Ovum announces float

Just got this through on email. Ovum finally announces its IPO. A bit busy today so thoughts / analysis / comments will follow later.

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Not for publication, distribution or release in or into the United States, Canada, Australia, the Republic of Ireland, Japan or the Republic of South Africa.

Monday 13 February 2006

Ovum announces intention to float on AIM

Ovum plc ("Ovum" or the "Company"), the international Information, Communication and Technology (ICT) research, advisory and consulting group, today announces its intention to seek admission to trading on AIM, a market operated by the London Stock Exchange.

Bridgewell Securities has been appointed as sole Nominated Adviser and broker to Ovum.

The flotation, which is expected to take place in March, will be effected through a placing of new and existing shares to institutional investors in the UK. The Company is seeking to raise new funds to help finance its continued expansion through new product development and the acquisition of complementary businesses or research teams.

Founded in 1985, Ovum has grown organically and by acquisition to become a well established and respected international business, focused on the ICT market sectors. It employs around 200 people, of which over 110 are analysts or consultants, and operates through a network of offices in the UK, Continental Europe, North America and Asia Pacific.

In the nine months to December 2005, Ovum recorded a 25 per cent increase (12% organic) in revenues of £13.4m and EBITDA for the nine months of £1m was more than double the EBITDA level recorded for the whole of the previous year.

The Directors believe that Ovum is one of the few ICT research businesses with the infrastructure, sales and marketing channels and operational systems capable of supporting a growing global customer base.

The Company's primary activity is providing value-added advisory services to retained and project clients, acting as a well respected and trusted source of industry data, knowledge and expertise on the commercial impact of technology, regulatory and market changes. Ovum engages in continuous research and industry analysis to determine market dynamics in its specialist sectors. This data is packaged and sold online through a range of bespoke and tailored products.

Ovum has developed long-standing relationships with many of its corporate clients, which include major international blue-chip companies such as: Alcatel, AT&T, BT, Cable & Wireless, Cisco Systems, Deutsche Telecom, Fujitsu, Hewlett-Packard, IBM, Microsoft, Telstra and Vodafone. Approximately 65 per cent of revenues are generated in renewable contract form, with a historic 85% renewal rate. A majority of tailored projects are sold to the same contracted client base, providing significant revenue visibility.

The Directors believe that Ovum has strong growth prospects both organically, through the launch of new research products, advisory services, consulting propositions and through acquisition. The ICT research market was estimated to be worth approximately $2.2bn in 2004. The sector can be divided into a small number of global IT and telecoms research/consultancy businesses, of which Ovum is one, and a large number of smaller, more niche businesses. The Directors believe that this latter group offers opportunities for further consolidation.

Commenting on the intention to float, Chris Dines, Chief Executive of Ovum said:

"We are very pleased to announce the planned flotation of Ovum, which marks an important step in the continued development of the business. Since 2001, we have been focused on moving the business from its research publishing base into higher value, more predictable revenue streams from advisory services and related consulting. This transition has been highly successful and today Ovum is one of the few global advisory businesses offering expertise across a broad range of the ICT market.

"Admission to AIM will enable us to continue to build the business and to expand our product offering and expertise, both organically and by the acquisition of complementary businesses. It will also help us to attract and retain high-quality analysts and consultants and enable them and other investors to share in the continued success of the Company."

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Enquiries:

Ovum 020 7551 9238 Chris Dines, Chief Executive

Bridgewell Limited 020 7003 3000 Shaun Dobson / Nick Lovering

Hogarth Partnership 020 7357 9477 James Longfield / Barnaby Fry / Georgina Briscoe

Notes to Editors:

History of Ovum

Ovum was founded in 1985 as a UK focused technology research business. It made its first overseas move in 1994, opening an office in Melbourne, Australia, to serve the Asia Pacific region and opened its first US office in 1996. Ovum enjoyed strong growth over the next four years and in 2000 acquired Richard Holway Ltd a leading UK IT services research business. The company's founder, Richard Holway, joined the Ovum Board as a non-executive. Ovum survived the technology downturn of 2001 and returned to expansion mode in 2003 with offices opening in France and Germany in 2004. In 2005 Ovum opened an office in Hong Kong and also acquired the telecoms research and advisory business of RHK Research.

The products and services currently offered by the Company are grouped as follows:

Advisory services: These are subscription-based packages of bespoke advisory services and specialist research products, featuring contact and enquiry time with key industry analysts. Ovum has developed a number of research products (for example, industry models and forecasts, regular reports and research publications) to support these advisory activities.

Consulting services: Focused on the telecommunications, technology, software and IT services industries. Ovum enters into consultancy projects, leveraging the business' research base. Currently around 60% of Consulting business is derived from the existing Advisory client base.

Analyst engagements: An important part of the Ovum offering is the use of its analysts to provide advice in product and strategy reviews, workshops, roundtables, boardroom meetings and for presentations at conferences and other industry events. Most of these engagements come from existing Advisory clients.

Direct research product sales: Ovum generates a stable revenue stream from the sale of research products from its website, http://www.ovum.com/

Board of Directors

Chris Dines (43), Chief Executive: Chris joined the Company as Finance Director, being promoted to Chief Executive in January 2001. He is a qualified chartered accountant and has a degree from Durham University in Economics and Economic History, much of his career was with Coopers & Lybrand (now pricewaterhousecoopers), where he specialised in business advice, M&A activity and stock exchange guidance for mid-corporate clients.

Tom Carless (37), Group Finance Director: Tom joined Ovum in 2001 as Finance Controller and has recently been promoted to Group Finance Director. To provided financial guidance and leadership during the restructuring of the company and has continued to lead the finance function as Ovum has grown in recent years. Tom has 15 years experience as a finance professional, many of them gained in senior roles within blue-chip companies. Prior to joining Ovum, he worked for Citigroup as Financial Controller for the European IT operations.

Fash Darabi (48), Corporate Development Director: Fash joined Ovum in 1991 as a senior consultant. Since then he has held various positions including principal analysts, managing consultant, sales and marketing director, product development director and managing director of Ovum's telecoms advisory business. HE is also in charge of Ovum's M&A activity and is currently managing the integration of RHK. Prior to Ovum, Fash was at Nortel, where he played a leading role in the development of network management solutions for optical access networks.

Fiona Glennon (37), Business Development Director: Fiona joined Ovum in 2003. She has 10 years of sales and sales management experience, with five years spent in the research and advisory industry. She currently has responsibility for developing the existing Advisory services business. Before joining Ovum, she worked for Datamonitor (New York) and Reuters Business Insight, and prior to that worked for five years in the training and development industry.

Stephen Dawson (59), Non-executive Chairman: Stephen has been a non-executive director of Ovum since 1987 and was appointed non-executive Chairman in 1997. His early career was in IT-related companies Logica and Reuters, followed by 25 years in the venture capital industry, mainly at ECI (specializing in mid-market buyouts) where he was managing director and remains non-executive Chairman. He was also a director of the IT division of BTG (formerly National Enterprise Board). Most recently he was a non-executive director of Guardian IT, ECI'S most successful investment, which became a FTSE 250 company and was sold to SunGard Data Systems in 2002.

Frank Jones (59), Non-executive Director: Frank has been a non-executive board member of Ovum since 1999. He is currently the Non-executive Director of Xafinity and Non-executive Chairman of Inforsense, having previously been Chairman of Schlumberger plc, a position to which he was appointed following the acquisition of Sema plc by Schlumberger Limited in 2001. He has over 30 years of board experience in companies varying in size from £2m to £1.4bn. and extensive experience in mergers and acquisitions and pensions.

Richard Holway (59), Non-executive Director: Richard started in computing in 1966 as a programmer and progressed to join the board of Hoskyns (now Cap Gemini) as Group Marketing Director. He founded Richard Holway Limited in 1986 and became the leading authority on the financial performance of the UK software and IT services market and its constituent companies. In November 2000 Richard Holway Limited was acquired by Ovum. Currently, Mr Holway also serves as a non-executive director of Microgen, an Advisory Board member and partner of Elderstreet Capital Partners and an adviser to several ICT companies.

The Company accepts responsibility for the information contained in this announcement. To the best of the knowledge and belief of the Company (who has taken all reasonable care to ensure that such is the case) the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.

Bridgewell Securities Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for Ovum in connection with the flotation and no-one else. Bridgewell Securities Limited will not be responsible for providing advice to any person in relation to the flotation and/or the associated share offer, the contents of this announcement or any other matter referred to herein.

The ordinary shares which are proposed to be offered (the "Ordinary Shares") have not been, nor will they be, registered under the United States Securities Act of 1933 (as amended) (the "Securities Act") and may not be offered or sold, directly or indirectly, in or into the United States absent registration or an exemption from registration. There will be no public offer of securities in the United States.

This announcement does not constitute an offer of, or the solicitation of any offer to subscribe for or buy, any of the Ordinary Shares to any person in any jurisdiction to whom or in which such offer or solicitation is unlawful. The distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdiction. The value of shares can go down as well as up. Past performance is not a guide to future performance. Potential investors should consult a professional adviser as to the suitability of an investment in the shares of Ovum for the individual concerned.