LMS Capital plc capitulated to the Rayne Concert Party demand to keep Robert Rayne on the Board of Directors and Head the ” Special Committee ”  tasked with winding down LMS Capital’s investments including 365itservices .co.uk with the following announcement:

25 November 2011

LMS CAPITAL PLC

BOARD CHANGES AND GENERAL MEETING

LMS Capital plc (“LMS” or the “Company”) announces that its board of directors (the “Board”) has

agreed a process  to reconstitute the Board.  This process, which is intended to ensure that  the

Company has an independent Board in place to oversee its wind-down in the best interests of all

shareholders, and to reflect good corporate governance, has been established with the Concert Party

described in the Company’s circular to shareholders dated 7 November 2011.

A Committee of the Board (the  “Special Committee”) will be appointed to manage the reconstitution

and will comprise Richard Christou, Robert Rayne and Mark Sebba. Mark Sebba will chair the Special

Committee.

The Special Committee will effect the search for two new independent non-executive directors with

the assistance of search consultants.

Upon the appointment of the two new directors, John Barnsley and David Verey will stand down from

the Board, and Robert Rayne will stand down as Chairman but remain on the Board. Richard Christou

will replace Robert Rayne as Chairman.

On the basis of these arrangements and the Board’s support of Robert Rayne, the Concert Party has

withdrawn its request that shareholders be  asked whether they agree that he remain on the Board.

Accordingly, the third resolution relating to Robert Rayne set out in the Company’s circular of 7

November 2011 will not be considered at the general meeting convened for 11.00 a.m. on 30

November 2011 and shareholders will only be asked to vote in relation to the two resolutions to

approve the Company’s proposed wind-down strategy. The Board is unanimously recommending that

shareholders vote in favour of this strategy.

Enquiries

Quayle Munro: 020 7907 4200

Colin La Fontaine Jackson/Andrew Tuckey

Matrix Corporate Capital LLP

This really seals the fate of 365 ITMS Limited  and 365it services.co.uk which will now be broken up and sold as soon as practicable.

LMS CAPITAL PLC

Shareholders General Meeting – Poll Results

On 30 November 2011, LMS Capital plc held the Shareholders General Meeting requisitioned by the Rayne Concert Party. The results of the voting by poll on the resolutions

put to the meeting are listed below. All resolutions were passed by the required majority.

Resolution

For* Against* Withheld**

Votes % Votes % Votes

1. Approve the new investment policy 242,375,643 97.79 5,474,039 2.21 50,206

2. Approve the orderly winding down of the Company 226,548,610 91.39 21,334,453 8.61 65,702

* The ‘For’ and ‘Against’ votes include those votes giving the Company Secretary discretion.

** The votes ‘Withheld’ are not counted towards the votes cast at the General Meeting

Resolution 3, as originally included in the Notice of General Meeting dated 7 November 2011, was withdrawn by the Rayne Concert Party on 25 November

2011 and was therefore not put to the vote at the Meeting.

The Company’s issued share capital, as at 30 November 2011, is 272,674,285 ordinary shares of 10p each.

365it services.co.uk

Peter MacLean, who sometimes refers to himself as a Director and other times as a Non-executive Chairman of 365iT plc, has called a General Meeting for Ordinary Shareholders on the 12th December 2011 at 10.00 in the company’s offices’s at 4 Cartel Business Centre, Stroudley Road, Basingstoke, Hampshire, RG24 8FW.

This is to change the name of 365iT plc to Fox IT Holding plc and to re-register as a limited company.

Now, 365iT and Impera plc shareholders must be asking themselves how it is that they are invited to discuss and approve a change of name and company status but they didn’t get to vote on the sale of most of the companies that 365iT plc owned to LMS Capital; didn’t get to vote on who got their loan notes paid off and who didn’t and also didn’t get to vote on the fact that the name of the company would need to be changed to keep LMS Capital happy.

They were also not informed that these companies were being sold to LMS Capital at a time when approximately 37% of the shareholders ( known as the Raynes Party ) were asking that no further investments be made and the company split up. ( There will be a blog on what has happened at LMS Capital shortly ).

We can assume that MacLean thinks that he was acting within company law, the articles of association etc etc when he made all these decisions. Time will tell about that.

One of the good things about this General Meeting is that it gives oridinary shareholders the opportunity to meet one another and to discuss the recent events orchestrated by MacLean.

Business Health Warning !!

My advice to you for the future is:

Don’t invest in any company run by Peter MacLean.

Don’t sell your company to any company that MacLean is involved in.

The other ” Directors ” ( albeit non-executive ) of 365iT plc at the moment are Derek King ( also a Director of North West Equity and South East Growth Fund Managers Limited ) and Pieter Hooft ( also a Director of 365 ITMS Limited and others ). Presumably Mr Gourlay of Sussex Place  ( and others ) has resigned ??

Presumably Hooft was the contact at LMS Capital that was agreeing to buy the 365iT companies that were sold whilst LMS Capital itself was being asked to stop investing and split itself up and sell each company. ( In fact this is now the agreed strategy for LMS Capital - no further investments and a split up asap ).

More as we get it ……

If you are a shareholder in 365iT plc ( 365it services.co.uk )  , LMS Capital, South East Growth Fund or Sussex Place Ventures then it’s been an interesting few weeks for you. As you may or may not know LMS Capital just acquired 365iT companies 5i Limited, ImperaData, Dynax and Secure Networks at a time when The Honourable Robert Rayne ( until recently Chairman of LMS Capital )  has led the ” Rayne Concert Party ” ( who own around 35% of LMS Capital ) in a bid to break up LMS Capital.

Following an earlier blog of mine shareholders in 365iT ( 365it services.co.uk ) have been contacting me to try to find out what exactly is going on at 365iT plc. All that shareholders have received is a letter from Peter MacLean that raises more questions than it answers. ( Particularly in the light of what is going on at LMS Capital ! ) Interestingly long standing ( long suffering ?? ) 365iT shareholders have said to me that the letter sent out late last month is typical of the sort of ” say quite a bit  but say nothing ” communications that they are used to.

We are all waiting with bated breath to see what the new company that comprises 5i Limited, ImperaData, Dynax and Secure Networks is oing to be called. Maybe it will just be ” part of LMS Capital ” until , if the ” Raynes Concert Party ” have their way, the LMS Capital companies are sold off again. ( I know - you are having trouble keeping up with this already !! ).

Don’t worry ! - this blog will help keep you informed on events at 365iT plc ( 365it services.co.uk ) and LMS Capital as and when they happen. I will also report on the upcoming meeting of 365iT shareholders - it will be very interesting to hear more about the history of Impera plc. Some of the shareholders have known Peter MacLean since he was at Guardian iT.

From what we can tell 365iT is now a debt free company which owns Fox I.T.

http://www.foxit.net/pages/about/investors.shtml

Here’s the blurb for investors from the ( new ) 365iT website:

Investors

365 iT plc

“365 iT plc was founded in 2005 and now employs over 120 people. Through its wholly owned subsidiaries (365 iTechnology Ltd, 5i Ltd, 7 Global Group Ltd and Fox IT Ltd), the group provides an extensive range of IT services and solutions that address ten strategic areas of IT operations and management: IT Managed Services, Unified Communications, Business Continuity, Data Backup, IT Security, Virtualisation, Networks, Storage Solutions, Infrastructure Solutions and IT Service Management.

365 iT plc designs and delivers information and communications technology (ICT) services that help organisations enhance their IT effectiveness and ROI, enabling them to better meet their business objectives. Headquartered in Basingstoke, the company works closely with its clients from SME businesses through to corporate and public sector organisations.

Commenting on the acquisition of Fox IT, Peter MacLean, 365 iT plc’s chairman and chief executive, said: “This is a very positive development for the 365 iT group and I welcome Paul Speers and his team. I look forward to working closely with them in and in particular to helping them grow their business model substantially in the coming years.

MacLean continued: “This latest acquisition represents yet another significant step forward consolidating the group’s position in the very competitive and rapidly developing IT services market.”

Paul Speers, Fox IT’s managing director, said: “The future is undoubtedly very exciting and I believe that Fox IT’s capabilities in ITSM and ITIL strongly complement those of 365 iT plc. The combined forces of both companies will establish a new benchmark in the IT Services Sector.”

This 5th acquisition in just 4 years demonstrates the strength of 365 iT and the group’s ability to exhibit continued substantial growth at a time when many businesses are doing quite the opposite. In September, 365 iT plc was ranked the 15th fastest growing technology company in the UK, according to the prestigious Tech Track league table.”

As you can see until very recently everything was Go, Go, Go at 365iT plc !!

Meanwhile whilst there is a lot about the ” Rayne Concert Party ” on the LMS Capital website

http://www.lmscapital.com/Ournews/tabid/64/Default.aspx

there is nothing about the acquisition of 5i Limited, ImperaData, Dynax and Secure Networks which is a bit odd when you consider that at the time the ” Rayne Concert Party ” were shouting for a break up LMS Capital were just spending a load of money acquiring new companies !!

At least all the creditors and Loan Note Holders of 365iT plc got paid out by the money from LMS Capital. Who were the Loan Note Holders - well you can probably guess ( !! ) but more on after the shareholders meeting

Please bookmark and share this blog because THIS is going to be an interesting story!

P.S. More on the New Company that LMS Capital just funded here:

http://www.365itservices.co.uk/about-us.php

About Us

365 ITMS Limited is a new company formed by a management buyout, backed by LMS Capital plc, of a number of business divisions from 365 iT plc.

These business divisions deliver a range of technology solutions extending from unified communications to network and system infrastructure, security, business continuity and managed services.

The new company, 365 ITMS Limited is managed by Peter Howells who was the Managing Director and co-founder of 5i Limited, the unified communications specialist. Peter MacLean, Chairman and Chief Executive of 365 iT plc who also joins the board as Non-Executive Chairman will focus on corporate strategy and acquisitions.

Peter Howells, Managing Director of 365 ITMS said “Our aim is to become the trusted IT services supplier of choice for corporate businesses in the UK. Bringing together the separate divisions under one banner will provide us with one of the strongest portfolio of technologies and services possible and allow us to work closer with existing and new customers and business partners to achieve this goal.”

Howells added “Working with LMS Capital will not only ensure that we have the capital to fund organic growth but also provide access to a greater source of investment capital to acquire other businesses that will further strengthen our overall proposition in key areas of technology and services delivery.”

Commenting on the investment, Pieter Hooft, Managing Director UK Investments at LMS Capital, said “We are delighted to have the opportunity to be part of 365 ITMS Limited. Our due diligence has confirmed that the individual businesses are held in high regard by customers and key suppliers and we are confident that their integration into a single new company, under a management team that has a proven track record of profitable growth, will create an outstanding company that will take advantage of the rapidly changing IT landscape.”

Cloud Computing is destined to be one of  the most active Hi-Tech sectors for Mergers & Acquisitions in the U.K. in 2011 according to this article

http://www.itpro.co.uk/629173/cloud-computing-companies-to-boost-m-a-in-2011

which comments on Deloitte’s bi-annual survey of U.K. based Hi-Tech companies.

Within Cloud Computing Hosted Telephony and Unified Communications is one of the growth niche’s.

Innovative companies like FutureLine, which is being supported by Cisco Systems, are addressing specific market segments e.g. Highly distributed SMB’s.

A Cisco spokesperson said:

“We are seeing an increasing demand for managed and hosted solutions in the voice space and this is especially the case for smaller businesses with less than 20 employees. FutureLine have a refreshingly new approach by addressing the key fundamentals of quality, security and ease of use and deployment. This is all underpinned by partnering with Cisco who fully understand how to manage different media provided by the various consumption models.”

Andy Brocklehurst
RSM Cisco Small Business

Hot on the heels of Andrew Sage, VP Small Business Systems in the U.S., tweeting that Cisco and Wholesale Hosted voip provider NGT had been awarded ” Product of the year ” from Internet Telephony magazine “ for Outstanding SMB Service Innovation in Collaboration with Cisco “

http://www.ngt.com/news/?presspager=104&arc=&yr=2009&my=

it was announced that NGT had been acquired by Comcast for an ” undisclosed sum “. ( The announcement was in the small print of the first release aswell )

http://blog.tmcnet.com/blog/rich-tehrani/att/comcast-does-wholesale-voip—buys-ngt.html

There’s a number of interesting aspects of this:

1. Some time ago Cisco started partnering with Hosted Voip providers in the U.S. and the U.K. Some of these partners used front ended Call Manager at the core but Cisco also partnered with ” competitor ” platforms. This seemed a little strange until you realised that a lot of Cisco endpoints were getting shipped by these customers - in NGT’s case ”  150,000+ IP endpoints under management ” and the bundle provided used “  Cisco SPA 500 Series IP Phones “.  ” NGT is ( ??? ) the largest provider of wholesale hosted IP Telephony Communication solutions in the U.S. and NGT enables leading VARs, MSOs, Service Providers and Agents to provide nationwide, managed IP communication services to their customers through its proven channel ready solutions “. So NGT had an indirect model. It had sold to a number of ” Telcos “.

2. This might kick off a bit of a ” land grab ” as Telco’s realise that they have to have Hosted Voip in their portfolio. This applies to the U.S. and the U.K.

3. There are a number of Hosted Voip players in the U.K. - a couple using front ended Call Manager; others using a ” competitor ” core but Cisco endpoints and others using neither.

Watch this space because it is going to get pretty wild !!

I have a client who is looking for SaaS companies that might fit into it’s Buy and Build Portfolio. They will deliver solutions for the public and private sectors.

If you know of any such companies please let me know asap.

http://www.acquisitionsinternational.com/home.html
Useful site and book.

This is an interesting review from Icon Corporate Finance of Q2 M&A activity and mentions 365iT as being on the acquisition trail which it is for selected companies that fit the portfolio, such as the acquisition of 5i earlier this year and the very recent acquisition of 7 global.

http://www.iconcorpfin.co.uk/NewsEvents/M&ATechnologyReviewQ22009.pdf