the NetDimensions Shares will significantly reduce the liquidity and marketability of any NetDimensions Shares not acquired by LTG.

It is also intended that, assuming that the Offer becomes or is declared unconditional in all respects and, assuming the cancellation of trading of NetDimensions Shares on AIM, NetDimensions will continue as an exempted company in accordance with the relevant provisions of the Cayman Companies Law.

14. Indicative timetable of key events

The following comprises an expected timetable of key events:

* The Offer shall remain open for acceptance for a minimum of 14 calendar days from the First Closing Date or the date the Offer becomes or is declared unconditional as to acceptances, whichever is later. Not less than 14 calendar days' notice will be given in respect of the closure of the Offer.

Each of the times and dates above is subject to change. Any such change will be notified by an announcement on a Regulatory Information Service.

15. General

The Offer will comply with the applicable rules and regulations of the London Stock Exchange and AIM. The Offer will be governed by, and construed in accordance with, the laws of England and will be subject to the exclusive jurisdiction of the courts of England and to the Conditions and further terms set out in Appendix I, and the full terms and conditions to be set out in the Offer Document.

It is currently intended that the Offer will be implemented by means of a Takeover Offer, although LTG reserves the right to implement the Offer by way of a Scheme or a Merger.

Your attention is drawn to the Appendices which form part of this announcement. The Conditions and a summary of further terms in relation to the Offer set out in Appendix I to this announcement form part of, and should be read in conjunction with, this announcement. Appendix IV to this announcement contains definitions of certain terms used in this announcement.

This announcement does not constitute an offer or an invitation to purchase or subscribe for any securities.

Enquiries

Learning Technologies Group plc +44 (0)20 7402 1554
Andrew Brode, Chairman
Jonathan Satchell, Chief Executive Officer

Canaccord Genuity, Financial Adviser to LTG +44 (0)20 7665 4500
Simon Bridges

Numis Securities, Nominated Adviser and Broker to LTG +44 (0)20 7260 1000
Stuart Skinner / Michael Wharton (Nominated Adviser)
Ben Stoop (Corporate Broker)

Hudson Sandler Limited, PR Adviser to LTG +44 (0)20 7796 4133
Cat Valentine / Bertie Berger

NetDimensions (Holdings) Limited +852 2122 4500
Graham Higgins, Chairman
Jay Shaw, Chief Executive Officer

Panmure Gordon (UK) Limited, Financial Adviser, +44 (0)20 7886 2500
Nominated Adviser and Broker to NetDimensions
Andrew Godber / Peter Steel / James Greenwood / William Wickham (Corporate Finance)
Erik Anderson (Corporate Broking)

Walbrook PR Limited, PR Adviser to NetDimensions + 44 (0)20 7933 8780
Paul Cornelius / Sam Allen / Nick Rome netdimensions@walbrookpr.com

Further information

This announcement is for information purposes only and does not constitute, or form part of, any offer for or invitation to sell or purchase any securities, or any solicitation of any offer for, securities in any jurisdiction. This announcement does not constitute a prospectus or a prospectus equivalent document. The Offer, if made, will be made solely pursuant to the Offer Document (or, if the Offer is implemented by means of a Scheme or a Merger, the Scheme Document or the Merger Document, as the case may be) which will contain the full terms and conditions of the Offer, including details of how to accept the Offer. NetDimensions Shareholders are advised to read the formal documentation in relation to the Offer carefully once it has been despatched.

Placing

Members of the general public are not eligible to take part in the Placing. This announcement and any offer of securities to which it relates are only addressed to and directed at persons who (i) have professional experience in matters relating to investments who fall within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended) ('Order'); or (ii) fall within article 49(2)(a) to (d) of the Order or (iii) are persons to whom an offer of the Placing Shares may otherwise lawfully be made (all such persons together being referred to as 'Relevant Persons'). The information regarding the Placing set out in this announcement must not be acted on or relied on by persons who are not Relevant Persons. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons.

This announcement (including the Appendices) does not constitute or form part of any offer or any solicitation to purchase or subscribe for securities in the United States. The Placing Shares have not been, and will not be, registered under the US Securities Act of 1933, as amended ('US Securities Act'), or under the securities laws of any state or other jurisdiction of the United States, and, absent registration, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and the securities laws of any relevant state or other jurisdiction of the United States. There will be no public offering of the Placing Shares in the United States or elsewhere.

The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.

No prospectus or offering document has been or will be prepared in connection with the Placing. Any investment decision to buy securities in the Placing must be made solely on the basis of publicly available information. Such information is not the responsibility of and has not been independently verified by LTG, Canaccord Genuity, Numis Securities or any of their agents or affiliates.

The distribution of this announcement and the offering or sale of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by LTG, Canaccord Genuity, Numis Securities or their agents or affiliates that would, or which is intended to, permit a public offer of the Placing Shares in any jurisdiction or possession or distribution of this announcement or any other offering or publicity material relating to the Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this announcement comes are required by LTG, Canaccord Genuity, Numis Securities to inform themselves about and to observe any applic