Not for publication, transmission or distribution, directly or indirectly, outside France, in particular in the United States, Japan and Australia.
(AMF Visa n° 09-217 dated 8 July 2009)
Paris, 9 July 2009 – Within the framework of the authorisations granted by the general shareholders' meeting of 16 June, Demos (ISIN: FR0010474130 – ALDMO) has announced the issuance without preferential subscription rights of 14,500 OBSAAR bonds representing a total of €14.5 million and the bonus allocation of autonomous BSAAR redeemable equity warrants to all of the company's shareholders.
OBSAAR bond issue
The OBSAAR bond issue will be fully subscribed by BNP Paribas, Neuflize OBC, HSBC, Bred, Banque Palatine, Crédit du Nord and Le Crédit Lyonnais. The bonds will benefit from an average maturity of around 3.5 years for a period of five years. The interest rate applicable to the bonds will be equal to 3-month Euribor plus a gross margin of 1.05% per year: The terms for the redemption of the OBSAAR bonds, based on a 3-month Euribor rate of 1.072% (rate as at 2 July 2009) and a selling price of €0.91 per warrant, therefore give a spread of 1.75% relative to 3-month Euribor.
The BSAAR redeemable equity warrants attached to the OBSAAR bonds will be sold immediately at a price of €0.91 per warrant. Associés en Finance, which was appointed by the Board of Directors to conduct an independent valuation of the selling price of the warrants and not acting as an independent expert within the meaning of the AMF General Regulations, concludes that the price of €0.91 per warrant is reasonable. These warrants will be sold by the banks to around 50 interested employees and corporate officers of the Group, designated by the Board of Directors within categories of beneficiaries determined by the extraordinary general meeting of 16 June 2009. Each warrant will entitle the holder to buy one Demos share at a price of €12.5 per share for a period of seven years. These instruments may not be sold or exercised by holders for an initial period of 1.5 years. A total of 377,000 warrants will be allocated.
Proceeds from the OBSAAR bond issue will allow the Company, in order of priority:
- to finance earn-out payments and additional purchases of shares relating to recent acquisitions. The amount to be paid in cash by the Company between now and 31 December 2009 is estimated at €3.6 million. We invite readers to refer to Section 5.2.2 of Part I of the Prospectus approved by the AMF for a detailed description of these commitments;
- to give the Company greater flexibility in terms of organic growth and maintaining an opportunistic acquisition strategy, thanks in particular to its extended debt maturity;
- to refinance part of the Company's existing debt in order to extend its maturity.
Bonus allocation of autonomous BSAAR redeemable equity warrants
In parallel with the OBSAAR bond issue, Demos will allocate one bonus BSAAR redeemable equity warrant per 15 existing shares to all shareholders able to provide evidence of registration of their shares as at 20 July 2009. The autonomous BSAAR warrants will have the same characteristics as ordinary BSAAR warrants. A total of around 377,391 autonomous BSAAR warrants will be allocated.
The issue as a whole will therefore potentially help to strengthen Demos's equity and provide new sources of long-term financing by means of the exercise of BSAAR warrants and autonomous BSAAR warrants. If all BSAAR warrants and autonomous BSAAR warrants are exercised, 754,391 Demos shares would be issued representing 13.3% of the Company's share capital, based on the number of shares making up its share capital at the date of the Prospectus approved by the AMF.
We invite readers to refer to Sections 4 and 2 respectively of Parts I and II of the Prospectus approved by the AMF for a detailed description of the main risk factors presented by the Company and its listed securities, in particular risks specific to the Group and its organisational structure (risks relating to acquisitions, the development of its catalogue of training programmes and regular development of bespoke training services), risks relating to the Company's business sector and financial risks, i.e. debt and financial commitments relating to acquisitions (earn-out payments and additional purchases of shares).
Commenting on the launch of these new issues, Chairman and Chief Executive Officer Jean Wemaëre states: "Within the framework of the OBSAAR bond issue, the subscription commitments made by our banking partners and by the company's employees attest to their confidence in our expansion strategy and their desire to support Demos's growth. The company has also decided to allocate bonus autonomous BSAAR warrants to all shareholders, which present the same characteristics as ordinary BSAAR warrants. This additional financial flexibility will enable Demos to continue with its strategic development, in particular its international expansion and the roll-out of its activities in high-potential market segments such as major international accounts, e-learning and all other innovative training tools. Our solid business model, extensive and high-quality offering and strong performance to date show that Demos is in a perfect position to capitalise on the brisk growth of the continuing professional training market and establishing itself as a key player and unifying force on a worldwide level."
Indicative timetable
- 8 July 2009 - AMF visa of Prospectus
- 10 July 2009 - Publication of a press release in a nationally distributed French daily newspaper
- 9 July 2009 to 15 July 2009 - Acceptance by the centralising bank for the sale of the BSAAR warrants of letters of commitment to buy BSAAR warrants and pay the corresponding funds
- 28 July 2009 - Subscription of OBSAAR bonds by the banks and payment of funds to the Company
- Issuance and bonus allocation of autonomous BSAAR warrants
- 28 July 2009 - Sale of BSAAR warrants to buyers of BSAAR warrants
- 28 July 2009 - Listing of bonds on Alternext Paris by NYSE Euronext
The prospectus for the bonus allocation of autonomous BSAAR warrants obtained visa no. 09-217 from the Autorité des Marchés Financiers on 8 July 2009.
The terms of the OBSAAR bond issue and the bonus allocation of BSAAR warrants are available on the AMF website (www.amf-france.org) and the Demos website (www.demosgroup.com), at the Company's registered office at 20 rue de l’Arcade, 75008 Paris, and from Oddo Corporate Finance, 12 boulevard de la Madeleine, 75440 Paris Cedex 09.
This press release, and the information it contains, do not constitute an offer to buy or subscribe Demos bonds with redeemable warrants to subscribe to and/or purchase shares (OBSAAR) or redeemable warrants to subscribe to and/or purchase shares (BSAAR), nor does it constitute a solicitation to place such order in or outside France.
This release does not constitute an offer to buy or subscribe securities in the United States. The securities referred to in this press release have not been and shall not be registered under the 1933 United States Securities Act, as amended (the “Securities Act”) and may not be offered or sold in the United States unless they are registered or exempt from registration as provided for under the Securities Act. Any public offer of securities in the United States shall be carried out through a prospectus available with the Company and containing detailed information regarding the Company, its managers and its financial statements. The Company does not intend to register the offer, either in all or in part, in the United States or to make a public offer of its securities in the United States.
No copy of this press release may be published, distributed or sent, either directly or indirectly outside France and, inter alia, to the United States, to Canada, to Japan or to Australia.
This press release does not constitute a solicitation, or an enticement to carry out an investment activity for the purposes of Section 21 of the Financial Services and Markets Act 2000, as amended (“FSMA”). This press release is only intended for (i) persons who are outside the United Kingdom; or (ii) persons in the United Kingdom who are “qualified investors” within the meaning of Article 2(1)(e) of the EC Directive 2003/71/EC, including the persons who, within the meaning of any relevant implementing measure in each Member State of this directive, are also (a) persons authorized by the FSMA or who have professional investment experience as defined by article 19 of the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 as amended (the “Order”) or (b) high net worth persons as defined in article 49(2)(a) to (d) of the Order or (c) any other person likely to be the legal addressee of this release in accordance with Section 21 of the FSMA (all the foregoing persons being referred to as the “Relevant Persons”). Any person in the United Kingdom who is not a Relevant Person is not entitled to use or refer to this press release.
The dissemination, the publication or the distribution of this press release in certain countries could constitute a breach of the law in force. Consequently, people physically present in these countries and where this press release is disseminated, published or distributed must keep themselves informed and comply with the applicable laws and regulations.
About the Demos group
An industry leader positioned centrally in the operational knowledge economy
The Demos group is an essential global player in professional training, Relying on its core business, professional training continues in all its forms (presential and distance trainings), Demos has developed innovative and complementary training methods like e-learning. Other activities associated with the knowledge industry similarly enrich the group's offerings, most notably including HR-driven skills management and the dissemination of educational materials.
A successful business model that is reproducible on the international scale
Located in 16 countries and in all the major cities in France, Demos has demonstrated its ability to combine strong organic growth with efficient external growth policies, an ability which enables it to assist its customers in international markets and to develop local customer bases. Operating in a growth market, the diversity of its offerings, its demanding quality standards, a continued focus on innovative research and a flexible business model have made this Group a market leader in professional training.
A constant and profitable pattern of growth
In 2008, the Demos group achieved revenues of 97.4 million euros, a growth of 24.5% over 2007 with operating profits of 8.7 million euros and group net profits of 4.0 million euros.
Contacts:
Demos Kaélia
Emmanuel Courtois Cécile Sornay
Chief Operating Officer Financial Communications Consultant
ecourtois@demos.fr +33(4) 72 00 46 54 or cecile.sornay@kaelia.fr