TVC Holding plc Commencement of Trading on AIM and IEX…

TVC Holdings is pleased to announce its admission to trading on the AIM market of the London Stock Exchange and the IEX market of the Irish Stock Exchange.  In addition TVC Holdings has raised gross proceeds of €50 million by placing 33,333,334 new ordinary shares at a placing price of €1.50 per ordinary share, indicating a market capitalisation for the Company of approximately €152 million.  Funds raised will be used to finance further development of their existing portfolio of companies, fund new investments and support the investment activities of the Group.  Davy is acting as nominated adviser, IEX adviser and broker to TVC Holdings.

TVC Holdings owns Trinity Venture Capital Limited (“TVCL”), which was established in 1997 and is a private equity investor and investment manager, managing risk capital for expanding companies.  The Group’s objective is to achieve capital appreciation through investments in both technology and non-technology companies, principally in Ireland and the UK, that are likely to be successful internationally.  Since its foundation, TVCL has developed extensive investment experience, a unique knowledge of its Initial Portfolio of 14 companies and a proven track record in generating investment opportunities.  In June 2007, TVCL was ranked by Cambridge Associates, a leading independent industry expert, in the top 15% of all year 2000 non-US and US venture funds in terms of performance. Current Group investments include Norkom, AePONA, ChangingWorlds, CR2, Havok and the TAS Group.

The Board of TVC Holdings plc will comprise of Executive Directors: Shane Reihill, Executive Chairman and Founder of TVCL; John Tracey, Chief Executive Officer; and Rory Quirke; all of whom have extensive experience in actively working with portfolio companies, restructuring and building management teams, making acquisitions; and creating long term shareholder value. Non-Executive Directors will include Padraig O’Riordain, Gavin O’Reilly and John McGuckian. The Company Secretary and Chief Financial Officer is John Fagan.

Admission Statistics

Placing Price
 €1.50
 
Number of Ordinary Shares in issue at the date of the Admission Document
 15,123,469
 
Number of Ordinary Shares to be issued to Participating Limited Partners
 52,655,776
 
Number of Placing Shares
 33,333,334
 
Number of Ordinary Shares in issue following Admission
 101,112,579
 
Gross Proceeds of the Placing
 €50 million
 
Market capitalisation at the Placing Price upon Admission
 €152 million
 
Placing Shares as a percentage of the Enlarged Issued Share Capital
 33%
 
Percentage of Enlarged Issued Share Capital subject to lock-in and orderly market arrangements
 66%
 
AIM/IEX Symbol
 TVCH/T1VC
 
ISIN code
 IE00B1Z90V93
 

Speaking today on the commencement of trading on AIM and IEX, Shane Reihill, Executive Chairman and Founder of TVC Holdings, said:

“This is an important milestone in the development of TVC and testament to the strength and expertise of the TVC investment team. The intention is to leverage the proven strengths of the TVC team and to maintain our focus on capital appreciation” 
“We are delighted to announce the successful placing of 33,333,334 ordinary shares, which has raised gross proceeds of €50 million.  The funds raised will be used to finance further expansion of our initial portfolio of companies in order to maximise their value and fund new investments in the technology and non-technology sectors, as we continue to actively seek out new opportunities across a range of business sectors and support the investment activities of the Group.  Our primary focus is to both drive and grow the TVC business, and enhance shareholder value”.

Contacts:
TVC Holdings plc
Shane Reihill, Executive Chairman
John Tracey, Chief Executive Officer
Tel:  +353-1-2057700

Murray Consultants
Pauline McAlester
Tel:  +353-1-4980300

Davy
John Frain
Tel:  +353-1-6796363

Further information on the Group and the securities subject to Admission are contained in an admission document dated 5 July, 2007 (the 'Admission Document').  Terms defined in the Admission Document have the same meaning in this announcement.  Copies of the Admission Document are available to the public, free of charge, at the offices of Arthur Cox, Earlsfort Centre, Earlsfort Terrace, Dublin 2, Ireland and the offices of Arthur Cox, 29 Ludgate Hill, London, EC4M 7JE, England for one month from the date of Admission. Copies of this Document will also be available on TVC Holdings website, www.tvc.com, from the date of Admission.

Information on the Group

1. INTRODUCTION
TVC Holdings plc (“TVC Holdings”) is a newly incorporated holding company led by Shane Reihill as Executive Chairman and John Tracey as Chief Executive. On Admission, TVC Holdings will own Trinity Venture Capital Limited (“TVCL”) as well as a 78% interest in the investment portfolio of Trinity Venture Fund 1 (“TVF1”) and an 82% interest in the investment portfolio of Trinity Venture Fund 2 (“TVF2”). These investment portfolios, together with TVCL’s direct shareholding in Norkom, (the “Initial Portfolio”) consist of substantial interests in 14 companies, including the following:

Company
 Type
 Equity Holding on Valuation Date
 
Norkom
 Quoted
 27.1%
 
AePONA
 Unquoted
 21.8%
 
ChangingWorlds
 Unquoted
 25.2%
 
CR2
 Unquoted
 30.7%
 
Havok
 Unquoted
 27.4%
 
TAS
 Unquoted
 37.9%
 

The Directors believe that the above named companies are capable of significant organic and acquisition led growth. As at the Valuation Date, the Initial Portfolio was valued at €99.7 million, with the unquoted companies valued in accordance with the European Venture Capital Association’s (“EVCA”) Valuation Guidelines.

TVCL was established in 1997 and is a private equity investor and investment manager, managing risk capital for predominantly early stage and expanding Irish companies. It is the management company for TVF1 and TVF2 which have, in aggregate, raised Total Committed Capital of €162.8 million. Its Executive Chairman, Shane Reihill, founded TVCL and appointed John Tracey as its Chief Executive on its inception. Since that time, TVCL has developed extensive investment experience, a unique knowledge of the Initial Portfolio and a proven track record in generating investment opportunities. Under TVCL’s management, TVF2 was, ranked by Cambridge Associates, widely regarded as a leading independent industry expert, in the top 15% of all year 2000 non-US and US venture funds in terms of performance, (source: Cambridge Associates, June 2007). On or before Admission, TVCL will be transferred to the ownership of TVC Holdings in a share swap which values it at €22.7 million, including €12.5 million in goodwill, at the Valuation Date.

The Directors believe that in order to optimise the potential of the Initial Portfolio and to fully leverage the proven investment expertise of TVCL, the next stage of development is to convert the business from its traditional limited partnership model to a publicly quoted corporate structure. By doing so, they believe that TVC Holdings will enhance the investment opportunities available to it through access to capital markets, broadening of investment policies, longer term investment focus and greater flexibility to take advantage of investment opportunities as they arise.

Although not all Limited Partners in TVF1 and TVF2 have opted to participate in the new corporate structure, 19 f the 22 Limited Partners in these Funds, representing an 82% ownership interest in the Initial Portfolio, will swap their interests for Ordinary Shares in TVC Holdings effective on Admission, at which time TVC Holdings will assume their obligations under the Limited Partnership Agreements.  The Group will continue to manage the interests of the remaining Limited Partners and will continue to be paid a management fee by these Limited Partners for doing so.  TVC Holdings intends to raise approximately €47 million (net of expenses) on Admission through the issue and placing of 33,333,334 new Ordinary Shares at €1.50 per Ordinary Share. The Directors are confident that this is the correct strategy for the Group and, accordingly, are subscribing €10 million for 20% of the new Ordinary Shares in the Placing. This capital will be used to finance further development of TVC Holdings’ interest in the Initial Portfolio, fund new investments and support the investment activities of the Group. The Directors’ strategy is to expand the Group’s asset base by making a small number of new investments each year, primarily in Ireland and the UK, as well as working actively with the Initial Portfolio with a view to creating enhanced capital appreciation. The Directors will consider a broad range of investment opportunities. The Directors also expect to leverage TVCL’s investment expertise by leading investment syndicates in larger transactions.

2. TRINITY VENTURE CAPITAL LIMITED AND THE TRINITY VENTURE FUNDS
TVCL was founded in 1997 as the management company for TVF1. Since that time it has become recognised as one of the most successful venture capital companies among its peers and has focused predominantly on early stage and expanding companies, including buyout and restructuring transactions.

It has benefited from a highly experienced management team which has a proven record in sourcing, executing, developing and realising investments.  TVCL’s first fund, TVF1, which constitutes 3.5% of the Initial Portfolio, was established in 1997 and raised Total Committed Capital of €24.1 million, predominantly from institutional investors. The performance of this fund was adversely affected by two primary factors: the marked downturn in the technology market between 2000 and 2003, and the lack of capacity of the fund, due to its small size, to reinvest in the restructuring of some of its Portfolio Companies, which this downturn necessitated. These factors are reflected in the Gross Multiple Return of TVF1 which, as at the Valuation Date, was 0.8x. All of the TVF1 investments have been realised except for the fund’s interests in Norkom and Valista, which are included in the Initial Portfolio. TVF1 also invested €0.4 million alongside the Campus Companies Venture Capital Fund, an Irish universities focused, early stage fund. This investment, which will transfer to TVC Holdings, has been valued at nil, and is not included in the Initial Portfolio.

TVCL’s second fund, TVF2, which constitutes 95.7% of the Initial Portfolio, was established in October 2000 and raised Total Committed Capital of €138.7 million, predominantly from institutional investors.  This fund’s initial investments were primarily in software companies. TVF2 was also initially impacted by the severe downturn in the technology market resulting in the impairment in value of the majority of its Portfolio Companies in line with its peer funds. At its lowest valuation point, on 30 June 2002, the portfolio had been written down to a Gross Multiple Return of 0.5x.

TVCL faced the challenges which the adverse market conditions created and throughout 2002 and 2003 focused on actively working on the restructuring and refinancing of its Portfolio Companies. Due to the size of the fund, TVF2 had better flexibility and capacity to do this than TVF1. Since then, the TVF2 portfolio has experienced strong growth, with its Portfolio Companies developing both organically and through acquisition. Acquisitions by Portfolio Companies have included: Norkom’s acquisition of Data4s in 2004; Havok’s acquisition of RTZen in 2005; Similarity Systems’ acquisition of Evoke in 2005; TAS’ acquisition of On Target, a division of Oracle, Inc., in 2006; and AePONA’s merger with Appium in 2007.

Of the 17 companies in which TVF2 has invested to date, there have been two trade sales, Similarity Systems and SteelTrace, both at an Exit Multiple of 3 times invested funds. TVF2 has only had one liquidation, Sepro Telecom International Limited. All other TVF2 investments remain in the Initial Portfolio.

From a Gross Multiple Return of 0.5x at June 2002, TVCL has improved the performance of TVF2 to a Gross Multiple Return of 1.5x, as at the Valuation Date. This is a notably strong performance in comparison to its peers, with Cambridge Associates ranking TVF2’s performance as 6th out of 39 year 2000 non-US venture capital funds (top 15%) and 23rd out of 163 year 2000 US venture capital funds (top 14% if TVF2 had been a US fund), (source: Cambridge Associates, June 2007).

3. BUSINESS STRATEGY
TVC Holdings’ objective is to leverage the proven strengths of the TVCL investment team and to maintain its focus on capital appreciation. The Directors’ strategy to achieve this is:

(i)      to continue to work actively with the Initial Portfolio in order to maximise its value; and

(ii)      to identify new investment opportunities across a more diversified range of business sectors.

The Directors expect to focus TVC Holdings’ further investments primarily on companies which can become consolidators in their sectors, have experienced management teams, significant growth potential and are located primarily in Ireland or the UK. Other characteristics which the Directors expect to place emphasis on in making investment decisions are the existence of sustainable competitive advantage and an international business focus. The Directors also expect to leverage TVCL’s investment expertise by leading investment syndicates in larger transactions.

The Directors expect that there will be further emphasis on assisting the Initial Portfolio to grow by acquisition in order to optimise their potential for further growth. In addition, the Directors believe that there are opportunities in the technology sector, such as buy and build, management buy-outs and restructurings. This is evidenced by TVF2’s three most recent new investments: APT in 2005 (management buy-out); CR2 in 2005 (restructuring); and TAS in 2006 (buy and build).

4. DIRECTORS AND COMPANY SECRETARY
The Board of TVC Holdings comprises 3 executive Directors and 3 non-executive Directors. Details of the Directors’ terms of appointment are set out in Section 9 of Part IV of this Document. Profiles of the individual Directors and Company Secretary of TVC Holdings are set out below:

Shane Reihill (Age 41), Executive Chairman
Shane Reihill is Executive Chairman of the Group, which is his primary business focus. Shane began his career with Dillon Read Investment Bank in New York and holds an MBA from Columbia Business School. He returned to Ireland in 1992 to join Tedcastle Holdings Ltd, a family business, and subsequently became Finance Director and then joint Chief Executive, before exiting in 2001.

Shane established TVCL in 1997 and since 2001 has been part-time Executive Chairman, leading the fundraisings for TVF1 and TVF2; acting as chairman of the investment committee; and guiding the commercial, legal and governance affairs of TVCL. Since 2000, he has also acted as non-executive chairman of Norkom Group plc, to date the most successful of the Initial Portfolio companies.

Shane has combined his role in TVCL with directing BHR, a family asset management company. The transactions in which he was involved included advising on, and part-financing, the Stg£48 million take private of Mean Fiddler Music Group plc in 2005, following which Shane has been non-executive chairman of its new holding company, LN-Gaiety Holdings Limited.

On Admission, Shane will become non-executive chairman of BHR so that he can focus his efforts on his role as Executive Chairman of TVC Holdings.

John Tracey (Age 48), Chief Executive Officer
John Tracey has been the Chief Executive Officer of the Group since its inception in 1997. He also led the fundraisings for TVF1 and TVF2. In 1989, he moved into venture capital and spent 8 years with ICC Venture Capital where he was investment director. John is an engineer and had previously worked in the semiconductor industry before joining Deloitte as a management consultant. He represents the Group on the boards of Norkom Group plc, Lightstorm Networks, and Shenick. John is a past chairman and current council member of the Irish Venture Capital Association. John holds bachelor and masters degrees in engineering from University College Dublin.

Rory Quirke (Age 36), Director
Rory Quirke is a Director of TVC Holdings. He joined the Group at its start-up in 1997 after qualifying as a chartered accountant with KPMG. Rory was responsible for the Group’s investment in Similarity Systems and for the successful exit in January 2006. He represents the Group on the boards of CR2, LeCayla, LeT Systems, Rococo and TAS. Rory holds bachelor and masters degrees in economics from University College Dublin.

Pádraig Ó Ríordáin (Age 41), Non-Executive Director
Pádraig Ó Ríordáin is a Non-Executive Director of TVC Holdings. Pádraig is managing partner of Arthur Cox, one of Ireland’s leading law firms. Pádraig began his practice with a Wall Street law firm before joining Arthur Cox in 1993 in its New York office. He returned to the Dublin office in 1996 to specialise in corporate law and regulated industries. Pádraig advises a range of public companies, private companies and State related entities on their transactional and business issues. In April 2007, Pádraig was appointed by the Irish Minister for Finance as chairman of the Financial Legislation Advisory Forum. Pádraig is a graduate of University College Cork and Harvard Law School.

Gavin O’Reilly (Age 40), Non-Executive Director
Gavin O’Reilly is a Non-Executive Director of TVC Holdings. Gavin is group chief operating officer of Independent News & Media PLC, the international media and communications group, which is headquartered in Dublin, Ireland. Gavin is president of the World Association of Newspapers and chairman of Dromoland Castle Holdings Limited. Gavin is a non-executive director of Norkom Group plc and a number of other private Irish companies and charities. Gavin is a graduate of Georgetown University Business School in Washington DC.

John B McGuckian (Age 67), Non-Executive Director
John B McGuckian is a Non-Executive Director of TVC Holdings. John is chairman of UTV plc, Irish Continental Group plc, Cooneen Textiles Limited and Dale Farm Limited. He is also a director of Harbour Group Limited. John’s former directorships include AIB plc and Unidare plc. He has served as chairman of the International Fund for Ireland and the Industrial Development Board for Northern Ireland. John was formerly pro chancellor and chairman of the governing body of the Queen’s University of Belfast. John holds a BSc. (Econ) and is a Doctor of Laws.

John Fagan (Age 45), Chief Financial Officer and Company Secretary
John Fagan is Chief Financial Officer and Company Secretary of TVC Holdings. John was appointed to the TVCL board in 2003. He is the former group financial controller and company secretary of Tedcastle Holdings Limited. John is also a director of a number of other private companies. John is a graduate of University College Dublin and a Fellow of the Institute of Chartered Accountants in Ireland.

The contents of this announcement, which have been prepared by and are the sole responsibility of the Company, have been approved by Davy solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000, as amended ('FSMA').

Davy is advising TVC Holdings and no one else in relation to the Placing and Admission and will not regard any other person as its client in relation to the Placing or Admission and will not be responsible to any person other than the Company for providing the protections afforded to its clients or for advising any other person in relation to the Placing or Admission or any transaction or arrangement referred to or information contained in this announcement.

Neither this announcement nor any copy of it may be taken or transmitted into the United States, Australia, Canada, Japan or the Republic of South Africa or to a resident, national or citizen of Australia, Canada, Japan or the Republic of South Africa. The Placing and the distribution of this announcement and the other documents or other information relating to the Placing may be restricted by law in certain jurisdictions.

This announcement does not constitute, or form part of, an offer or invitation to sell or issue, or any solicitation of an offer to purchase or subscribe for securities and any subscription for or purchase of, or application for, shares in TVC Holdings to be issued or sold in connection with the Placing should only be made on the basis of information contained in the admission document to be issued in due course in connection with the Placing and Admission (the 'Admission Document') and any supplements thereto. The Admission Document will contain certain detailed information about TVC Holdings and its management, as well as financial statements and other financial data. No offer to the public is being, or will be, made in connection with the Placing and Admission.

This announcement is not an offer of securities for sale in the United States.  The Ordinary Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the 'Securities Act') and may not be offered or sold in the United States or to US persons unless registered under the Securities Act or an exemption from the registration requirements of the Securities Act is available. No public offering of the Ordinary Shares is being made in the United States.

This announcement is not an offer of securities for sale in Canada, Japan, Australia or in any jurisdiction in which such offer is unlawful. The Placing Shares have not been and will not be registered under the applicable securities law of Canada, Japan, Australia or the Republic of South Africa and, subject to certain exceptions, may not be offered for sale or subscription, or sold or subscribed, directly or indirectly, in or into Canada, Japan, Australia or the Republic of South Africa or to or by any national resident or citizen of such countries.

This announcement includes statements which are, or may be deemed to be, 'forward-looking statements'. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding TVC Holdings’ financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to TVC Holdings’ products and services) are forward-looking statements.

By their nature, such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause the actual results, performance or achievements of TVC Holdings to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. These factors include but are not limited to those described in the Admission Document. Such forward-looking statements are based on numerous assumptions regarding TVC Holdings’ present and future business strategies and the environment in which TVC Holdings will operate in the future. 

Forward-looking statements may and often do differ materially from actual results.  Any forward-looking statements in this announcement speak only as at the date of this announcement and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to TVC Holdings’ operations, results of operations, growth strategy and liquidity.   Subject to any legal or regulatory requirements, TVC Holdings expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in TVC Holdings’ expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based.

Information in this announcement or any of the documents relating to the Placing, Admission and/or the Ordinary Shares cannot be relied upon as a guide to future performance.

11 July, 2007

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