Bond International Software : Proposed sale

Not for release, publication or distribution, in whole or in part, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws of such jurisdiction.

Bond International Software plc

('Bond' or 'the Company' or 'the Group')

Proposed sale of Bond International Software (UK) Limited, Bond International Holdings Inc., Bond International Software KK, Bond International Software (Singapore) Pte. Ltd, Bond International Software China Ltd, Bond International Software Pty Limited

Key points

· Sale of Bond International Software (UK) Limited, Bond International Holdings Inc., Bond International Software KK, Bond International Software (Singapore) Pte. Ltd, Bond International Software China Ltd and Bond International Software Pty Limited for a cash consideration of £17.25m.

· In aggregate, the Company has received undertakings to vote in favour of the Sale Resolution (as defined below) over 10,881,631 Ordinary Shares representing 25.83 per cent of the Existing Shares (including the board and other shareholders as detailed below).

· General Meeting of the Company to be held on 28 September 2016 to approve the Sale Resolution.

· It is important to note that shareholders who may have already signed forms of acceptances in respect of the Constellation Offer are not precluded from voting in favour of the Sale Resolution at the General Meeting, should they wish to do so.

Summary terms of the proposed sale

The Board of Directors of the Company (the 'Board') announces that it has today entered into a conditional agreement with Hockliffe Limited (the 'UK Purchaser' and Bond US Inc (the 'US Purchaser') for the sale of the entire issued share capital of its staffing software subsidiaries, Bond International Software (UK) Limited, Bond International Holdings Inc., Bond International Software KK, Bond International Software (Singapore) Pte. Ltd, Bond International Software China Ltd and Bond International Software Pty Limited ('the Recruitment Software Subsidiaries'), for a cash consideration of £17.25 million subject to adjustment for Net Debt and Net Working Capital (on a cash free debt free basis to be calculated through a completion accounts process) (the 'Sale'). The adjustment is expected to increase the cash payable to the Company on Completion to £18.4 million. The Sale is conditional on shareholder approval in a general meeting.

The US Purchaser and the UK Purchaser are companies formed by STG IV, L.P. and STV IV-A, L.P (the 'STG IV Funds'). The STG IV Funds are funds managed by Symphony Technology Group, LLC. ('STG') Founded in 2002, STG is a US based private equity firm focused exclusively on investing in companies in the areas of software, analytics and tech-enabled services. STG has over $2 billion of capital under management and itsportfolio of companies reports $2.5 billion in revenue and, collectively, has more than 15,000 employees.

The Company's total liability under all warranties and indemnities in the sale and purchase agreement is £nil as the Purchasers have taken out appropriate warranty and indemnity insurance cover.

The Sale is in line with the Company's divestment strategy, announced in February 2016 following an in-depth strategic review, and the Board believes that it will create maximum value for all shareholders.

The Sale follows the announcements on 3 May 2016 of the sale of the entire issued share capital of the Group's wholly owned subsidiary, Strictly Education Limited to Education Services Solutions Limited, for a total consideration of £11.3 million, and on 29 July 2016 of the sale of the Group's HR and Payroll subsidiaries for a total consideration of £29.4m.

Further, on 30 June 2016, Constellation Software Inc ('Constellation') announced an unsolicited offer for the issued and to be issued Ordinary Shares of the Company not already owned by Constellation and the parties acting in concert with Constellation, at 105 pence per Ordinary Share in cash (the 'Constellation Offer'). The full terms of the Constellation Offer were set out in the Constellation Offer Document published by Constellation on 18 August 2016. On 8 September 2016, Constellation announced the level of acceptances, being approximately 6.3 per cent. of the Company's existing issued ordinary share capital, extended the first closing date to 1.00 p.m. on 29 September 2016 and lowered the acceptance condition from not less than 90 per cent. of the Ordinary Shares to which the Constellation Offer relates to more than 50 per cent. voting rights normally exercisable at a general meeting of the Company.

On 1 September 2016, the Directors published their response to the Constellation Offer, which concluded that the Directors, who have been so advised by Houlihan Lokey, having considered the merits of the Constellation Offer, believe that it is not in the interests of Shareholders to accept the Constellation Offer. In providing advice to the Directors, Houlihan Lokey took into account the Directors' commercial assessment.

On 2 September 2016, the Directors issued a statement confirming that ESW Capital, LLC. had made a highly preliminary approach to the Company without any indication of the price, timing, terms or transaction structure of any offer ESW might make, if any formal offer is made. There can be no certainty that a firm offer by ESW will be made, nor as to the terms on which any firm offer might be made.

Assuming completion of the Sale and withdrawal or lapse of the Constellation Offer, and assuming ESW does not make a firm offer, the Company will propose a members' voluntary winding up of the Company as soon as practicable, with the intention of distributing its net assets to Shareholders. A circular to put a liquidation resolution to the Company's shareholders is expected to be sent to shareholders in due course.

The Directors currently anticipate that the total distribution to Shareholders from a members' voluntary liquidation of the Company, after it has completed the Sale and paid all relevant transaction costs and taxes, should be between 113 pence and 114 pence per Ordinary Share (less any initial distribution received) plus the net sale proceeds of the freehold of the Company's registered and head office which is a significant premium to the 105 pence per Ordinary Share which the Constellation Offer represents (further information on the assumptions of the Directors in relation to the anticipated distribution are set out below).

If the Company enters into a members' voluntary liquidation, it is likely there will be an initial cash distribution to Shareholders, with subsequent distributions to be made once the Real Estate Asset has been sold and the creditors of the Company discharged. Whilst the amount and timing of any initial distribution will be determined by the liquidator after the Company enters into a members' voluntary liquidation, the Directors estimate that the amount of that distribution could be between 101 pence and 105 pence per share. The Directors understand that the liquidator would expect to make a first distribution to Shareholders shortly after 4 weeks from the commencement of the liquidation which, subject to completion of the Sale and the outcome of the Constellation Offer, is currently anticipated to commence in the week commencing 24 October 2016.

The Sale is deemed to be (i) a 'frustrating action' to the Constellation Offer (and any other offer which may be made for the Company, including in the event that an offer is ultimately made by ESW) pursuant to Rule 21.1 of the City Code on Takeovers and Mergers (the 'Takeover Code'), and (ii) due to its size, a disposal resulting in a fundamental change in the business of the Company pursuant to Rule 15 of the AIM Rules, and therefore requires the approval of the Shareholders by ordinary resolution at the General Meeting.

Further, the effect of the Sale will be to divest the Company of all of its trading businesses, activities and assets. In accordance with AIM Rule 15 the Company is required to seek to cancel the admission of the Ordinary Shares if it does not propose to complete a reverse takeover under AIM Rule 14 within six months of Completion. The Company does not intend to complete a reverse takeover and therefore the Board will propose a resolution to cancel the admission of its Ordinary Shares to trading on AIM when it proposes the members' voluntary winding up, a circular regarding which will be sent to the Company's shareholders in due course.

Following Completion, Tim Richards and Bruce Morrison, both Directors, will be employed by the Purchasers' group and Tim Richards will resign as a Director of the Company. The other Directors, including Bruce Morrison, will remain on the Board until a liquidator is appointed pursuant to the strategy set out below. In view of Tim Richards and Bruce Morrison's interest in the Sale they are not considered to be independent for the purpose of the recommendation of the Sale below, or in respect of the Constellation Offer and the recommendation not to accept the Constellation Offer.

Martin Baldwin, Richard Hall and Stephen Russell ('the Independent Directors') have given careful consideration to the merits of the Constellation Offer and have unanimously concluded, having consulted with the Company's financial advisers, Houlihan Lokey, that it is not in the best interest of Shareholders to accept the Constellation Offer as it fails to reflect the fair value of the Company.

The Company has received irrevocable undertakings to vote in favour of the Sale Resolution from a Shareholder, who has a beneficial interest in respect of a total of 4,050,000 Ordinary Shares representing 9.61 per cent. of the Existing Shares. This undertaking allows the Shareholder to lapse its undertaking in the event an offer or a revised offer from Constellation is received at 115.5p per Ordinary Share or above.

In addition the Directors have irrevocably undertaken to, and procured that their wives (if applicable) will, vote in favour of the Sale Resolution, in respect of a total of 6,831,631 Ordinary Shares representing 16.22 per cent of the Existing Shares. These undertakings will not lapse in the event of an offer from a third party or revised offer from Constellation. In aggregate, therefore, the Company has received undertakings to vote in favour of the Sale Resolution over 10,881,631 Ordinary Shares representing 25.83 per cent of the Existing Shares.

The Company has also received a letter of intent to vote in favour of the Sale Resolution in respect of 700,000 Ordinary Shares representing approximately 1.66 per cent. of the Existing Shares.

Information on Recruitment Software Subsidiaries

The Recruitment Software Subsidiaries carry on the business of developing software solutions for, and the provision of related services to, the recruitment and staffing sector. The principal software products are Adapt, AdaptSuite, StaffSuite, eEmpACT and Tempware. The Recruitment Software Subsidiaries operate in the United Kingdom, the United States, Australia, Japan, Hong Kong, China and Singapore.

General Meeting

Due to its size, the Sale is deemed to be a disposal resulting in a fundamental change in the business of the Company pursuant to Rule 15 of the AIM Rules and therefore requires Shareholder approval. In addition, as a result of the Constellation Offer, the Company is required by Rule 21.1 of the Takeover Code to obtain Shareholder approval before it completes the Sale. A circular will be posted to shareholders today containing the notice of General Meeting to approve the Sale to be held at Courtlands, Parklands Avenue, Goring by Sea, Worthing, West Sussex BN12 4NQat 10.00 am on 28 September 2016. A copy of this circular can also be found on the Company's website: www.bondinternationalsoftware.com/investor-info/.

It is important to note that shareholders who may have already signed forms of acceptances in respect of the Constellation Offer are not precludedfrom voting in favour of the Sale Resolution at the General Meeting, should they wish to do so.

Shareholders should be aware that, due to the conditions specified in the Constellation Offer, if they vote in favour of the Sale and the Sale completes, the Constellation Offer may lapse and may not proceed.

Financial effects of the Sale

For the year ended 31 December 2015, the Recruitment Software Subsidiaries had a combined audited turnover of £17.8 million and they made an audited net loss before the amortisation and impairment of acquired intangibles, interest and taxation of £1,181,000. As at 31 December 2015, the aggregate value of the Recruitment Subsidiaries audited net assets was £17.8m.

It is expected that the cash proceeds receivable by the Company on Completion from the sale will be £18.4 million, following the adjustment for net debt and working capital. The application of the net sale proceeds will be in line with the strategy following completion stated below.

Strategy following Completion

Following the sale of Strictly Education Limited and the Payroll Subsidiaries and the Recruitment Software Subsidiaries for a total gross consideration of £56 million, the remaining non-cash assets of the Continuing Group will consist of the Real Estate Asset. The Company has repaid its bank debt of £5.95 million in full out of the proceeds of the divestiture programme and received repayment in full of the Strictly Loan Note.

Assuming Completion and the withdrawal or lapse of the Constellation Offer, and assuming that ESW does not make a firm offer, the Company will propose a members' voluntary winding up of the Company as soon as practicable with the intention of distributing the Company's net assets to Shareholders. If the Company enters into a members' voluntary liquidation, which will be subject to Shareholders' approval, it is likely that there will be an initial cash distribution to Shareholders, with subsequent distributions to be made once the Real Estate Asset has been sold, and the creditors of the Company discharged. The principal creditors and contingent liabilities of the Company following the disposals of its assets will relate to the warranties and indemnities provided by the Company, which are up to a maximum liability of £5.3 million and expire 12 months from completion of each of the disposals of Strictly Education Limited and the Payroll Subsidiaries, and the payments required on termination of the Directors' service contracts. In addition, the Company has incurred transaction costs of approximately £1.7 million in relation to the Sale and the sale of the Payroll Subsidiaries and the Constellation Offer.

The Directors currently anticipate that the total distribution to Shareholders from the members' voluntary liquidation should be between 113 pence and 114 pence per Ordinary Share (based on the assumptions set out above and less any initial distribution received) plus the net sale proceeds of the Real Estate Asset. The calculation of this total anticipated distribution is based on the knowledge of the Directors at the time of this announcement and certain assumptions, including that there are: (i) no warranty or indemnity claims pursuant to the disposals described above (the maximum liability of these are set out above); (ii) no significant costs are incurred in excess of the transaction costs stated above; and (iii) that the whole process is completed as soon as practicable after 19 August 2017 (being the expiry date of the warranty and indemnity period pursuant to the disposal of the Payroll Subsidiaries).

Independent Directors' recommendation in respect of the Constellation Offer and the Resolution

On 1 September 2016, the Directors published their response to the Constellation Offer, in which the Independent Directors, who have been so advised by Houlihan Lokey, unanimously recommended that Shareholders do not accept the Constellation Offer, and take no further action in respect of the Constellation Offer. In providing advice to the Independent Directors, Houlihan Lokey took into account the Independent Directors' commercial assessment.

Instead the Independent Directors, who have consulted with Houlihan Lokey, believe that the Sale are in the best interests of the Company and Shareholders as a whole and unanimously recommend that Shareholders vote in favour of the Sale Resolution.

The Directors have irrevocably undertaken to, and procured that their wives (if applicable) will, vote in favour of the Sale Resolution, in respect of a total of 6,831,631 Ordinary Shares representing 16.22 per cent of the Existing Shares. In addition, Shareholders holding 9.61 per cent. of the Existing Shares have undertaken to vote in favour of the Sale Resolution.

In aggregate, therefore, the Company has received undertakings to vote in favour of the Sale Resolution over 10,881,631 Ordinary Shares representing 25.83 per cent of the Existing Shares.

The Company has also received a letter of intent to vote in favour of the Sale Resolution in respect of 700,000 Ordinary Shares representing approximately 1.66 per cent. of the Existing Shares.

Martin Baldwin, the Chairman of Bond, said:

'The Board is pleased to announce the sale of its Recruitment Software Subsidiaries as we believe this will generate maximum value for shareholders. The proposal by the Purchaser, which was received as part of a competitive process in which multiple offers were submitted, represents an attractive valuation for the businesses and recognises its market position and future prospects.'

A copy of this announcement and the Circular is and will be available free of charge, subject to certain restrictions relating to persons in any jurisdiction where release, publication or distribution of this announcement would constitute a violation of the securities law of such jurisdiction, for inspection on Bond's website at:www.bondinternationalsoftware.com/investor-info/while the Constellation Offer remains open for acceptance.

MAR

The information contained within the announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

Definitions

Terms defined in the Circular (which was published on 12 September 2016) have the same meaning in this announcement. A copy of the Circular can also be viewed on the Company's website.

For further information, please contact:

Bond International Software plc: Tel: 01903 707070

www.bondinternationalsoftware.com

Steve Russell: Group Chief Executive

Bruce Morrison: Group Finance Director

Buchanan: Tel: 020 7466 5000

Richard Darby

Steph Watson

Houlihan Lokey Capital, Inc. (Financial adviser)

Thomas Bailey Tel: 001 404 495 7056

Cenkos Securities plc (Nomad) Tel: 020 7397 8900

Stephen Keys

Camilla Hume

Disclaimer

Houlihan Lokey (being Houlihan Lokey Capital, Inc, and any affiliate thereof advising the Company) is acting exclusively for Bond and no one else in connection with the Offer and will not be responsible to anyone other than Bond for providing the protections afforded to clients of Houlihan Lokey or for providing advice in connection with the Offer, the content of this announcement or any matter or arrangement referred to herein. Neither Houlihan Lokey nor any of its subsidiaries, branches or affiliates, owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Houlihan Lokey in connection with this announcement or any statement contained herein or otherwise.

Publication on Website

A copy of this announcement will be available on the Company's website (www.bondinternationalsoftware.com/investor-info/) by no later than 12 noon (London time) on 13 September 2016. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

You may request a hard copy of this announcement by contacting the Company Secretary at Courtlands, Parklands Avenue, Goring West Sussex BN12 4NG. Telephone number: 01903 707070. You may also request that all future documents, announcements and information to be sent to you in relation to the Offer should be in hard copy form.

Disclosure requirements

Under Rule 8.3(a) of the Takeover Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Takeover Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person's interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeree company and by any offeror and Dealing Disclosures must also be made by the offeree company, by any offeror and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeree and offeror companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel's website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeror was first identified. You should contact the Takeover Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Responsibility statement

The Directors accept responsibility for the information contained in this announcement. To the best of the knowledge and belief of the Directors, who have taken all reasonable care to ensure such is the case, the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.

Overseas Jurisdictions

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements.