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FDM Group anounces share prices

Based on the Offer Price, the market capitalisation of the Company will be approximately &pound308.5 million.

The Offer is expected to raise &pound242.7 million of proceeds, of which &pound8 million is for the Company and &pound234.7 million is for selling shareholders (comprising Inflexion Private Equity and certain Directors, members of the senior management team and other individuals ("Selling Shareholders")).  The &pound8 million funds being raised for the Company will be used to repay offer-related fees, bank debt and for general working capital purposes.

As part of the Offer, Inflexion Private Equity will sell their entire shareholding in the Company. Following the Offer, the Directors and members of the senior management team will, in aggregate, own approximately 20.4 per cent. of the issued share capital of the Company.

On Admission, the Company will have 107,517,506 Shares in issue with a free float of c.79.6 per cent.

Admission and the commencement of dealings in the Shares is expected to take place at 8.00 a.m. on 20 June 2014.

Investec Bank plc is acting as sponsor, financial adviser, sole bookrunner and broker in respect of the Offer.

Full details of the Offer will be included in the Prospectus, which is expected to be published and available on the Company's website later today.

Business Overview

FDM is a UK-based international professional services provider focusing principally around IT, specialising in the recruitment, training and deployment of its own permanent IT consultants across six core service areas: Development Testing Project Management Office Data Analysis Application Support and Infrastructure.

FDM was founded in 1991 and has grown to become one of the UK's largest employers of IT graduates.  Today, FDM employs a highly skilled and knowledgeable workforce of full-time staff operating in 11 countries.

FDM employs high calibre graduates, typically with Science, Technology, Engineering and Mathematics degrees, as well as ex-military personnel, providing them with high quality training to qualify them to become FDM Consultants ("Mounties").  As at 31 December 2013, the Group had 1,153 Mounties deployed across its client base.

FDM provides clients with low-risk, value-based business-critical IT solutions which are flexible and can be tailored to suit the varying requirements of its clients' businesses.

The Group's Academy Programme, its in-house training programme, bridges the gap between academia or military life and employment, equipping successful candidates with a combination of relevant technical and business skills and commercial experience to succeed in the IT industry.

FDM is dedicated to increasing the recruitment of women into IT and helping its female employees to progress in a male-dominated industry through the & lsquo;Women In IT’ initiative.  As at 31 December 2013, 25 per cent. of its total workforce was female.  The Group is also proud to be an Armed Forces-friendly employer and has established a dedicated programme to recruit ex-military personnel into its businesses in the UK and USA.

FDM has established Academies in London, Manchester, Frankfurt, New York and Toronto and has agreed terms for a property in Glasgow to become its next Academy giving it the capacity to train over 1,500 Mounties per year, sufficient capacity for the foreseeable future.

Mounties are full-time salaried employees of the Group and therefore FDM retains accountability for them, creating a low-risk staffing solution for clients. The Group's services are both geographically flexible and cost-effective, allowing clients to benefit from cost efficiency without compromising on quality.

FDM typically charges its clients a per diem rate for Mounties deployed on client sites.  Mounties work under the direction and control of the clients' employees and therefore FDM carries limited project risk.

The Directors believe that FDM’s highly differentiated business model occupies a niche in the market between larger IT consultancies, recruitment agencies and offshore IT services providers, a highly fragmented market where no single company has a dominant market position.

The Directors estimate that FDM’s addressable market is in excess of &pound10 billion, based on the aggregate spend on IT roles of 0 to 3 years’ experience working for companies with greater than 500 employees in countries in which the Group already operates.

FDM has a client list of 135 multinational blue-chip clients, drawn from the banking & finance, telecoms, media & entertainment, automotive, IT & software, retail & consumer, airlines & aerospace, gaming, energy and not-for-profit sectors. Banking and financial services customers include: Barclays BNP Paribas Citi Group UBS Credit Suisse RBS HSBC KPMG Bank of America Merrill Lynch Virgin Money PricewaterhouseCoopers and Lloyds Banking Group.  Non-banking and financial services customers include: Asda BP British Airways Financial Times Daimler Murex National Grid Sky Virgin Media Wincor Nixdorf The Met Office The Home Office and The Department of Justice.

Reasons for the Offer

The Directors believe that Admission will position FDM for its next stage of development, including further raising the profile of FDM, assisting in retaining and incentivising employees and providing it with a structure for future growth.  Admission will also enable the Selling Shareholders partially or fully to realise their investment in FDM.

Use of proceeds

FDM will receive approximately &pound3 million net proceeds from the Offer (after deducting underwriting commissions, other estimated offering-related fees and other related expenses incurred by it of approximately &pound5 million).  The Company intends to use the net proceeds from the Offer to repay debt under its existing facilities, and to use any surplus and its then existing cash in hand for general working capital and corporate purposes.

Rod Flavell, CEO, said, “Over the last 23 years FDM has grown through multiple technology cycles to establish itself as a leading global professional consulting firm focused on the IT sector.  Our highly differentiated business model of training our own IT and business consultants for specific client needs and placing them as salaried employees within our blue-chip client base has been at the core of this success.

“With the support of Inflexion we have expanded both our geographic reach and breadth of service offering significantly over recent years and this strengthened operational platform leaves FDM extremely well-placed to capitalise on the strong growth prospects of an IT market with global opportunities in big data, mobile and social media.  A public listing will help accelerate this next phase of our development, providing additional funding and raising the profile of FDM with clients and potential employees.  We welcome our new shareholders and, with their support, look forward to delivering the next chapter of our growth story.”


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