Andrew brode, chairman of the patent support services company RWS, is set to pocket £8m in cash as part of a reverse takeover deal announced yesterday. The AIM-listed cash shell, Health Media, will acquire RWS's holding company, Bybrook, which is 69.9 per cent-owned by Mr Brode, in a deal that values RWS at £42m. He will receive the balance of his stake in new shares in Health Media, giving him a 49 per cent stake in the company.
Mr Brode first became involved in RWS when he negotiated a management buy-in with the venture capital firm, 3i, in 1995. A spokesman for RWS said Mr Brode, a 63-year-old accountant, had reinvested "everything in RWS" following the disposal in 2000 of the Bybrook subsidiary Eclipse to the publishing group, Reed Elsevier, and that yesterday's deal offered an opportunity to now realise some of his investment.
3i, the private equity group, has decided to cash in its 23 per cent share in the company. A spokesman said that although there was "plenty of life" in RWS, the deal was a "good opportunity for cash" after eight years of investment in RWS.
RWS, which specialises in patent translations and searches, made operating profits of £4.4m for the year to 31 March, up from £2.9m the previous year. The company also announced that results for the first five months of this year were "significantly ahead" of last year.
A spokesman for RWS said that the company had benefited from an increasing number of companies looking to protect research and development investment. This had contributed to the number of patents filed with the European Commission doubling over the past 10 years, he added.
The proposed deal would see an allotment of 37 million new shares at 112.54p each, with 49.6 per cent being placed by brokers, Collins Stewart, to institutional investors. A spokesman at Health Media said the company will change its name to RWS Holdings upon completion of the transaction.
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