The end of first ABS failure nears

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By Legal Futures

22 October 2013

Hill: non-executive director of new business

The end of the first alternative business structure failure moved a step closer today after In-Deed Online plc announced plans for a reverse takeover by an e-learning company.

AIM-listed In-Deed was the first listed company to buy a law firm but in June sold it back to one of its founders along with the rest of the online conveyancing company’s business.

As a result In-Deed became an investing company under the AIM rules and was required to arrange a reverse takeover within a year.

Its recently published results showed that In-Deed made a £2m loss in the year to 31 March 2013, following a £1.6m loss in the previous year. After the disposal of Runnett & Co, it left a shell with £800,000 in cash and no liabilities.

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Subject to approval from a general meeting on 7 November, In-Deed is to be renamed Learning Technologies Group plc and the management of Brighton-based international e-learning business Epic will become directors and major shareholders.

In-Deed executive chairman Harry Hill, the founder of Rightmove and Countrywide Property Lawyers, will stay on as a non-executive director.

The new holding company plans to grow both organically and through acquisition to consolidate the “highly fragmented e-learning space”. In the medium term it intends to create a business generating annual revenue of at least £50m; its 2012 results put Epic’s revenues at £6.9m.

The consideration will be £16.3m, comprising the issue of 255m shares to Epic shareholders at a price of around 5.88p per share and a payment of £1.3m in cash. In-Deed’s shares are currently trading at around 8p, down from 35p a year ago.

Some 43.6% of existing shareholders in In-Deed, including the board, have irrevocably undertaken to vote in favour of the transaction

Mr Hil said: “This is an excellent proposition for In-Deed shareholders and a good use of the In-Deed listing. E-learning is a fast growing segment and this business has established itself as a market leader in the UK and has a strong platform to build out internationally.”

Epic CEO Jonathan Satchell said: “We are delighted with the reception we have had from In-Deed’s shareholders and directors, who have supported the injection of our business into their listing.

“We are excited about the future: we have a proven proposition with a competitive advantage within the fast-growing e-learning sector, scalable systems and processes, a blue-chip repeat client base from which to expand and a board that brings deep experience of managing growth here and overseas. The listing will enable us to accelerate our growth through access to capital to effect our buy and build strategy.”

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