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24 July 2013

Charles Russell advise Transense Technologies Plc on its strategically significant capital raising

This article was written prior to the formation of Charles Russell Speechlys, through the merger between Charles Russell and Speechly Bircham.

The Capital Markets team has advised long-standing technology client Transense Technologies PLC in relation to a c.£5 million fundraising by way of an initial placing, an offer for subscription (Offer) made to existing shareholders, and a further placing. The initial placing raised gross proceeds of c.£3.2 million and the Offer raised a further £1.05 million.

Due to an extremely strong response for shareholders, the Offer was substantially oversubscribed. Due to this, and in order not to disappoint any existing shareholders seeking to invest, a further placing was completed to enable those larger shareholders whose applications were to be scaled back under the Offer to subscribe for the excess through a further placing.

In the circular to shareholders relating to the fundraising, the Board had said that should the Offer be oversubscribed preference was likely to be given to smaller shareholders as historically they may have had less opportunity to participate in placings conducted by the company. Through the further placing, the company was able to augment its initial fundraising plans by a further £0.65 million.

The fundraising was launched on the back of significant orders received for all three of Transense's primary products. The order received by IntelliSAW worth US$450,000 from the distributor ETT, provides further confirmation of the steady progress being made by the division in the development of its channel marketing strategy and also end user interest in the heat monitoring system.

The order from Dunlop Japan for US$450,000 of probes which arrived within a month of the then two largest ever orders (from North America and France) demonstrates the traction building globally for this product.

Finally, the order from Anglo American to Translogik for a sale worth c.£1 million (as well as significant expected ongoing revenues) following Anglo American's initial order in August 2012, represents very encouraging evidence of the advancement of the iTrack system.

The net proceeds of the fundraising will be used to continue the progress made to date by further developing the company's strategy, in particular, for sales and field support, quality control and for working capital purposes.

Chief Executive Officer of the Group, Graham Storey, commented, "We are delighted by the strong support we have received from both existing and new investors. We have enjoyed growing momentum in orders and these funds will enable us to support both the direct and indirect sales channels, building on our recent successes. We are confident that we have the best in class solutions for tyre management, the electrical transmission industry and in torque sensing in the industrial and automotive arenas. The quality of our solutions combined with the strong underlying market drivers in these industries means we are confident of our continued success."

David Ford, Executive Director, commented: "As ever, Charles Russell were promptly on hand to provide robust legal advice in the context of our business and market, and the risks that we face. In Charles Russell we have a trusted advisor that knows corporate finance and understands the TMT sector."

The Charles Russell Team was led by Mark Howard, with assistance from Associates, Tom Smitham and Martin Griffiths, and Trainee Solicitor, Stephanie Woods.

Charles Russell Partner Mark Howard commented, "We are proud to have advised Transense on this strategic fundraising and have once again thoroughly enjoyed working with the team. Transense has a strong brand in the Technology sector and this fundraising demonstrates not only Transense's commitment to its shareholders but also the shareholders' belief in its visions for the future. In the current market, where fundraising remains challenging, we are particularly pleased that the offer for subscription proved such an effective option and is certainly a structure other AIM companies with a loyal shareholder following should consider".

Transense is an AIM listed technology company that has developed patent-protected sensor systems for use in the automotive and industrial markets and other high growth markets. Developed in conjunction with partners including McLaren Electronic Systems and General Motors, Transense's Surface Acoustic Wave (SAW), wireless, battery-less, sensor systems offer significant advantages over legacy wireless sensor systems.

Travers Smith LLP advised nomad and broker, N+1 Singer.