5 December 2023

AdvancedAdvT Limited

Proposed cancellation of the Company's Ordinary Shares from the Official List and proposed admission to trading on AIM

AdvancedAdvT Limited (LSE: ADVT, the "Company") intends to request the Financial Conduct Authority ("FCA") to cancel the standard listing of the ordinary shares of the Company (the "Shares") on the Official List and to request the London Stock Exchange to cancel the admission to trading of the Shares on the main market (the "Cancellation").

The Company will apply for the admission of the Shares to trading on the AIM market ("AIM") of the London Stock Exchange ("Admission"), such that Cancellation and Admission will take place simultaneously.

Vin Murria, AdvancedAdvT's Executive Chairperson, said

"We are switching our listing to AIM and expect to have our shares trading again on 10 January 2024.  AIM provides a more suitable regulatory environment for a business of our size and structure as well as offering flexibility with regard to corporate transactions, and will provide access to a broader pool of institutional and other investors.

"The management's experience, expertise and proven track record, together with £95m of cash and assets plus supportive shareholders, position us extremely well to execute on our growth strategy in a rapidly growing and evolving AI and digitally led landscape.

"We recently acquired four businesses with notably strong recurring revenues and have created an initial platform on which we can rapidly scale, innovate and build both organically and inorganically.

"Our two platforms, business/data and compliance solutions and human capital management platforms, provide us with a strong and solid foundation to capitalise on the anticipated rapid market growth and increasing AI, digital transformation, data analytics and business intelligence requirements across these sectors, whilst also expanding our presence in adjacent markets, geographies and digital sectors.

"Forecasts indicate that the business solutions, human capital management and digital transformation markets are anticipated to experience double-digit growth rates extending through 2030."

Core specialisms

On 31 July 2023, the Company completed the acquisition of five software businesses from Capita plc for a combined enterprise value of approximately £33 million in cash. 

In the year ended 31 December 2022, these businesses generated a total revenue of approximately £35 million, with approximately 74 per cent. of the revenue being recurring or from Software-as-a-Service (SaaS).  

Four of these businesses operate across two fundamental business transformational areas: business/data and compliance, and human capital management. Through these core specialisms, the Company delivers innovative software solutions and a platform that enables businesses and organisations to succeed in today's dynamic landscape whilst providing an enabler for, Artificial Intelligence ("AI"), digital transformation, data analytics and business intelligence.

·    Business Solutions (Integrated Business Software and Solutions Limited): provision of financial management software solutions and services.  Innovative software solutions allows organisations to achieve their financial and e-Business strategies by driving transformational changes. 

Its solutions can be hosted in both the private and public cloud and are trusted by more than 150 public, health and private organisations in the UK and Ireland. The use of AI, digital transformation, data analytics and business intelligence software are expected to be highly valuable to these markets.

·    Data&Compliance (CHKS Limited): one of the leading providers of AI driven healthcare intelligence compliance and benchmarking software to address the governance, risk and compliance needs of its healthcare customers.

Its UK based tech-enabled solutions of accreditation, benchmarking and coding services play a role in transforming healthcare services, knowledge sharing and best practice to the healthcare industry globally.

·    Human Capital Management (Retain International Software Limited):  an industry leading global AI centric resource planning and talent management software and service provider. Its solutions integrate with leading enterprise resource planning systems and are trusted by some of the largest global consultancies to deliver effective management and allocation of resources; optimise utilisation and productivity, and enable efficient cost management, financial and staff planning tasks.

·    Human Capital Management (Workforce Management Software Limited): a workforce management software provider, with well-established UK presence and embedded relationships across 300+ clients. Its ability to handle highly complex payroll calculations delivering a gross number through it comprehensive time and attendance and access control solutions provide real-time employee tracking with tangible efficiency benefits.

On 21 November 2023, the Company entered into an agreement for the sale of Synaptic Software Ltd ("Synaptic"), one of the five businesses acquired from Capita plc, to Fintel IQ Limited (the "Disposal") in order to enable the business to have a more strategically aligned owner. Synaptic provides a technology solution platform with research and compliance tools for the retail financial sector. The Disposal and receipt of the net £3.5 million cash consideration is conditional upon, inter alia, the approval of the change of ownership by the FCA.

Strategy

The Group's strategy is centred around backing sectors characterised by long term AI, digital transformation, data analytics and business intelligence trends, that are in early stages of adoption and set to transform the workplace for professionals for the next few decades.

Embracing a long-term perspective, the aim is to build a lasting and thriving business. This thinking shapes how investment is deployed on both M&A and within the platform businesses, in order to develop relationships with clients and partners and with a strategy centred around business and digital transformation and continuous improvement.

This strategy revolves around evaluating high-quality businesses in the pipeline, based on a set of key characteristics. These characteristics align with the management team's vision and will enable businesses to consistently generate long-term value. The Company seeks businesses with: 

·    high recurring revenue streams and good forward visibility;

·    sticky customer retention;

·    mission critical products and services;

·    sectors with high barriers to entry;

·    opportunities for both organic and inorganic growth;

·    strong cash generation; and

·    highly fragmented industries with opportunities for consolidation.

The Directors believe that the acquisitions embody these characteristics and offer opportunities to expand the product offerings to deliver against their existing and future client needs and an opportunity to build on digitisation trends.

The Company will continue in its pursuit of opportunities where a blend of management expertise, enhanced operational performance, increased investment capital, and a targeted approach to acquisitions can enable growth and value creation for stakeholders. Growth opportunities may manifest within the existing acquired businesses or potential target businesses and their core markets, new territories and adjacent sectors.

Financing resources

As of 30 November 2023, the Company has approximately £78 million of cash available to fund further acquisitions, investment and working capital. The Company will receive additional cash proceeds following completion of the Disposal, conditional upon, inter alia, the approval of the change of ownership by the FCA.

Management's track record

The Directors have significant experience executing transactions using listed acquisition vehicles on the London Stock Exchange and have successfully completed a vast array of M&A transactions on and off London's capital markets.  The Company plans to strengthen the Board at the time of the Admission.

The management team boasts substantial experience in the software and services sector, having invested in and operated a range of high-performing businesses. The team have successfully driven operational excellence within these enterprises, leading to consistent organic growth. Moreover, it has a proven track record of targeted and accretive mergers and acquisitions in the software sector.

Market opportunity

The use of AI, digital transformation, data analytics and business intelligence.

Across all sectors, businesses have increasingly embraced or are embracing AI and digitalisation to optimise their insights, processes, operations, and engagement. Implementing these technologies and developing a digital transformation strategy is vital for businesses pursuing growth, efficiency, and long-term success. Sectors and businesses with the highest level of AI and digitalisation tools have significant opportunity for productivity growth.

While the potential of digital transformation and use of AI and digitalisation tools is now recognised, the adoption of new AI and digital strategies by businesses and consumers was, until recently, somewhat limited by various barriers, including companies' willingness to invest in and embrace these technologies. However, the global restrictions imposed by the Covid-19 pandemic have shattered these barriers and compelled businesses to become more agile, resulting in a remarkable acceleration of digital transformation.

Despite cost-cutting measures implemented due to the pandemic, organisations have increased their spending on digital transformation as they rapidly adapt their business models. Harnessing technology has led to the reshaping of multiple aspects of business operations, from internal processes and workflows to customer interactions and business models.

The Directors believe that the current macroeconomic environment presents a substantial investment opportunity in companies well-positioned to harness the structural changes arising from this unprecedented acceleration of AI and digitalisation.

These structural changes have profoundly impacted the way people live, work, and consume, as well as how businesses operate, engage with customers, and conduct sales. Consequently, businesses embracing digital transformation, offering AI and digital solutions, software, and services that enable and support its strategy are expected to experience sustained demand for their products.

Background

The Company was formed on 31 July 2020 for the purpose of effecting a merger, share exchange, asset acquisition, share or debt purchase, reorganisation or similar business combination with one or more businesses.  The Company was admitted to trading on the standard listing segment of the Official List of the London Stock Exchange on 4 December 2020.

The Company's objective is to generate attractive long-term returns for shareholders and to enhance value by supporting sustainable organic growth, acquisitions and other performance improvements within the acquired companies.

On 5 January 2022, the Company made an investment in M&C Saatchi in contemplation of a proposed merger, purchasing 12 million ordinary shares in M&C Saatchi for a price of £2 per share. The executive chairperson of the Company, Vin Murria OBE, owned 15,237,985 ordinary shares in M&C Saatchi and was at the time a non-executive director on its board. This resulted in the combined holdings of Vin Murria OBE and the Company representing approximately 22.3 per cent. of the issued share capital of M&C Saatchi.  On 17 May 2022, the Company announced its firm intention to make an offer for M&C Saatchi by way of a contractual offer.

On 14 June 2022, the Company published the final offer document in respect of the final offer for the issued and to be issued share capital of M&C Saatchi not already owned by the Company. After a prolonged process, the Company announced on 30 September 2022 that it had not received sufficient acceptances and the final offer lapsed.

Cancellation and Admission

Pursuant to Listing Rule 5.2.8, the Company is required to give at least 20 business days' notice of the intended Cancellation. Therefore, it is intended that the Cancellation will become effective from 8.00 a.m. (London time) on Wednesday 10 January 2024, such that the last day of trading of the Shares (with ISIN VGG0103J1075) on the London Stock Exchange would be Tuesday 9 January 2024.

Admission is expected to take place, and dealings in Shares are expected to commence on AIM, at 8.00 a.m. on Wednesday 10 January 2024.

Any change to the times and dates mentioned above will be notified to shareholders by an announcement through a Regulatory Information Service.

An AIM Admission Document will be available on the Company's website at www.advancedadvt.com shortly before Admission.

Singer Capital Markets Advisory LLP will be appointed Nominated Adviser to the Company upon Admission.

Enquiries:

Further information on the Company can be found on its website at www.advancedadvt.com. Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website or any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in the Company.