Flintstone Technologies Plc
AIM : FLT

Flintstone Technologies Plc

July 26, 2005 02:03 ET

Flintstone Technologies Plc: Acquisition of InnoCleaning Magma Holdings B.V. and OspreyDeepClean Limited

LONDON, UNITED KINGDOM--(CCNMatthews - July 26, 2005) - Flintstone Technologies Plc (AIM:FLT) -

Placing of up to 14,285,714 Ordinary Shares of 5p each at 14p per share

Proposed change of name to Proventec Plc

Notice of Extraordinary General Meeting

Flintstone Technologies Plc (AIM:FLT) has conditionally agreed to acquire OspreyDeepClean, ("Osprey") a company which markets and sells specialist cleaning systems in the UK, and InnoCleaning Magma Holdings, ("IMH") the owner of two businesses being InnoCleaning which markets and sells specialist cleaning systems and Magma which develops and markets flame retardant products, for a total consideration of Pounds Sterling 30.986 million to be satisfied by the issue of the Consideration Securities. The acquisition of these companies constitutes a reverse takeover under the AIM Rules and, as such, requires the approval of Shareholders at the Extraordinary General Meeting of the Company to be held on 24 August 2005.

Highlights

- Acquisition of the entire issued share capital of Osprey and IMH for a total consideration of Pounds Sterling 30.986 million

- The 146,330,999 consideration shares represent approximately 62.7 per cent. of the Enlarged Share Capital, assuming full placing

- Placing of up to 14,285,714 shares at 14p per share to raise Pounds Sterling 2 million before expenses

- It is proposed that the Company changes its name to Proventec Plc ("Proventec") following an EGM to be held on 24 August 2005

- Focus of the group on cleaning and coatings technologies

David Chestnutt, Chief Executive of Flintstone Technologies Plc, said: "The target businesses offer synergies with some of the existing investment portfolio and there is the potential to encourage partnerships between complementary technologies. The Flintstone investments will benefit from the introduction of a trading business to the core of its operations."

Further details concerning the background to and reasons for the acquisition, details on the companies, the proposed board of directors and Admission to AIM are set out below.



For further information, please contact:

Flintstone Technologies Plc
David Chestnutt, Chief Executive Tel: + 44 (0) 20 7398 7700
dchestnutt@flintstoneplc.com www.flintstoneplc.com

Collins Stewart Limited
Andrew Smith / Martin Eales, Tel: + 44 (0) 20 7523 8350
Corporate Finance
meales@collins-stewart.com www.cstplc.com

Media enquiries:
Abchurch
Henry Harrison-Topham / Tania Wild Tel: +44 (0) 20 7398 7700
henry.ht@abchurch-group.com www.abchurch-group.com


Collins Stewart, which is regulated in the United Kingdom by The Financial Services Authority, is nominated adviser and broker to the Company and will act as nominated adviser and broker to the Company following Re-Admission and no one else, and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Collins Stewart or for providing advice in relation to the matters contained in this announcement or any matter concerning the Proposals or Admission. The responsibility of Collins Stewart as nominated adviser and broker to the Company before and after Re-Admission are and will be owed solely to the London Stock Exchange.

This Announcement does not constitute an offer to sell or an invitation to subscribe for, or the solicitation of an offer to buy or subscribe for New Ordinary Shares in any jurisdiction where such an offer or solicitation is unlawful and is not for distribution in or into the United States, Canada, Japan, Australia, Ireland or South Africa. The New Ordinary Shares have not been, and will not be registered under the United States Securities Act of 1933 (as amended) or under the applicable laws of Canada, Japan, Australia, Ireland or South Africa and, subject to certain exceptions, may not be offered for sale or subscription, or sold or subscribed, directly or indirectly, within the United States, Canada, Japan, Australia, Ireland or South Africa or to or by any national, resident or citizen of such countries. The distribution of this announcement in other jurisdictions may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdictions. No person is authorised, in connection with the Proposals, to give any information or make any representation other than as contained in this announcement and, if given or made, such information or representation must not be relied upon as having been authorised by the Company or Collins Stewart or their respective directors.

Other than shareholders of Flintstone Technologies Plc, the Admission Document dated 26 July 2005 (which, inter alia, incorporates a circular to Shareholders) ("the Circular") is directed only at persons having professional experience in matters relating to investments (being "investment professionals" within the meaning of article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001) and the investments or investment activities to which the Circular relates are available only to such persons and will be engaged in only with such persons. Persons who do not have professional experience in matters relating to investments (and who are not Shareholders) should not rely on the Circular nor take any action upon it, but should return it immediately to Collins Stewart, 88 Wood Street, London EC2V 7QR.

The following information has been extracted without material adjustment from the Admission document incorporating, inter alia, a circular to Flintstone Shareholders (the "Circular") to be sent to Flintstone Technologies Plc's shareholders dated 26 July 2005. Copies of the Circular are available at the offices of Collins Stewart (9th Floor, 88 Wood Street, London EC2V 7QR).

PROPOSED ACQUISITION AND PLACING

Introduction

As announced today, Flintstone has conditionally agreed to acquire OspreyDeepClean, a company which markets and sells specialist cleaning systems in the UK, and InnoCleaning Magma Holdings, the owner of two businesses being InnoCleaning, which markets and sells specialist cleaning systems and Magma, which develops and markets flame retardant products, for a total consideration of Pounds Sterling 30.986 million to be satisfied by the issue of the Consideration Securities. The acquisition of these companies constitutes a reverse takeover under the AIM Rules and, as such, requires the approval of Shareholders at the Extraordinary General Meeting of the Company to be held on 24 August 2005.

The nature of the Group will substantially alter as a result of the Acquisition and your Board proposes that the name of the Company be changed to Proventec Plc. It is intended that the Enlarged Group will focus on providing innovative hygienic solutions, environmentally friendly flame retardant products and a variety of industrial coatings that are designed to enable customers to save costs and improve hygiene and safety conditions. The Directors believe the Acquisition offers the Company opportunities for revenue growth and to benefit from synergies between certain of the existing investee portfolio and the businesses to be acquired.

As part of the transaction, it is intended that there will be three changes to the Company's Board of Directors. The Board will be strengthened by the appointment of two individuals, Peter Teerlink and Thomas Stuecken, who currently hold positions within the companies to be acquired, and Glyn Hirsch shall step down as Chairman to remain as a Non-Executive Director when Mr Teerlink is appointed as Chairman. Further information on Messrs Stuecken and Teerlink is set out in the Circular.

The purpose of this document is to provide information about the Acquisition, to explain to Shareholders the reasons for the Placing, and to convene an Extraordinary General Meeting of the Company to seek Shareholders' approval for the purposes of the Waiver and in order to effect the matters necessary to enable completion of the Acquisition and the allotment and issue of the Consideration Securities and the Placing Shares to take place.

Background

Flintstone's business was established by its subsidiary, CFB (Isle of Man) Limited, in 1998 to realise the value of selected industrial technologies through its business development, corporate and financial management skills. The Group focuses on the sourcing and development of intellectual property with multiple applications, ultimately enabling the sale of products and services to a variety of industrial sectors. In several cases, the Group and the inventors form companies to hold the relevant intellectual property. These and other companies in which the Group invests, known as investee companies, are provided with a full range of services by the Group including finance and administration, public relations, intellectual property protection and enforcement and marketing.

Flintstone's shares were admitted to AIM on 28 June 2002 when the Company made its initial public offering, raising Pounds Sterling 4.5 million (net of expenses). The proceeds from the flotation have been used to strengthen the Company's position in its existing investments and to acquire a substantial interest in a further investee company, Ultra Motor Company Limited. The Company raised a further Pounds Sterling 1.25 million (net of expenses) by way of a Placing and Open Offer in June 2004.

Since the flotation, the Group has made investments in five of the six active investee companies in its portfolio at a cost of approximately Pounds Sterling 4.4 million. In addition, the Group has made available to a number of investee companies debt facilities for working capital purposes. At 31 March 2005, the Group was owed approximately Pounds Sterling 729,487 by investee companies. On 4 April 2005, one of Flintstone's investee companies, Hardide plc, floated on AIM. On 25 July 2005, being the latest practicable date prior to the publication of this document, the market value of the Company's shareholding in Hardide plc was approximately Pounds Sterling 4.6 million.

Whilst the Group has been successful in increasing its net asset value, and has seen the AIM flotation of Hardide plc in April 2005, the Directors have been disappointed by the lack of opportunities to realise the underlying values of its stakes in other investee companies as the businesses have taken longer to mature than originally envisaged. The Directors believe that the Group must introduce sustainable revenue-generating businesses to change the Group into one with a trading model. Shareholders' attention is drawn to the paragraph headed "Re-admission" in the Circular.

Placing and Use of Proceeds

The Company proposes to raise up to Pounds Sterling 2 million (before expenses) by the issue of the Placing Shares. The net proceeds of the Placing will be used to develop the Enlarged Group's business and to provide the Enlarged Group with further working capital.

Current portfolio of Flintstone

Biocote Limited ("Biocote")

Biocote holds and exploits a portfolio of national and international patents for the formulation and use of anti bacterial powder coatings. These coatings create hygienic product surfaces for use in the healthcare and food processing sectors and in domestic, commercial and public premises.

Biocote has 30 licensees in the healthcare, laboratory and leisure industries and is in a positive cashflow situation.

Flintstone holds a 31.5 per cent. stake in Biocote and has one seat on the board.

Firestop Chemicals Limited ("Firestop")

Firestop offers a range of ecologically friendly non-brominated flame retardant additives and their associated treatments for use with textiles and polymers.

The Company now owns 42.2 per cent. of Firestop. The Company also holds Pounds Sterling 150,000 of loan notes which are convertible into ordinary shares in Firestop at the rate of two ordinary shares for each Pounds Sterling 1 unit of loan note. Flintstone holds two seats on the board of Firestop.

Hardide Plc ("Hardide")

Hardide supplies a new super hard and wear resistant coating solution for steel and hard alloy components.

The issued share capital of Hardide was admitted to trading on AIM on 4 April 2005, following the company's initial public offering. Hardide raised Pounds Sterling 1.4 million (net of expenses) upon flotation.

Flintstone currently owns 31.45 per cent. of Hardide and has two seats on the board. On 25 July 2005, being the latest practicable date prior to the publication of this document, Hardide's market capitalisation was approximately Pounds Sterling 14.6 million.

Intellikraft Limited ("Intellikraft")

Intellikraft is currently undertaking development and research into and testing various types of batteries. Flintstone holds a 9.7 per cent. stake in Intellikraft and has one seat on the board.

Keronite Limited ("Keronite")

Keronite has developed a revolutionary material-enhancing surface engineering technology for the treatment of light metals such as alloys of aluminium, magnesium and titanium and similar alloys.

Following the conversion of the loan notes and a recent fundraising at Keronite, Flintstone now owns 12.57 per cent. of Keronite.

Ultra Motor Company Limited ("Ultra Motor")

Ultra Motor has developed a range of super efficient high torque, direct drive electric motors.

Flintstone acquired an 80 per cent. equity stake in Ultra Motor in March 2003 for Pounds Sterling 40,000. In March 2004, Russian Technologies Limited, part of the Alpha Group Consortium, subscribed for 44.4 per cent. of the equity in Ultra Motor for US$1.1 million. Following additional investments by Russian Technologies and Flintstone in 2005, the Company now owns 44.6 per cent. of Ultra Motor. Flintstone has two seats on the Board.

Information on InnoCleaning Magma Holdings

As part of the Reorganisation, IMH was formed on 28 June 2005 for the purpose of acquiring the businesses of InnoCleaning and Magma, which it acquired on 1 July 2005.

Summary of Pro forma Results

Under the Dutch Civil Code there is no requirement for separate audit of InnoCleaning and Magma. Accordingly, the financial information in InnoCleaning and Magma is unaudited. The table below sets out, for illustrative purposes only, aggregated adjusted trading results for OspreyDeepClean, InnoCleaning and Magma for the three years ended 31 December 2004.



2002 2003 2004
EUR '000 EUR '000 EUR '000
Turnover 5,292 3,275 6,151
Gross Profit 2,840 1,441 4,051
Operating Profit 1,556 269 2,674
Profit before tax 1,535 223 2,683
Profit after tax 1,048 179 1,761


Notes:

(i) Investors should read the whole of the Circular and not rely on any key or summarised financial information.

(ii) Investors should note the basis of preparation of the financial information for IMH, as set out in the Circular, which has not been audited or reported on independently.

(iii) A proportion of the revenues generated by OspreyDeepClean and InnoCleaning in each of the three years relate to one off licence fees. In total these one off sales were: 2002: EUR 1.28 million, 2003: EUR 0.36 million and 2004: EUR 2.56 million. As referred to in the Circular under "Risk Factors', there is no guarantee that OspreyDeepClean and InnoCleaning will be able to maintain a similar level of one off licence fee sales.

In the first six months of the current year, the management accounts to 30 June 2005 for InnoCleaning and Magma show a small trading loss. The Directors anticipate that trading will improve in the second half of the year.

Information on InnoCleaning

InnoCleaning comprises two Dutch companies, InnoCleaningConcepts Nederland and InnoManufacturing Services. The business was established in 1998 and its activity at that time was to market and sell a cleaning solution for removing chewing gum from hard surfaces, such as pavements. That product was marketed under the Gumbusters trade mark.

Since 1998, the business has evolved and InnoCleaning now offers a range of cleaning systems to the fastfood industry, as well as to other food retailers and the healthcare sector. The cleaning systems marketed and sold by InnoCleaning combine patented and trade marked equipment with a training course and lease finance options. Each cleaning system can be tailored to individual customer's requirements. The cleaning systems use low-pressure dry steam, demanding less water than conventional cleaners and require fewer chemical agents than traditional non-steam cleaning systems. The Directors believe the primary benefits of InnoCleaning's systems to be a higher level of hygiene together with time, material and labour savings, which in return reduce cleaning overheads for customers. Innocleaning's customers include a major fast food chain, and the existing customer base is located in the Far East, USA and Australia as well as in various countries throughout Europe.

The Directors and Proposed Directors intend to develop InnoCleaning's business in the short term by increasing sales to targeted fast food chains, healthcare providers and supermarkets through geographical expansion of key accounts and by identifying and penetrating other market sectors. The Directors and Proposed Directors intend, in the medium to longer term, to increase InnoCleaning's research and development function with a view to introducing new products and cleaning concepts to the market.

Information on OspreyDeepClean

OspreyDeepClean was established in 1995. Robby (UK), a wholly owned subsidiary of ICH, acquired OspreyDeepClean as an established business in 2003 and the company trades from premises in Cheltenham.

OspreyDeepClean markets and sells, through a network of distributors, specialist cleaning systems which pump out low pressure dry steam onto surfaces which require rigorous cleaning. Its business model is complementary to that of InnoCleaning, focusing on sales of steam cleaning machines rather than entire cleaning systems.

The Directors and Proposed Directors believe that OspreyDeepClean is well placed to cleaning solutions to the healthcare sector in the UK and has opportunities to create markets in other sectors as well as to develop existing key customer accounts.

Information on Magma

Magma comprises Magma Applications and Magma Industries. Magma develops, markets and sells fire retardant products which are environmentally friendly and comply with national and relevant international standards. Magma's products are designed to fire retard timber, paper, plywood and textiles and can be applied directly onto the surface of the object to be fire retarded. To date, roofing and building companies and paper manufacturers have formed the majority of Magma's customers.

Magma's strategy has been to drive sales through a network of distributors who service end users, whilst industrial users are serviced directly by Magma's in-house sales team. Magma is working with a specialist paint manufacturer to produce a fire retardant paint.

Further details of OspreyDeepClean's financial performance is set out in the Circular. Illustrative pro forma financial information for the IMH and its subsidiaries is set out in the Circular.

Proposed Directors

The individuals listed below have agreed to become directors of the Company immediately following the Acquisition:

Thomas Stuecken, (aged 44) Commercial Director

Thomas Stuecken has extensive experience in the international cleaning industry. He was an export director at Premiere Products Limited and oversaw the opening of several new export markets for that company's products during his tenure. Since April 2003, Thomas has been a director of OspreyDeepClean. He is an assessor for the British Institute of Cleaning Science.

Peter Teerlink, (aged 40) Non-Executive Director

Peter Teerlink has extensive experience in merchant banking and venture capital. After working in the financial services sector for ten years, he joined Novem International in 1999 as managing director. In 2001 he became managing director of I-pac Technologies N.V.

It is proposed that Mr Teerlink will replace Mr Hirsch as Chairman of the Board upon Admission, although he shall remain on the Board as a non-executive director.

Reasons for the Acquisition

The Board's historic stated strategy is, inter alia, to enhance shareholder value and to realise gains from the Company's business. The Company has made a strategic decision to introduce sustainable revenue generating businesses to change the Group into one with a trading emphasis. The Directors and Proposed Directors believe that the businesses of InnoCleaning, OspreyDeepClean and Magma offer synergies with existing assets of the Company and present opportunities for profitable revenue growth, as InnoCleaning, OspreyDeepClean and Magma have established brands with revenue growth opportunities in their respective target sectors and geographical territories. The Directors and Proposed Directors believe the Company can benefit by encouraging partnerships between certain of its existing investee companies and the InnoCleaning, OspreyDeepClean and Magma businesses. The Directors believe that the Group would benefit from the introduction of trading businesses.

Vendor Group Reorganisation

For the purposes of entering into the Acquisition Agreements the Vendor Group entered into a reorganisation to form the Reorganisation Group on the following basis:

On 27 June 2005, IMH issued an ordinary share of Euro 1 to Falco Pescatore consideration for which was to be satisfied by the transfer to IMH of the entire issued share capital of Magma and InnoCleaning such transfers taking effect on 1 July 2005; and

On 1 July 2005, Falco Pescatore acquired, inter alia, the entire issued share capitals of Magma Applications and Magma Industries from MINT Investment and the entire issued share capitals of InnoManufacturing Services and InnoCleaningConcepts from ITH in consideration of the issue of the Consideration Securities to be satisfied upon Falco Pescatore receiving the same.

Principal Terms of the Acquisition

The Company has agreed, conditionally, to purchase the entire issued share capital of IMH for a consideration of Pounds Sterling 25.986 million and the entire issued share capital of OspreyDeepClean for a consideration of Pounds Sterling 5 million. The consideration payable to Falco Pescatore as the vendor of IMH is to be satisfied as to Pounds Sterling 15.486 million by the issue of 110,616,714 Ordinary Shares and as to a further Pounds Sterling 10.5 million by the issue of Pounds Sterling 10.5 million of Loan Notes which will be transferred to ICH. In addition, the Company will issue to Falco Pescatore, the vendor of IMH, Warrants to subscribe for 112,500,000 Ordinary Shares. The consideration payable to Robby (UK) as the vendor of OspreyDeepClean is to be satisfied by the allotment to it of 35,714,285 Ordinary Shares.

The Acquisition is conditional on:

(a) the passing of the Resolutions;

(b) the approval of shareholders of InnoConcepts to the Acquisition being given in general meeting; and

(c) Admission.

Further details of the Loan Notes and the Warrants are set out in the Circular.

The 146,330,999 Ordinary Shares to be allotted to Robby (UK), ICH and MINT Investment in partial satisfaction of the consideration for the Acquisition are expected to be so allotted to Robby (UK), ICH and MINT Investment on 24 August 2005 and comprise the Acquisition Shares. The Acquisition Shares will, on Admission, rank pari passu in all respects with the Existing Ordinary Shares, including all rights to receive dividends and other distribution declared paid or made after the date of issue.

Further details of the Acquisition Agreement are set out in the Circular.

Lock-in Arrangements

The Existing Directors, the Proposed Directors, ICH, MINT Investment and Robby (UK) have undertaken pursuant to the terms of the Placing Agreement not to dispose of any of their Ordinary Shares (save in those limited circumstances referred to in the Circular and save (in the case of MINT Investment only) for the distribution by MINT Investment to its shareholders (other than Novem International) of up to 32 per cent. of MINT Investment's shareholding in the Company on Admission) until the later of the first anniversary of Admission and the publication of the audited results for the Company for the financial year ended 31 March 2006.

Information on the Vendor Group

Information on the Vendor Group and Concert Party is set out in the Circular.

Financial results for the year ended 31 March 2005

The financial results of the Company for the year ended 31 March 2005 were announced earlier today.

The full text of this announcement is set out in the Circular.

Strategy of the Enlarged Group

The Enlarged Group will from Admission offer innovative cleaning solutions and environmentally friendly flame retardant chemicals and products and a variety of industrial coatings which will have synergies with some of the products and services offered by existing investee companies.

Save for the Acquisition and the Board changes described in the introduction above, each of the members of the Concert Party and the Existing Directors have no plans materially to change the business of the Group.

Each of the members of the Concert Party and the Existing Directors believe the Enlarged Group will have a higher profile than which Flintstone has experienced to date and that the trading performance will provide a reference point to the value of the Group.

MINT Investment, ICH, Robby (UK), the Directors and the Proposed Directors have confirmed that the existing employment rights, including pension rights, of all employees of the Enlarged Group will be fully safeguarded.

Current trading and prospects

The Directors are encouraged by the recent developments in the investee companies. The Directors remain committed to enhancing shareholder value and realising gains from investments made in the last five years. Sine 31 March 2005 (the date to which the last audited results for the Company have been prepared) the Company has continued to trade at a loss (although pleasingly at a lower level of losses than was budgeted for).

Since 31 December 2004 (a date to which the last formative results for the companies to be acquired as part of the Acquisition have been prepared) companies to be acquired have incurred a small trading loss (as compared to a profit for the previous financial period).

Dividend Policy

To date the Company has not been in a position to declare dividends. The Board will review and determine the dividend policy the Company if and when the Company is in a position to declare a dividend.

Details of the Placing

The Company proposes to issue up to 14,285,714 Placing Shares by way of the Placing.

The Placing Shares will, on Admission, rank pari passu in all respects with the Existing Ordinary Shares, including all rights to receive dividends and other distributions declared paid or made after the date of issue.

The Placing is conditional, inter alia, on the Placing Agreement having become unconditional in all respects and not having been terminated in accordance with its terms. The Placing Agreement is conditional, inter alia, on passing of the Resolutions, the Acquisition Agreements having become unconditional and on Admission. It is expected that Admission will become effective and that dealings in the Placing Shares will commence at 8.00am on 25 August 2005 (or such later date, being not later than 1 September 2005, as Collins Stewart and the Company may agree).

Re-admission

The size of the Acquisition and consequent fundamental change in the Company's Business and departure from the Company's investment strategy give rise, inter alia, to the requirement that the Company apply for re-admission to AIM.

The City Code

The acquisition by the Company of IMH and OspreyDeepClean gives rise to certain considerations under the City Code. Brief details of the Panel, the City Code and the protections they afford to Shareholders are described below.

The City Code has not and does not seek to have, the force of law. It has, however, been acknowledged by both the UK government and other UK regulatory authorities that those who seek to take advantage of the facilities of the securities markets in the UK should conduct themselves in matters relating to takeovers in accordance with high business standards and so according to the City Code.

The City Code is issued and administered by the Panel. The City Code applies to all takeovers and merger transactions, however effected, where the offeree company is, inter alia, a listed or unlisted public company resident in the UK. Flintstone is such a company and its shareholders are entitled to the protections afforded by the City Code.

Pursuant to Rule 9 of the City Code, any person who acquires shares which, when taken together with shares already held by him or shares held or acquired by persons acting in concert with him, carry 30 per cent. or more of the voting rights of a company subject to the City Code, is normally required to make a general offer to all shareholders in the Company in cash to acquire the remaining shares in the company not already held by them at the highest price paid for any shares in the Company in the previous 12 months by the person required to make the offer or any person acting in concert with him.

Further, when any person, or group of persons acting in concert, holds shares which carry not less than 30 per cent. but not more than 50 per cent. of the voting rights of the company subject to the City Code, such person or persons may not normally acquire further shares which increase the percentage of the voting rights in the company held by them, without making a general offer to all shareholders in that company in cash to acquire the remaining shares in the company not already held by them at the highest price paid for any shares in the company in the previous 12 months by the person required to make the offer or any person acting in concert with him.

Under the City Code, persons acting in concert comprise persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition by any of them of shares in a company, to obtain or consolidate control of that company. The members of the Concert Party are acting in concert for the purposes of the City Code.

Following Admission and on completion of the Acquisition assuming the full Placing and the allotment of 1,428,571 Ordinary Shares to Collins Stewart, the Concert Party's shareholding will amount to approximately 62.70 per cent. of the Enlarged Share Capital which will be held as follows:



Name of Concert Party member A B C D E

Robby (UK) (1) 16.30% 10.72% 12.09% 16.08% 8.72%
Robby (UK) (2) 15.30% 10.28% 11.53% 15.18% 8.43%
ICH (1) 24.73% 16.27% 43.72% 24.40% 31.54%
ICH (2) 23.22% 15.60% 41.70% 22.43% 30.48%
MINT Investment (1) 25.76% 16.94% 19.09% 25.41% 13.78%
MINT Investment (2) 24.18% 16.25% 18.21% 23.87% 13.31%
Falco Pescatore (1) Nil 33.78% Nil Nil 27.47%
Falco Pescatore (2) Nil 32.39% Nil Nil 26.54%
Thomas Stuecken (1) (3) Nil Nil Nil 0.45% 0.24%
Thomas Stuecken (2) (3) Nil Nil Nil 0.42% 0.24%
Peter Teerlink (1) (3) Nil Nil Nil 0.25% 0.13%
Peter Teerlink (2) (3) Nil Nil Nil 0.23% 0.13%
Total Concert Holding Party (1) 66.79% 77.72% 74.90% 66.59% 81.89%
Total Concert Holding Party (2) 62.70% 74.53% 71.44% 62.57% 79.13%


Notes:

(1) Assuming no shares are issued in the Placing.

(2) Assuming the maximum total number of 14,285,714 Ordinary Shares are issued in the Placing.

(3) Details of options proposed to be granted to Thomas Stuecken and Peter Teerlink can be found in the Circular

A equals percentage of the Enlarged Share Capital held immediately on Admission.

B equals percentage of the issued Ordinary Share capital held in the event all the Warrants are exercised (and on the assumption no further Ordinary Shares are issued but for the Acquisition Shares and the Ordinary Shares issued on the exercise of those Warrants). The earliest date on which all the Warrants could be exercised is immediately following Admission.

C equals percentage of the issued Ordinary Share capital held in the event all the Loan Notes are converted (and on the assumption no further Ordinary Shares are issued but for the Acquisition Shares and the Ordinary Shares issued on the conversion of the Loan Notes). The earliest date on which all the Loan Notes could be converted is 1 January 2007.

D equals percentage of the issued Ordinary Share capital held in the event all the share options held by the Proposed Directors are exercised. The earliest date on which all the share options could be exercised is the date of Admission.

E equals percentage of the issued Ordinary Share capital held in the event all the Warrants are exercised and all the Loan Notes are converted and all the share options held by the Proposed Directors are exercised (and on the assumption no further Ordinary Shares are issued but for the Acquisition Shares and the Ordinary Shares issued on the exercise of the Warrants and on the conversion of the Loan Notes and the exercise of the share options). The earliest date on which all the Warrants could be exercised, all the Loan Notes could be converted and all the share options could be exercised is 1 January 2007.

MINT Investment, one of the members of the Concert Party which will receive certain Consideration Securities pursuant to the Reorganisation and the Acquisition, intends shortly after Admission to transfer certain of the Consideration Securities to certain third parties and further details in this regard are set out in the Circular.

Further information on the members of the Concert Party is set out in the Circular.

When a concert party holds over 50 per cent. in a company, no obligations normally arise from acquisitions by any member of the concert party. However, the acquisition by a single member of the concert party who holds less than 50 per cent. of shares sufficient to increase his holding to 30 per cent. or more may be regarded by the Panel as giving rise to an obligation to make an offer for the entire company.

The Panel has agreed however to waive the obligation to make a general offer that would otherwise arise on completion of the Acquisition, subject to the approval of independent Shareholders. Accordingly, Resolution 1 is being proposed at the EGM and will be taken on a poll. To be passed, Resolution 1 will require the approval of a simple majority of votes cast on that poll. No member of the Concert Party owns any Ordinary Shares and therefore will not vote on any of the Resolutions.

Following completion of the Acquisition, the members of the Concert Party will between them hold more than 50 per cent. of the issued voting share capital of the Company and (for so long as they continue to be treated as acting in concert) may accordingly increase their aggregate holding without incurring any further obligation under Rule 9 of the City Code to make a general offer. The Panel should be consulted, however, before any individual member of the Concert Party increases his holding to 30 per cent., or more or, if such holding is already not less than 30 per cent. (but not more than 50 per cent.) before any increase of such holding.

No member of the Concert Party has purchased Ordinary Shares in the 12 months preceding the date of this document. The Rule 9 Waiver will be invalid if purchases of Ordinary Shares are made by any one member of the Concert Party in the period between the date of this document and the EGM. Each member of the Concert Party has undertaken to the Company that he will not make any such purchases of Ordinary Shares.

Extraordinary General Meeting

An extraordinary general meeting of the Company has been convened for 11.30 a.m. (or as soon as practicable following conclusion of the AGM to be held earlier in the day) on 24 August 2005. At the EGM, Shareholders will be asked to consider the Resolutions which will be proposed as follows:

(1) an ordinary resolution (to be taken on a poll) to approve the Waiver;

(2) a special resolution (conditional upon Admission):

(a) to increase the authorised share capital in the Company to Pounds Sterling 25,000,000 by the creation of 400,000,000 new Ordinary Shares;

(b) to confer the authority on the directors of the Company pursuant to section 80 of the Act to allot relevant securities up to a nominal amount of Pounds Sterling 23,419,261.30 so as to enable allotment of the Acquisition Shares, the Placing Shares, the Ordinary Shares on the conversion of the Loan Notes, the Ordinary Shares on the exercise of the Warrants, and to allot other shares and securities in the future as set out below;

(c) to disapply the pre-emption rights conferred by section 89 of the Act for the purpose of the Acquisition the Placing, in connection with the grant of options under the Share Option Schemes, in connection with a proposed allotment of 1,428,571 Ordinary Shares to Collins Stewart and generally up to a maximum aggregate nominal amount of Pounds Sterling 1,166,881.40 (being approximately 10 per cent. of the issued ordinary share capital of the Company following the Acquisition and the Placing);

(d) to approve the terms and conditions of the Acquisition; and

(e) to change the name of the Company to Proventec Plc.

The Ordinary Resolution will be taken on a poll and, to be passed, requires a simple majority (in favour of the resolution) of the votes cast on that poll. In accordance with the requirements of the City Code no member of the Concert Party may vote in respect of this resolution.

To be passed, the Special Resolution requires a majority of not less than 75 per cent. of the Shareholders of the Company voting in person or on a poll by proxy in favour of this resolution at the EGM.

Following the Acquisition and the Placing, 266,623,715 Ordinary Shares will remain authorised but unissued (representing approximately 53.3 per cent. of the authorised ordinary share capital of the Company). Of this number, up to 21,192,742 Ordinary Shares will be reserved for the exercise of employee share options and other options granted by the Company pursuant to the Share Option Schemes, 75,000,000 to satisfy any conversion of the Loan Notes into Ordinary Shares and 112,500,000 to satisfy any exercise of the Warrants. The Directors and Proposed Directors consider that the remaining number of shares is a desirable margin to retain flexibility for the future.

The Directors have no present intention to allot any Ordinary Shares pursuant to the authority proposed to be granted to them at the EGM, save for the allotment of the Consideration Securities, the allotment of the Placing Shares, the allotment of Ordinary Shares in the event of share options being exercised and the allotment of Ordinary Shares to Collins Stewart.

Recommendation

The Existing Directors, who have been so advised by Collins Stewart, consider that Acquisition and the Waiver to be fair and reasonable and in the best interests of the Company and its Shareholders as a whole. In providing advice to the Existing Directors, Collins Stewart has taken into account the Existing Directors' commercial assessments. Accordingly, the Existing Directors recommend that you vote in favour of the Resolutions to be proposed at the EGM, as they (and their immediate families and connected persons) have irrevocably undertaken to do in respect of their own shareholdings, which in aggregate amount to 13.64 per cent., of the issued share capital of the Company.



EXPECTED TIMETABLE

2005
Publication date of the Circular 26 July
Latest time and date for receipt of
Forms of Proxy 11.30 a.m. on 22 August
Extraordinary General Meeting of
Innoconcepts 23 August
Annual General Meeting 11.00 a.m. on 24 August
Extraordinary General Meeting 11.30 a.m. on 24 August
Dealings on AIM expected to commence in
the enlarged issued share capital and,
where applicable, Placing Shares credited
to CREST 8.00 a.m. on 25 August
Completion of the Acquisition 25 August
Definitive Share Certificates despatched by 1 September


DEFINITIONS

The following definitions apply throughout this announcement unless otherwise stated or the context otherwise requires:

"Act" - the Companies Act 1985, as amended

"Acquisition" - the proposed acquisition by the Company of the entire issued share capital of IMH and the entire issued share capital of OspreyDeepClean

"Acquisition Agreements" - the conditional agreements dated 25 July 2005 between (1) Falco Pescatore, (2) the Company, and (3) ICH and (4) MINT Investment in relation to the acquisition of IMH; and between (1) Robby (UK), (2) the Company and (3) ICH in relation to the acquisition of OspreyDeepClean, details of both of which are set out in the Circular

"Acquisition Shares" - the 146,330,999 new Ordinary Shares to be allotted to Robby (UK), ICH and MINT Investment in part consideration for the Acquisition

"Admission" - the admission of the Acquisition Shares and the Placing Shares and the re-admission of the Existing Ordinary Shares to trading on AIM becoming effective

"AIM" - the Alternative Investment Market of the London Stock Exchange

"AIM Rules" - the rules published by the London Stock Exchange governing admission to and operation of AIM

"Articles" - the articles of association of the Company

"Board" or "Directors" - the board of directors of the Company as at the date of the Circular

"Capita IRG" - Capita IRG plc

"City Code" - the City Code on Takeovers and Mergers

"Collins Stewart" - Collins Stewart Limited

"Company" or "Flintstone" - Flintstone Technologies Plc

"Concert Party" - ICH, MINT Investment, Robby (UK), Thomas Stuecken, Falco Pescatore and Peter Teerlink in respect of which further information is set out in the Circular

"Consideration Securities" - the Acquisition Shares, the Loan Notes and the Warrants

"CREST" - the relevant system (as defined in the Regulations) in respect of which CRESTCo Limited is the Operator (as defined in the Regulations) in accordance with which securities may be held and transferred in uncertified form

"CRESTCo" - CRESTCo Limited, the operator of CREST

"CREST member" - A person who has been admitted by CRESTCo as a system-member (as defined in the Regulations)

"CREST participant" - A person who is, in relation to CREST a system-participant (as defined in the Regulations)

"CREST payment" - shall have the meaning given in the CREST Manual issued by CRESTCo

"CREST sponsor" - A CREST participant admitted to CREST as a CREST sponsor

"CREST sponsored member" - A CREST member admitted to CREST as a sponsored member (which includes all CREST Personal Members)

"EGM" or "Extraordinary General Meeting" - the extraordinary general meeting of the Company convened for 11.30 a.m. (or as soon as practicable following on from the AGM, to be held on the same day) on 24 August 2005 (or any adjournment thereof) notice of which is set out in the Circular

"EMI Scheme" - the Enterprise Management Incentive Share Option Scheme described in the Circular

"Enlarged Group" - the Group as enlarged by the Acquisition

"Enlarged Share Capital" - the issued share capital of the Company immediately on Admission

"Existing Directors" - Glyn Hirsch, David Chestnutt, Michael Hough, Ian Woodcock, Pavel Shashkov and Yuri Zhuk

"Existing Ordinary Shares" - the Ordinary Shares in issue at the date of the Circular

"Falco Pescatore" - Falco Pescatore B.V.

"Form of Proxy" - the form of proxy accompanying the Circular for use at the EGM

"FSMA" - the Financial Services and Markets Act 2000, as amended

"Group" - the Company and its subsidiaries

"hv" - Vicker hardness value, the standard method for measuring the hardness of metals

"ICH" - InnoCleaningConcepts Holding B.V.

"InnoCleaning" - the combined businesses of InnoCleaningConcepts Nederland BV and InnoCleaningManufacturing Services BV InnoCleaning Magma Holdings B.V.

"InnoCleaning Magma Holdings" or "IMH" - InnoCleaning Magma Holdings B.V.

"InnoCleaningConcepts" - InnoCleaningConcepts Nederland B.V., a wholly-owned subsidiary of IMH

"InnoConcepts" - InnoConcepts NV

"InnoManufacturing Services " - InnoManufacturing Services B.V., a wholly-owned subsidiary of IMH

"Issue Price" - 14 pence

"Loan Notes" - the Pounds Sterling 10.5 million 8.5 per cent. unsecured convertible loan note to be issued by the Company as part of the consideration for the acquisition of IMH

"Loan note instrument" - the loan note instrument to be entered into by the Company pursuant to which the Loan Notes are constituted

"London Stock Exchange" - London Stock Exchange plc

"Magma" - the combined businesses of Magma Applications B.V., Magma Industries B.V.

"Magma Applications" - Magma Applications B.V., a wholly-owned subsidiary of IMH

"Magma Industries" - Magma Industries B.V., a wholly-owned subsidiary of IMH

"Magma Research" - Magma Research B.V.

"Member Account ID" - the identification code or number attached to any member account in CREST

"MINT Investment" - MINT Investment B.V., being a recipient of part of the
Consideration Securities

"Novem International" - Novem International B.V.

"Official List" - the Official List of the UK Listing Authority

"Ordinary Shares" - ordinary shares of 5p each in the capital of the Company and "Ordinary Shares" shall be construed accordingly

"OspreyDeepClean" - OspreyDeepClean Limited

"Overseas Shareholders" - Shareholders who are resident in, or citizens of, countries other than the United Kingdom

"Panel" - the Panel on Takeovers and Mergers

"Participant ID" - the identification code or membership number used in CREST to identify a Particular CREST member or other CREST participant "Placing" the conditional placing by Collins Stewart, on behalf of the Company of the Placing Shares at the Issue Price

"Placing" - The conditional placing by Collins Stewart, on behalf of the Company of the Placing Shares at the Issue Price

"Placing Agreement" - the agreement dated 25 July 2005 between (1) the Company, (2) the Existing Directors and the Proposed Directors, (3) ICH, (4) MINT Investment and (5) Collins Stewart further details of which are set out the Circular

"Placing Shares" - up to 14,285,714 new Ordinary Shares to be allotted in connection with the Placing

"Proposed Directors" - Peter Teerlink and Thomas Stuecken

"Regulations" - the Uncertified Securities Regulations 2001

"Reorganisation" - the reorganisation pursuant to which, inter alia, Falco Pescatore, one of the Vendors, acquired (amongst other things) the Reorganisation Group from MINT Investment and ICH and then transferred the Reorganisation Group to IMH, a wholly-owned subsidiary of Falco Pescatore B.V. in consideration for the Consideration Securities, such consideration to be settled upon Admission occurring

"Reorganisation Group" - Magma Applications, Magma Industries, InnoCleaningConcepts and InnoManufacturing Services

"Resolutions" - the resolutions to be proposed at the EGM, notice of which is set in the Circular

"Robby (UK)" - Robby (UK) Limited

"2001 Share Option Scheme" - the employee share option scheme referred to in the Circular

"Share Option Schemes" - together the EMI Scheme and the 2001 Share Option Scheme

"Shareholders" - holders of Ordinary Shares

"Uncertified" or "in uncertified form" - recorded in the register as being held in uncertified form in CREST and title to which, by virtue of the Regulations, may be transferred by means of CREST

"UK" or "United Kingdom" - the United Kingdom of Great Britain and Northern Ireland

"UK Listing Authority" - the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of FSMA, including, where the context permits, any committee, employee, officer or servant to whom any functions of the UK Listing Authority may from time to time be delegated

"US" or "United States" - the United States of America, its territories and possessions of any state of the United States of America and the District of Columbia

"US$" - US dollars

"Vendor Directors" - Alfred Langerak and Peter Teerlink, the directors of Novem International

"Vendor Group" - Novem International, ICH and MINT Investment together with the respective subsidiaries of each of ICH and MINT Investment

"Vendors" - Falco Pescatore (the present owner of IMH) and Robby (UK) (the present owner of OspreyDeepClean)

"Waiver" - the waiver by the Panel of the requirement on the Concert Party to make a general offer under Rule 9 of the City Code which would otherwise (absent the waiver) arise on completion of the Acquisition and the Placing

"Warrant Deed Poll" - the warrant deed poll to be entered into by the Company pursuant to which the warrants are constituted

"Warrants" - the warrants to subscribe for 112,500,000 Ordinary Shares to be issued by the Company to Falco Pescatore as part of the consideration for the acquisition of IMH

Collins Stewart, which is regulated in the United Kingdom by The Financial Services Authority, is nominated adviser and broker to the Company and will act as nominated adviser and broker to the Company following Re-Admission and no one else, and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Collins Stewart or for providing advice in relation to the matters contained in this announcement or any matter concerning the Proposals or Admission. The responsibility of Collins Stewart as nominated adviser and broker to the Company before and after Re-Admission are and will be owed solely to the London Stock Exchange.

This Announcement does not constitute an offer to sell or an invitation to subscribe for, or the solicitation of an offer to buy or subscribe for New Ordinary Shares in any jurisdiction where such an offer or solicitation is unlawful and is not for distribution in or into the United States, Canada, Japan, Australia, Ireland or South Africa. The New Ordinary Shares have not been, and will not be registered under the United States Securities Act of 1933 (as amended) or under the applicable laws of Canada, Japan, Australia, Ireland or South Africa and, subject to certain exceptions, may not be offered for sale or subscription, or sold or subscribed, directly or indirectly, within the United States, Canada, Japan, Australia, Ireland or South Africa or to or by any national, resident or citizen of such countries. The distribution of this announcement in other jurisdictions may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdictions. No person is authorised, in connection with the Proposals, to give any information or make any representation other than as contained in this announcement and, if given or made, such information or representation must not be relied upon as having been authorised by the Company or Collins Stewart or their respective directors.

Other than shareholders of Flintstone Technologies Plc, the Admission Document dated 26 July 2005 (which, inter alia, incorporates a circular to Shareholders) ("the Circular") is directed only at persons having professional experience in matters relating to investments (being "investment professionals" within the meaning of article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001) and the investments or investment activities to which the Circular relates are available only to such persons and will be engaged in only with such persons. Persons who do not have professional experience in matters relating to investments (and who are not Shareholders) should not rely on the Circular nor take any action upon it, but should return it immediately to Collins Stewart, 88 Wood Street, London EC2V 7QR.

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