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UK 3G Video Player Acquired |
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August , 2005 |
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Further consideration of up to £6 million, to be satisfied by the issue of additional consideration shares, is payable subject to certain profit and/or share price targets. • The initial consideration shares will represent approximately 64% of the enlarged share capital of the Company and in view of the size of ANV relative to the Company, the acquisition will constitute a reverse takeover. • Change
of name to All New Video plc Video Communications Service Market • Strong
Growth ANV • Launched a range of products and services including: 1. Mobile Video
Conferencing including Video Mail • Development
of new services: PC to 3G phone; technology used in television broadcast
and trialled with emergency services David Atkins, the Chief Executive of ANV commented: 'The flotation through reversing into Gordian Investments is a wonderful opportunity for ANV. Not only will the flotation raise ANV's profile in the City, but will also enable ANV to grow along side the 3G industry. I am looking forward to working hard with my management team to develop the business for the benefit of the enlarged group's shareholders' Gordian Investments Plc has conditionally agreed to acquire the entire issued share capital of ANV for an initial consideration of £4 million, of which £3.875 million shall be satisfied by the issue of 55,357,143 Ordinary Shares at an issue price of 7 pence per share and the balance in cash. Additional consideration of up to £6 million is payable to the vendors of ANV, to be satisfied by the issue of further consideration shares at an issue price of 7 pence per share, in relation to the financial years ending 31 May 2006 and 31 May 2007, based on performance criteria. The initial consideration shares will represent approximately 64 per cent of the enlarged share capital of the Company and in view of the size of ANV relative to the Company, the acquisition will constitute a reverse takeover. Assuming the acquisition receives shareholder approval at an Extraordinary General Meeting to be held on 30 August 2005, Gordian Investments will change its name to All New Video plc. Upon completion of the acquisition and admission, David Atkins and Chris Fairhall, two of the vendors, will be appointed Chief Executive and Chief Operating Officer respectively of the New Group Board with other appointments to include Lee Woodland as Chief Technical Officer, Douglas Kearney as Finance Director, John Hawkins as Non-Executive Chairman and Hugh de Lusignan as Non-Executive Director (the 'Proposed Directors'). David Barton, Non-Executive Chairman of Gordian Investments, will remain with the enlarged group as a Non-Executive Director. Established in 2002, ANV's directors believe that it is the only commercially available service to offer live multi party video calling in the UK. The Newbury based company also provides PC to video phone calling and video mail services and has developed services which broaden the range of currently available mobile video services in the UK, such as enabling a video conference to take place between a PC on the internet and a 3G videophone. Background on Gordian Investments Gordian Investments was admitted to AIM in March 2005, and was established to capitalise on acquisition and investment opportunities in the technology, media and telecoms sectors. Following its initial admission, the Company had cash of £1,175,000 with no other significant assets or liabilities The Directors believe that the acquisition of ANV achieves the aims of the Company's investment strategy. INFORMATION ON ALL NEW VIDEO Introduction The ANV Group offers a wide range of video services across both fixed line and mobile telephony platforms. David Atkins, CEO of the ANV Group, established ANV in 2002. He had previously jointly founded Videoweb Limited, a video conferencing business, which was sold in 1999, for a total value of £6.7 million to Genesys SA, a NASDAQ quoted company. ANV was formed to exploit what its then directors believed was a high growth market in video calling, video conferencing and other video-related services on 3G mobile phones. There are already over 6.6 million users of 3G mobile phones in Western Europe and it is estimated that there will be approximately 90 million 3G subscribers by the end of 2008(1). At present, a number of mobile network operators ('MNOs') in the UK only offer video calling between two parties, whereas ANV offers MNOs and enterprise customers a range of services such as video conferencing, video mail, video call termination, video portal services and video logs. The Video Communication Services Market Fixed-line Video Conferencing Fixed-line video conferencing is based upon ISDN or internet protocol ('IP') technologies. It has been estimated that in the UK the fixed line video conferencing market is growing at a compound rate of 24 per cent per annum(2). The Proposed Directors consider that this growth has been stimulated by various factors including: • the inconvenience
and cost of international travel; ANV has managed video conferencing projects for clients including leading city financial institutions and global manufacturing businesses. ANV's close relationship with Radvision, (a NASDAQ quoted Israeli company which manufactures IP and 3G video conferencing equipment) and expertise in networking, enables it to evaluate any current video network platform and to make recommendations as to the most suitable solution. (1) 'Mobile Video: Worldwide market analysis and strategic outlook 2003 - 2008' by ARC Group (2) 'The business case for Videoconferencing' Wainhouse research Mobile Video Conferencing The mobile video conferencing market is forecast to generate worldwide revenues of US $5.4 billion in 2008 with approximately 250 million consumers using mobile video services.(1) Currently MNOs in the UK offer video calls to other 3G mobiles only. Apart from services offered by ANV the Proposed Directors are not aware that there are any other commercially available services in the UK that enable subscribers to hold a video conference call with fixed line users or that allow subscribers to conduct video conferencing with three or more participants over 3G networks. ANV Group's Products and Services ANV's services to MNO's corporate customers and consumers include: Video Mail ANV's video mail solution allows 3G and IP video callers to record a video message for a call recipient if a call cannot be connected. The video message may be replayed on a 3G handset or online. This service permits MNOs to receive call completion revenues that would otherwise not be available. Video Call Termination ANV's video call termination service is similar to voice messaging except that the message can be sent to the recipient as an MMS attachment so that it may be received by non-video enabled handsets. Currently ANV is providing
Orange with a video call termination service in the Video Portal Services ANV's video portal solution allows 3G handset users to select a wide variety of streamed or live content such as news or film clips. ANV's technology has been used in broadcasts by the BBC and ANV is also running trials with the Royal Berkshire Ambulance Trust with a 3G video service which broadcasts live video footage from emergency incidents to the accident and emergency department of local hospitals to ensure staff are prepared for victims' injuries. Video Logs Web logs permit the creation by individuals of web based diaries. ANV has launched what the Proposed Directors believe to be the first commercial 3G video log service in the UK with ITN. Users are able to submit video content through their 3G handset. Video conferencing ANV provides video conferencing using a variety of hardware, manufacturers' bridges and gateways, supporting a wide variety of video enabled endpoints for 3G, ISDN, and IP. ANV is independent of any particular network. It can support, manage and automate calls and has its own call management and technical support teams. ANV supplies customers with the appropriate hardware required to undertake fixed line video conferencing. ANV also offers service and maintenance contracts on equipment sold from its stock. The video conferencing services include mobile meetings and mobile conferencing. Under the ANV mobile conferencing service, ANV dials-out to each of the participants at a set time. Business Model Video conferencing At present, the majority of revenues come from fixed line video conferencing to multinational corporate customers with revenues dependent on usage. Whilst the Proposed Directors believe this source of revenue will continue to grow steadily, they expect significant revenue growth from ANV's 3G related mobile services. Video call termination Services Revenues from
video call termination services are derived on a managed services
basis with MNOs. The existing contract with Orange provides for a
direct flow-through of orders to ANV as a result of any increased
demand for services from the MNO. The MNO is contracted to purchase
additional capacity from ANV as a result of increased demand for video
call termination. The automated nature of Video portal and other revenue sharing services Video portal services are offered to consumers on a premium rate dial-up basis. On accessing the content, the consumer is billed by the MNO, with whom ANV has a revenue sharing agreement under which ANV receives an agreed percentage from the MNO. From this share, ANV pays the content owner a set percentage. Typically, ANV will receive 5 to 10 per cent for processing the call made by the consumer. The Proposed Directors anticipate that revenues from these video portal content-based services are set to grow significantly during the course of this year as the MNOs make video short codes available to enable the widespread launch of commercial services. The Proposed Directors believe that the ANV business model has significant upside given the growth in 3G mobile handsets, yet is low risk due to the diverse customer base and range of services detailed above. The Proposed Directors believe that the majority of ANV's revenue will derive from the significant growth anticipated in the 3G market. Technology As a service provider, ANV develops services through the integration of technology from multiple manufacturers. As ANV is not dependent on any one manufacturer, it is able to develop services in line with consumer demand, rather than at the pace of one particular manufacturer. ANV is currently developing its own software applications which will allow for automated billing processes across multiple manufacturers' platforms and remoteadministration and monitoring of their own content by customers. There are three main components to ANV's technology: Media Servers ANV provides access to live content on media servers through 3G video calls as opposed to streaming content. The key advantage of video on 3G is that it is possible to allow two way interactive services. ANV currently uses media servers from Dylogic S.r.l. ANV's media servers are housed on COLT Telecommunications Limited's and Telstra Corporation Limited's backbone networks in Europe. Gateway Services Currently, ANV uses Radvision gateways which allow calls initiated from 3G mobile phones to connect to any IP device such as a fixed line video conferencing system or media server. These media servers are able to store a wide range of standards based digital video content including television programmes. Equally, using ANV's gateways, it is possible to make a video call from an IP device such as a PC equipped with a web cam on the internet through to a 3G mobile phone. Network Services ANV has relationships with a number of MNOs. Due to the increase in traffic for the existing service, the Proposed Directors anticipate that ANV will have direct connections to major networks in the near future. Sonic Acquisition On 15 May 2005, ANV completed the acquisition of Sonic Telecom France SARL (' Sonic'). Sonic supplies a hardware and firmware package known as the 'Sonic Video Access Device'. This enables video calls to be routed on to the Sonic network, which the Proposed Directors believe benefits the customer by increasing the quality of the connection and reducing call costs. The Proposed Directors believe the acquisition will generate additional profit for the ANV group in addition to expanding global reach. Strategy MNOs have invested over £22.5 billion to acquire UK 3G telephony licenses. In Europe, £71 billion has been spent on 3G licences. Through the services described above, ANV offers the MNOs the opportunity to increase average revenue per user without the need for the MNOs to invest further in capital expenditure to recoup their investment in 3G telephony licenses. The Proposed Directors believe that the expected strong growth in the use of 3G mobile handsets will result in a similar increase in the demand for video conferencing services generally, from which ANV is well positioned to benefit. The ANV Group also intends to continue to grow its fixed line video conferencing business by continuing to target large corporate customers. Current trading and future prospects The Proposed Directors
believe that the ANV Group is well positioned to build on The Proposed Directors believe that the ANV business model has significant upside given the growth in 3G mobile handsets, yet is low risk due to the diverse customer base and range of services detailed above. The Proposed Directors believe that the majority of the enlarged group's revenue will derive from the significant growth anticipated in the 3G market. DIRECTORS OF THE NEW GROUP John Hawkins (aged 51) Proposed Non-Executive Chairman John was CEO of Anite Group plc, a UK listed company, between 1997 and 2003. During his tenure he turned the group from a £50m loss to a £19m profit. He was previously chief executive officer of Graseby plc including at the time of its disposal to Smiths Industries plc. John had previously been Global Head of Multimedia for Philips Electronics and was instrumental in formulating the DVD standard. John is also non-executive chairman of The Salamander group, Easybroker Limited and Genus plc, a non-executive director of Psion plc and chief executive of Atex Group Limited. David Atkins (aged 38) Proposed Chief Executive David founded ANV in 2002, having recognised the potential that video on mobile phones could offer the business community. Previously, David jointly founded VideoWeb Limited in 1997 and, as sales director, grew it rapidly to become the second largest video conferencing business in Europe behind BT plc. The business was sold to Genesys SA for a value of £6.7m in 1999. David will be responsible for the overall management of the enlarged group's business and for overseeing its strategic direction. Chris Fairhall (aged 42) Proposed Chief Operating Officer Chris joined ANV as Chief Operating Officer on 28 May 2005. Chris was one of the first employees of VideoWeb Limited in 1997 and, following its acquisition by Genesys SA was appointed chief operating officer of Genesys' Video Division in November 2001. He successfully integrated video call centres in the UK, Germany, Singapore, Australia and USA, maximising efficiencies in operating costs and ensuring single operating systems and procedures. Chris will be responsible for the overall delivery of the enlarged group's operational plan. Lee Woodland (aged 40) Proposed Chief Technical Officer Lee has over 15 years telecoms experience in both the enterprise and service provider sectors. Prior to joining ANV on 1 May 2005, Lee was involved with the product development of Lucent Technologies' global messaging strategy. In that role, Lee led the development of Lucent's 3G MMS and video messaging product portfolio. Lee will be responsible for developing the product strategy for future video products and services to enable the enlarged group to maintain its competitive position in the video market. Douglas Kearney (aged 50) Proposed Finance Director Douglas, a member of the Institute of Chartered Accountants of Scotland, has over 19 years' experience in private equity investments and finance functions generally. He worked for Charterhouse Development Capital and was a founding director of Royal Bank Development Capital, which became one of the leading private equity firms in the UK. Douglas has been involved in many successful investments across a wide range of industries. Douglas currently acts as finance director of SovGem Limited and Global Oceanic Carriers Limited (both AIM quoted companies) and acts as a consultant to Springfords LLP Chartered Accountants and Sovereign Group Partners LLP. Douglas will also be appointed Company Secretary upon completion of the proposals. Hugh de Lusignan (aged 44) Proposed Non-Executive Director Hugh has over 20 years' experience in the public equity markets and was head of UK Institutional Sales at NatWest Securities and head of Pan European Sales at Societe Generale. Four years ago he was a founding partner of Sovereign Group Partners LLP, an FSA regulated corporate finance house specialising in private equity fund raising and which is an advisor to the Vendors, and is chief executive officer of SovGem Limited David Barton (aged 60) Non-Executive Director David is a qualified Chartered Accountant (FCA). After qualifying in 1969, he decided to leave the profession to pursue a commercial career. He has been actively involved in numerous business sectors, which have included banking, finance, property and service industries. His current activities include being non-executive chairman of Smart Voucher plc, Castor Investments plc and Flexifoil International Limited. He also acts as a non-executive director of Ruffler Bank plc. |
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UK
• Gordian Investments has conditionally agreed to acquire the
entire issued share capital of All New Video Limited ('ANV'), a managed
services company offering live multi-party 3G video conferencing,
PC to video calling and video mail, for an initial consideration of
£4 million, payable in cash and consideration shares. 
