RTG Rethink Grp

RNS Number:4847I
Rapid Technology Group PLC
10 March 2003


Rapid Technology transforms itself into eLearning company with Electric Paper
acquisition


Summary

The Board of Rapid Technology Group plc (RTG) announced that the Company has
today entered into a conditional contract to acquire the entire issued share
capital of The Electric Paper Company Limited, a company which specialises in
the development and supply of educational products focused on the computer
literacy market.

RTG proposes to acquire Electric Paper for a total consideration of Euro15.5
million to be satisfied by the issue of 53,333,333 acquisition shares and the
payment of Euro7.5 million in cash. RTG also proposes to enter into an agreement to
transfer and license its core Screenkey technology to SK Interfaces.

In addition RTG intends to raise Euro8 million, before expenses, by the issue of
53,333,333 placing shares at Euro0.15 per share. RTG also proposes to change its
name to ThirdForce plc.

Speaking today, Chief Executive Officer of ThirdForce plc, Brendan O'Sullivan,
said the company has the potential to grow significantly and to become a major
player in the e-Learning market.

"Our strategy is to build a company capable of becoming a global provider of
e-Learning products to the wider population. We believe there are significant
opportunities to be exploited in the e-Learning area, following on from what has
been achieved in the corporate and educational sectors. ThirdForce will be at
the forefront of a new wave of e-Learning, reaching out to people and helping
them in their personal development and teaching them the basic technology skills
we all need to have.

We hope to achieve our goal through a combination of acquisitions and organic
growth. The acquisition of Electric Paper is the first step in this process.

We believe that in the medium term market demands may extend the provision of
e-Learning from computer-based learning to a range of other interactive media
platforms, such as mobile handheld devices and digital TV. Electric Paper's
research and development facility is working on prototypes of interactive
e-Learning content for delivery on these new platforms and is in discussions
with companies from the television and mobile telephone industries in relation
to trial projects."

Mr. Jonny Parkes, Managing Director of Electric Paper said " Electric Paper has
seen great success in the eLearning sector in the last 5 years becoming the UK
and Ireland's leading supplier of ECDL (European Computer Driving License)
courseware and testing. In this new venture ThirdForce will build on our success
and enable us to bring Electric Paper's world class products to even more
customers."

In accordance with the DCM Rules and the AIM Rules, and at the request of the
Company, dealings in the Company's existing ordinary shares were suspended from
trading on AIM on Tuesday 24 December 2002 and on the DCM on Friday 27 December
2002 pending the issue of the circular detailing the acquisition of Electric
Paper.  Application has been made to the UK Listing Authority and to the Irish
Stock Exchange for dealings in the Company's existing ordinary shares to be
restored on today following dispatch of the circular to shareholders.

The Company has also entered into a conditional agreement to transfer and
license its core Screenkey Technology to SK Interfaces.  SK Interfaces is a
private limited company the directors of whom are Mr. Cormac Molloy, the former
Chief Financial Officer and a former director of the Company, and Mr. Mark
McDonnell, a former employee of RTI.

A circular describing the acquisition and the placing and convening an
extraordinary general meeting of RTG to be held on Mon 31 March 2003 to approve
and implement the proposals, is being has been posted to shareholders.  This is
a summary announcement and should be read in conjunction with the full
announcement below.


*    Acquisition of The Electric Paper Company Limited
*    Placing of 53,333,333 Ordinary Shares at Euro0.15 per share
*    Screenkey Technology Agreement
*    Preference Share Agreement
*    Option Agreement
*    New Share Option Plan
*    Change of name to ThirdForce plc
*    Admission to the Developing Companies Market and the Alternative
     Investment Market
*    Waiver of obligation to make a general offer under Rule 9

Introduction

The board of Rapid Technology Group plc ("RTG" or the "Company"), a developer of
technology directed at the electronic point-of-sale market for large retailers,
is pleased to announce that the Company has today entered into a conditional
contract to acquire the entire issued share capital of The Electric Paper
Company Limited ("Electric Paper"), a company which specialises in the
development and supply of educational products focused on the computer literacy
market.

In addition RTG intends to raise Euro8 million, before expenses, by the issue of
53,333,333 placing shares at Euro0.15 per share pursuant to a placing.

RTG proposes to change its name to ThirdForce plc.

Restoration of Dealings

At the request of the Company, dealings in RTG's existing ordinary shares were
suspended from trading on the Alternative Investment Market on Tuesday 24
December, 2002 and on the Developing Companies Market on Friday 27 December,
2002 pending the issue of the circular detailing the acquisition of Electric
Paper.  Application has been made to the UK Listing Authority and to the Irish
Stock Exchange for dealings in the Company's existing ordinary shares to be
restored on 10 March, 2003, following dispatch of the circular.

Description of Electric Paper

Electric Paper is based in Dublin and specialises in the development and supply
of educational products focused on the computer literacy market. Electric
Paper's products, which incorporate interactive training, assessment and
certification testing, have been developed internally with an emphasis on ease
of use and quality of training.  Electric Paper has three product ranges, namely
End-User Certification, Everyday Computing and Constituency Products. These
products address multiple levels of computer literacy competencies, and provide
a syllabus that satisfies the European Computer Driving License ("ECDL"), the
International Computer Driving License ("ICDL") and other similar
certifications.  Electric Paper sells its products into the educational sector,
governmental sector and the corporate sector.

In the financial year ended 31 December, 2001 Electric Paper had revenues of
Euro7.446 million (2000 - Euro3.587 million) and an operating profit before taxation
of Euro1.469 million (2000 - profit Euro0.865 million).

Terms of the Acquisition

The Company entered into a conditional agreement to acquire the entire issued
and allotted share capital of Electric Paper for a total consideration of
Euro14.415 million.  As at the date hereof 27,956,989 ordinary shares are in issue
and credited as fully paid.  Electric Paper has issued options in relation to a
further 2,104,289 ordinary shares.  The Company proposes to acquire the shares
currently in issue and the ordinary shares to be issued to the Electric Paper
option holders pursuant to an offer letter which sets out the terms of the
proposal made by the Company to the Electric Paper option holders. The EP Option
Holders will receive consideration of Euro1.085million.

Terms of the Placing

The Company is proposing to raise Euro8 million (before expenses), by the issue of
53,333,333 placing shares at the placing price of Euro0.15 per share.  Dolmen
Butler Briscoe has agreed pursuant to the Placing Agreement to use its
reasonable endeavours, as agent for the Company, to procure subscribers for the
placing shares.  The placing shares will, when issued and fully paid, rank pari
passu in all respects with the existing issued ordinary shares.

Reasons for the Acquisition and Future Prospects

In the last ten years the rapid growth in the everyday use of personal computers
and the Internet has created global technology-based training markets in the
corporate and education sectors.  Based on their experience, the Directors
believe that there is an emerging e-Learning opportunity for individuals who
want to acquire the necessary skills to succeed in the technology world of today
or just be comfortable with technology.

Electric Paper has achieved considerable growth in revenues and profits over the
past three years and is in the early stages of developing an international
business, having established subsidiaries in the UK and Australia and a presence
in North America.  The Directors believe that the size of the potential market
for Electric Paper's products and the international recognition afforded to the
ECDL and ICDL qualifications provide opportunities for the future growth of the
Company.  The Director's believe that the acquisition of Electric Paper will
provide a sound platform for future acquisitions in the computer based learning
sector from which to deliver further value to shareholders.

The Directors have a proven track record within the IT education and e-Learning
sector.  Mr. Brendan O'Sullivan, chief executive officer of the Company, will be
responsible for overseeing the day-to-day operations of the enlarged group and
implementing the integration of the various businesses that will be acquired.
The strategy of the Directors is to build a company capable of becoming a global
provider of e-Learning products to the wider population.  The acquisition of
Electric Paper is the first step in this process.  Following the completion of
the acquisition of Electric Paper, the Directors intend to work closely with
Electric Paper's management to build and expand its business within its current
markets with a particular emphasis on the UK and investigate further the
potential for new international market opportunities.  Electric Paper's special
business development unit has completed preliminary investigations of a number
of international markets that indicate substantial opportunities.

The Directors believe that in the medium term market demands may extend the
provision of e-Learning from computer-based learning to a range of other
interactive media platforms, such as mobile handheld devices and digital TV.
Electric Paper's research and development facility is working on prototypes of
interactive e-Learning content for delivery on these new platforms and is in
discussions with companies from the television and mobile telephone industries
in relation to trial projects.

Current Trading

The financial year ended 30 June, 2002 reflects continued improvement in the
Company's business and growing interest in the group's products in the USA, the
Company's core market.  Revenue in the financial year ended 30 June, 2002 was
Euro3.33 million, up from Euro1.66 million in the previous financial year.

Appointment of new Directors

RTG proposes to invite Mr. Jonathan Parkes, the Managing Director of Electric
Paper, Mr. Denis McMahon, the Non-Executive Chairman of Electric Paper and Mr.
Michael Costello, a Non-Executive Director of Electric Paper to join the Board
of RTG following the completion of the acquisition of Electric Paper. Mr.
Jonathan Parkes will be an Executive Director of the Company with specific
responsibility for Electric Paper where he has been Managing Director since
1999. Mr. Denis McMahon and Mr. Michael Costello will both be Non-Executive
Directors of the Company.

Screenkey Technology Agreement

The Company intends entering into a conditional agreement to transfer and
license its core Screenkey technology to SK Interfaces.  SK Interfaces is a
private limited company the directors of whom are Mr. Cormac Molloy, the former
Chief Financial Officer and a former director of the Company, and Mr. Mark
McDonnell, a former employee of RTI.  As Mr. Molloy has been a director of the
Company within the last twelve months the Screenkey Technology Agreement
constitutes a related party transaction for the purpose of both the DCM rules
and the AIM rules.  As the existing directors of the Company believe that the
entry into the Screenkey Technology Agreement represents a significant change in
the manner in which the Company conducts its business, they have decided to make
the Screenkey Technology Agreement conditional upon the approval of the
shareholders, which will be sought at the extraordinary general meeting.

Preference Share Agreement

The Company intends entering into a Preference Share Agreement with Mr. Patrick
McDonagh, the Non-Executive Chairman of the Company, to provide for the
subscription by Mr. McDonagh of redeemable convertible preference shares in the
capital of the Company and the terms under which such shares are to be redeemed
by the Company or may be converted into ordinary shares.  As Mr. McDonagh is a
director of the Company, the Preference Share Agreement constitutes a related
party transaction for the purposes of both the DCM rules and the AIM rules.

Option Agreement

The Company intends entering into an Option Agreement with Mr. Brendan
O'Sullivan, the Chief Executive Officer of the Company, granting Mr. O'Sullivan
options over 7,787,601 ordinary shares.  As Mr. O'Sullivan is a director of the
Company the Option Agreement constitutes a related party transaction for the
purpose of both the DCM Rules and the AIM Rules.

New Share Option Plan

The Company is also proposing that the New Share Option plan be approved and
adopted. The proposal requires the approval of the shareholders, which will be
sought at the extraordinary general meeting.

Change of Name

RTG intends to change its name to ThirdForce plc and proposals to this effect
are included in the resolution to be considered at the extraordinary general
meeting.

Waiver of obligation to make a general offer under Rule 9

The Company intends asking shareholders to approve a waiver of the requirements
under Rule 9 of the Irish Takeover Panel Rules for a general offer to be made by
Mr McDonagh for the balance of the issued ordinary shares in the event that the
issue of shares to Mr. McDonagh pursuant to his underwriting of the placing and/
or the conversion into ordinary shares of all or any of the preference shares
allotted to him pursuant to the Preference Share Agreement cause his
shareholding to equal or exceed 30 per cent of the issued share capital of the
Company.

Circular and Extraordinary General Meeting

A circular describing the acquisition and the placing and convening an
extraordinary general meeting of RTG to be held on 31 March, 2003 to approve and
implement the proposals, has been posted to shareholders.  Copies of the
circular are available from the Company at 40 Lower Baggot Street, Dublin 2,
Ireland and from Insinger English Trust, 44 Worship Street, London EC2A 2JT,
England from 31 March, 2003 to 14 April, 2003 being the date two weeks following
the extraordinary general meeting.


For further information, please contact:

For Rapid Technology Group:
Brendan O'Sullivan             Chief Executive                353 1 2350279

Tom Byrne                      Murray Consultants             353 1 4980300

For Electric Paper:
Angie Kinane                   Financial Dynamics             353 1 6633605


Notes to Editors:

Description of Electric Paper

Electric Paper is based in Dublin and specialises in the development and supply
of educational products focused on the computer literacy market.  Electric Paper
has three product ranges, namely End-User Certification, Everyday Computing and
Constituency Products. These products address multiple levels of computer
literacy competencies, and provide a syllabus that satisfies the European
Computer Driving License ("ECDL), the International Computer Driving License ("
ICDL") and other similar certifications. In 2001, 90 per cent of Electric
Paper's revenue from these products was generated in the UK and Ireland with the
remaining 10 per cent being generated in Australia/New Zealand and the USA.
Electric Paper sells approximately 30 per cent of its products into the
educational sector, approximately 42 per cent into governmental sectors and
approximately 28 per cent into the corporate sector.

Electric Paper employs 85 full time employees in five locations around the
world. Its head office is located in Dublin where 64 employees are based.  It
also has operations in London UK, where it has a sales force of 13, in Victoria,
Australia, where it has a sales force of 3, and a further 6 software developers
are based in New Brunswick, Canada.  Electric Paper also has an arrangement with
2 contractors in North America for the provision of sales and technical support.

In the financial year ended 31 December 2001, Electric Paper had revenues of
Euro7.45 million (2000 - Euro3.59 million) and an operating profit before taxation of
Euro1.47 million (2000 - profit Euro0.86 million).


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