Investors

Sondrel (Holdings) plc, the fabless semiconductor business providing turnkey services in the design and delivery of 'application specific integrated circuits' ("ASICs") and 'system on chips' ("SoCs") for leading global technology brands, is pleased to announce its proposed admission to trading on AIM ("Admission") and proposed placing, conditional on, amongst other things, Admission (the "Placing") of 36,363,636 new ordinary shares (the "Placing Shares") of £0.001 pence each ("Ordinary Shares") at a price of 55.0 pence per Ordinary Share (the "Placing Price").

The Placing received strong support from institutional investors and will raise a total of £20.0 million, before expenses.  Cenkos Securities plc ("Cenkos") is acting as Nominated Adviser, sole broker and sole bookrunner to the Company.

The Company is seeking Admission in order to raise new equity to:

• increase the number of engineers it employs;
• invest further in developing its Architecting the Future IP platforms;
• accelerate sales in the USA and in other geographies; and
• strengthen the Group's balance sheet in, inter alia, the delivery of project based designs and customer supply management contracts.

Admission will also help to raise the Group's profile as a leading designer and deliverer of complex ASICs/SoCs.

KEY HIGHLIGHTS

Sondrel is a UK founded and headquartered fabless semiconductor business providing turnkey services in the design and delivery of complex, high end ASICs and SoCs for leading global technology brands. Sondrel's capabilities are provided to customers seeking competitive advantage by including customised ASIC/SoC devices enabling differentiation of their end products when addressing fast growth technology megatrends.

Delivering designs down to 5 nanometre process nodes and is now working on 3 nanometres

• This level of engineering capability is limited to Sondrel and a small number of Asian competitors and positions Sondrel to benefit from megatrends driving the increasing use of ASICs globally and the production of products utilising increasingly complex design geometries.
• Positioned to benefit from the geopolitical and business drive to shorten geographically stretched and complex supply chains.

Geographic reach in fast-growth end markets

• Sondrel provides leading edge ASIC/SoC designs to a global customer base in advanced end markets with significant structural growth drivers including high performance computing, automotive, artificial intelligence, VR/AR, video analytics, image processing, mobile networking and data centres.
• Previous designs have been included in well-known products such as Apple iPhone, Sony PlayStation, Meta's Oculus Quest virtual reality headset, Samsung, Google and Sony smartphones, JVC prosumer camcorders and Tesla and Mercedes-Benz cars.
  

Deeply rooted within the semiconductor industry

• Established relationships with semiconductor IP and electronic design automation ("EDA") providers, materials and equipment companies and fabrication partners. Sondrel has a long-standing partnership with and capability approval from Arm; is one of only 22 global partners in TSMC's Design Centre Alliance; and has comparable relationships with Samsung, and Global Foundries.
• Sondrel is able to provide customers with the ability to de-risk the design of ASICs/SoCs through the use of Sondrel's "Architecting the Future" IP platforms.

Full-service product for customers seeking a reliable route to market

• Sondrel's customers are able to differentiate their end products with Sondrel's market leading design capabilities at the forefront of technology whilst also leveraging Sondrel's expertise and relationships throughout the semiconductor industry. In doing so, Sondrel's customers are able to remove the requirements for multiple counterparties in the ASIC/SoC supply chain and for supply chain management.
• With OEMs and OEM suppliers increasingly focused on semiconductor supply chain resilience and efficiency, customers are able to contract Sondrel as a single counterparty in the design, supply chain management and production of ASIC/SoC devices.

Strong track record

• Sondrel has grown over a period of more than 20 years and delivers complex ASIC/SoC designs for a wide range of leading multi-national corporate customers.
• Sondrel has delivered revenue growth from inception to 31 December 2021 at a CAGR of 20 per cent. As at 31 July 2022, the Group's pipeline of revenue opportunities stood at more than £300 million[1] excluding potentially material related production and supply revenues.

Clear growth strategy

• The Directors have ambitions to grow revenues to over £100 million in the medium term.
• Sondrel's organic growth strategy is focused on increasing its engineering headcount and investing in IP to further enhance its competitive position, accelerating its growth in key geographies including the USA and Asia.

Highly skilled and experienced team

• Sondrel has a team of 137 engineers that are located across 5 design centres globally; the UK, USA, China, India and Morocco. This enables Sondrel to be one of only a handful of companies worldwide with the scale, capability and strength of industry relationships to deliver projects in leading technologies.
• Sondrel has a proven and experienced founder-led management team.

Admission and commencement of dealings on AIM are expected to take place at 8.00 a.m. on 21 October 2022, under the ticker "SND".  Based on the Placing Price, the market capitalisation of the Company will be approximately £48.1 million on Admission.  On Admission, the Company will have 87,461,772 Ordinary Shares in issue and a free float of approximately 41.1 per cent.

CURRENT TRADING AND PROSPECTS

Since the year ended 31 December 2021, the Group has traded strongly in receiving new customer orders with an aggregate value of £19.4 million in the six months ended 30 June 2022, including securing and commencing work on a material turnkey engagement in Q2 2022 for a multi-billion dollar European customer. Unaudited Group revenues generated in the six month period ended 30 June 2022 of £8.0 million were significantly ahead of the prior period, with full year revenues generated in the full year ended 31 December 2021 of £8.2 million.

Given the positive momentum in relation to the Group's evolving business model and the Directors' positive assessment of the strength of the Group's growth strategy, the Directors have confidence in the Group's prospects for the current and upcoming financial years.

Graham Curren, Chief Executive Officer of Sondrel, commented:

"We are delighted to announce our intention to float on AIM as this represents a new and exciting chapter in the Group's history, and the first material external investment event in our history.

Sondrel is at the cutting edge of our industry, delivering designs at 5 nanometres and below, a level of engineering that only a handful of companies can match.  We are well positioned to benefit from a number of industry and geopolitical megatrends and believe we can be a true UK technology success story as a public company.

The IPO will provide us with the chance to raise the Group's profile as a leading designer and deliverer of complex ASICs/SOCs and allow the Group to reach its ambition of £100 million of annual revenue in the medium term. The funds raised in the IPO will be used to increase the number of engineers we employ, invest further in developing our Architecting the Future IP platforms, accelerate growth in the USA and other geographies and strengthen the Group's balance sheet.

I am incredibly proud to have reached this milestone and would like to thank all of our amazing team that made this possible."

FOR FURTHER ENQUIRIES:

The ISIN of the Ordinary Shares will be GB00BJN54579, the SEDOL of the Ordinary Shares BJN5457 and the Company's LEI number 984500D6E7L2A9A54935.

To find out more, please visit: www.sondrel.com

BOARD OF DIRECTORS

Executive Directors

Graham Curren - Chief Executive Officer (aged 58)

Graham founded Sondrel in 2002 after identifying a gap in the market for an international company specialising in complex digital IC design.

Prior to establishing Sondrel, Graham graduated in Electronic Engineering from Leeds University and worked in both ASIC design and manufacturing before joining electronic design automation ("EDA") company, Avant Corporation. There, he managed the technical and marketing teams across EMEA, supporting products across the whole range of IC design.

In 2010, Graham accompanied the UK prime minister at the time, David Cameron, in his business delegation to China. He also acted as a non-executive director for the China-Britain Business Council between 2011 and 2017.

Jose ("Joe") Lopez - Chief Financial Officer (aged 57)

Joe joined Sondrel in April 2019. His career began as a Business Services Manager for Grant Thornton LLP between 1993 and 1999 where he qualified as a Chartered Accountant.

After leaving Grant Thornton, Joe worked in a variety of directorship roles and has over 12 years' experience as a Chief Financial Officer, ranging from start-ups to corporate multi nationals. Prior to joining Sondrel, Joe was Finance Director of ShopperTrak Limited, a provider of data analytics aimed at helping retailers improve their in-store customer experience, between 2012 and 2017, before joining Airways Aviation Academy Limited as Chief Financial Officer for two years.

Non-Executive Directors

Nigel Vaughan - Independent Non-Executive Chairman (aged 71)

Nigel joined the board of Sondrel in 2011. He has 30 years of international Board level experience acting for businesses in both an executive and non-executive capacity. He has held Board level positions in businesses of varying sizes, including UK public limited companies and US multinationals, and he also built an early-stage business, Sifam Limited, that was sold for US$100 million after 7 years.

He most recently acted as non-executive director of Quantex-Arc Limited between 2018 and 2021. In addition to founding and owning a management consulting business, Vaughan Management Solutions Limited, Nigel currently also acts as Chairman to the Global Advisory Board of the Walsn Group.

Gordon Orr - Independent Non-Executive Director (aged 60)

Gordon currently acts as a Senior Advisor to management consultancy firm, McKinsey & Company, having previously acted as Chairman of its Asia division. Gordon also sits on the boards of Chinese multinational technology company, Lenovo Group Limited, and conglomerate, Swire Pacific Limited. In addition, he works with the CEOs of a number of China's globalising companies, is an advisor to Oxford University and Harvard Business School in Asia and is a Board Member of the China Britain Business Council.

Gordon spent the majority of his career at McKinsey & Company having joined in 1986. He opened McKinsey's Beijing office in the early 1990s and led its Greater China practice for many years and McKinsey Asia between 2009 and 2014. Gordon was on McKinsey's global board of directors between 2003 and 2015 with responsibilities for Asia, Governance and Risk, before retiring from the firm.

Sherry Madera - Independent Non-Executive Director (aged 48)

Sherry is currently Mastercard's Senior Vice President of Global Public Policy and Government Affairs. A Canadian and British national, Sherry joined Mastercard from the London Stock Exchange Group where she held the position of Chief Industry & Government Affairs Officer. She has also worked for the City of London Corporation where she was Economic Ambassador and Special Advisor to Asia, and also acted as a Minister-Counsellor at the British Embassy in Beijing, responsible for promoting trade and investment between the UK and China.

Recognised as an expert on green and sustainable finance as well as on data policy, Sherry continues to hold the role of Chair of the Future of Sustainable Data Alliance, a global alliance dedicated to working with the financial industry to use data to build a sustainable future.

Adrian Carey - Independent Non-Executive Director (aged 64)

Adrian has more than 35 years of board experience across listed, AIM, private equity, venture backed and private businesses, primarily in the technology, legal and educational service sectors. Adrian acted as CEO for three companies over a 17 year period, prior to which he was a finance director, venture capitalist and Chartered Accountant. He most recently acted as Executive Chairman for AIM quoted Melorio plc before being appointed as a non-executive director until it was bought by Pearson plc in June 2010.

Adrian has had significant additional non-executive experience, including acting as a non-executive director for Impellam Group and, more recently, Oxford Metrics plc, both quoted on AIM. He currently acts as a non-executive director for Blacktrace Holdings Limited.

Important Legal Information

The contents of this announcement, which has been prepared by and is the sole responsibility of the Company, have been approved by Cenkos Securities Plc ("Cenkos") solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended).  Cenkos, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is advising the Company and no one else in relation to the proposed Issue and Admission (each as defined below), and will not be responsible to anyone other than the Company for providing the protections afforded to the clients of Cenkos or for providing advice in relation to the Issue or Admission or any transaction or arrangement referred to in this announcement.

Neither this announcement nor any copy of it may be made or transmitted into the United States, or distributed, directly or indirectly, in whole or in part in the United States. Neither this announcement nor any copy of it may be made or transmitted directly or indirectly, in whole or in part into Australia, Canada, Japan or the Republic of South Africa or any other jurisdiction where such distribution is unlawful ("Restricted Jurisdiction") or to any persons in any of those jurisdictions or to U.S. persons, as defined in Regulation S ("Regulation S") under the US Securities Act of 1933, as amended (the "Securities Act"), except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of the securities laws of any Restricted Jurisdiction. The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions. This announcement does not constitute, or form part of, an offer to sell, or a solicitation of an offer to purchase, any securities in any Restricted Jurisdiction or in any other jurisdiction in which such offer or solicitation is unlawful.

The Ordinary Shares of the Company have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state of the United States and may not be offered, sold, resold, transferred or delivered, directly or indirectly, in the United States, or to, or for the account or benefit of, U.S persons (as defined in Regulation S), except pursuant to an applicable exemption from or in a transaction not subject to, the registration requirements of the Securities Act. No public offering of securities in the Company is being made in the United States.   The document has not been approved by any competent regulatory or supervisory authority. In addition, the Company has not been and will not be registered under the US Investment Company Act of 1940, as amended, and the recipient of this announcement will not be entitled to the benefit of that act.

This communication is only addressed to, and directed at, persons in member states of the European Economic Area (other than the United Kingdom) who are "qualified investors" within the meaning of Article 2(e) of the Prospectus Regulation ("Qualified Investors"). For the purposes of this provision, the expression "Prospectus Regulation" means Regulation (EU) 2017/1129. In addition, in the United Kingdom, this communication is being distributed only to, and is directed only at, Qualified Investors (as defined in the version of the Prospectus Regulation which forms part of UK domestic law pursuant to the European Union (Withdrawal) Act 2018): (i) who have professional experience in matters relating to investments who fall within the definition of "investment professional" in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended, (the "Order") or (ii) who are high net worth companies, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) (a) to (d) of the Order, and (iii) other persons to whom it may otherwise lawfully be communicated (all such persons together being referred to as "relevant persons"). Any investment or investment activity to which this communication relates is available only to and will only be engaged in with such persons. This communication must not be acted on or relied on in any member state of the European Economic Area other than the United Kingdom, by persons who are not Qualified Investors. Prospective investors will be required to read and understand the section entitled "Risk Factors" in the Admission Document, once available.

The information in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. 

This announcement does not constitute a recommendation concerning the Admission and no information in this announcement should be construed as providing financial, investment or other professional advice and each prospective investor should consult its own legal, business, tax and other advisers in evaluating the investment opportunity. The merits or suitability of any securities of the Company must be independently determined by the recipient on the basis of its own investigation and evaluation of the Company. Any such determination should involve, among other things, an assessment of the legal, tax, accounting, regulatory, financial, credit and other related aspects of the securities of the Company.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, strategy, plans, proposed acquisitions and objectives, are forward-looking statements. Forward-looking statements are subject to risks and uncertainties and, accordingly, the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, such forward looking statements. These factors include but are not limited to those described in the Admission Document and before subscribing for or purchasing any shares in the Company, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Admission Document in the section entitled "Risk Factors". New factors may emerge from time to time that could cause the Company's business not to develop as it expects, and it is not possible for the Company to predict all such factors. Given these uncertainties, prospective investors are cautioned not to place any undue reliance on such forward-looking statements except as required by law. These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. The Company and Cenkos expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000 (as amended), the Prospectus Regulation Rules of the Financial Conduct Authority, the EU Market Abuse Regulation (2014/596/EU) as it applies in the UK by virtue of the European Union (Withdrawal) Act 2018 or other applicable laws, regulations or rules.  

The information and opinions contained in this announcement are provided as at the date of the announcement and are subject to change without notice.  Neither the Company nor Cenkos , or any of their respective parents or subsidiary  undertakings, or the subsidiary undertakings of any such parent undertakings, or any of such person's respective directors, officers, employees, agents, affiliates or advisers or any other person  accepts (save where required by law) any responsibility or liability whatsoever for/or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

The date of Admission may be influenced by a variety of factors which include market conditions.  The Company may decide not to go ahead with the Admission and there is therefore no guarantee that the Admission Document will be published or that Admission will occur. Potential investors should not base their financial decision on this announcement. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested.

Persons considering making investments should consult an authorised person specialising in advising on such investments. The value of shares can decrease as well as increase. Potential investors should consult a professional advisor as to the suitability of a possible investment.

Nothing contained herein constitutes or should be construed as (i) investment, tax, accounting or legal advice; (ii) a representation that any investment or strategy is suitable or appropriate to a potential investor's individual circumstances; or (iii) a personal recommendation to a potential investor or any other person.

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