NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, THE PEOPLE'S REPUBLIC OF CHINA, HONG KONG, THE REPUBLIC OF INDIA, JAPAN, REPUBLIC OF KOREA, MALAYSIA, MEXICO, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, SINGAPORE, SWITZERLAND, TAIWAN OR ANY OTHER JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT

THIS ANNOUNCEMENT, WHICH CONTAINS INSIDE INFORMATION, IS AN ADVERTISEMENT AND DOES NOT CONSTITUTE A PROSPECTUS OR PROSPECTUS EQUIVALENT DOCUMENT. NOTHING HEREIN SHALL CONSTITUTE AN OFFERING OF NIL PAID RIGHTS, FULLY PAID RIGHTS OR NEW SHARES.

NOTHING IN THIS ANNOUNCEMENT SHOULD BE INTERPRETED AS A TERM OR CONDITION OF THE RIGHTS ISSUE. ANY DECISION TO PURCHASE, SUBSCRIBE FOR, OTHERWISE ACQUIRE, SELL OR OTHERWISE DISPOSE OF ANY NIL PAID RIGHTS, FULLY PAID RIGHTS OR NEW SHARES MUST BE MADE ONLY ON THE BASIS OF THE INFORMATION CONTAINED IN AND INCORPORATED BY REFERENCE INTO THE PROSPECTUS ONCE PUBLISHED. COPIES OF THE PROSPECTUS WILL, FOLLOWING PUBLICATION, BE AVAILABLE FROM THE REGISTERED OFFICE OF LAIRD PLC AND ON ITS WEBSITE AT WWW.LAIRD-PLC.COM.

28 February 2017

Laird PLC (the "Company")

4 for 5 fully underwritten £185 million Rights Issue

Further to the announcement on 2 December 2016, the Company announces a fully underwritten rights issue to raise approximately £185 million (before expenses) and that a Prospectus containing full details of the Rights Issue is expected to be made available on Laird's website (http://www.laird-plc.com/) later today. Laird's full year results for the financial year ended 31 December 2016 have also been released today in a separate announcement.

Details of the Rights Issue

·     4 for 5 fully underwritten Rights Issue of 217,156,300 New Shares to raise gross proceeds of approximately £185 million (approximately £175 million net of expenses).

·     The issue price of 85 pence per New Share represents:

o  a discount of 51.4% to the Closing Price on 27 February 2017 (being the last Business Day prior to the date of this announcement); and

o  a 37.0% discount to the theoretical ex-rights price of 134.86 pence per New Share calculated by reference to the Closing Price on the same basis.

·    The Rights Issue, which is subject to shareholder approval, is fully underwritten by J.P. Morgan Cazenove and Numis.

Reasons for the Rights Issue and use of proceeds

·     On 2 December 2016, in order to proactively address the Group's financial position and to significantly reduce its structural indebtedness, the Board announced it was targeting a capital structure of between 1.0x to 2.0x net debt to Covenant EBITDA in the medium term and indicated that it intended to undertake a Rights Issue in the first quarter of 2017.

·     The Board also announced that it was in discussions with the Lenders under its Existing Financing Arrangements. Whilst Laird did not believe that it would breach any of the covenants under those arrangements at 31 December 2016 (and in fact has not breached them), it successfully obtained amendments to the Existing Financing Arrangements to ensure that was the case as at 31 December 2016. Ultimately, Laird was in compliance with the covenants as of 31 December 2016.

·     However, these amendments are only a short-term solution that will not fundamentally address the Group's balance sheet and capitalisation concerns over the longer term. The leverage covenants will be tested at 30 June 2017 and thereafter at their original levels.

·     The net proceeds of approximately £175 million will therefore be used to reduce borrowings under Laird's revolving credit facilities and create sufficient covenant headroom going forward such that the Company will not need to seek any further amendments to the Existing Financing Arrangements for subsequent testing dates.

·     In addition, the benefits of a strengthened financial position for Laird are that it:

o  enables the continued investment in 2017 to deliver the previously announced operational improvement programme and the associated benefits of annualised savings of at least £15 million (US$20 million) from 2018 with £12 million (US$15 million) expected in 2017, according to unaudited Company estimates;

o  enables the continued investment in opportunities for future growth, in particular in relation to the CVS division which was formed at the beginning of 2017 and in which the Group is targeting revenue in excess of £405 million (US$500 million) by 2020 with improving profitability, according to unaudited Company estimates;

o  provides the financial strength required to demonstrate Laird's ability to support customers; and

o  provides a strong foundation from which to assess the optimal route to maximise shareholder value in Performance Materials and particularly precision metals.

Update on current trading

Trading for 2016 was in line with the Board's expectations as set out in the statements made on 19 October 2016, 2 December 2016 and 24 January 2017.

Despite the challenging conditions leading to a disappointing performance in 2016, there are a number of factors that leave Laird well placed in 2017. These factors include the completed integration of Novero, which the Directors expect to deliver modest profitability in 2017, the previously announced operational improvement programme and associated annualised cost-savings, and the actions that have been taken to gradually improve operational efficiency and profitability in the Performance Materials division, specifically within the precision metals business. In 2017, the Group expects interest costs of approximately £12 million, exceptional items including an approximately £5 million charge to operating (loss)/profit and an approximately £30 million cash cost relating primarily to the divisional reorganisation and operational improvement programme, an effective tax rate of between 28-30%, capital expenditure of approximately £40 million and capitalised research and development expenditure of approximately £24 million.

The Directors believe that the need for wireless connectivity and increasing functionality is the driving force behind connecting the home, automobile, outside environment and other networks together and that the demand for more powerful devices and ubiquitous connectivity within the electronics environment creates opportunities to underpin a return to long-term growth of the business.

Tony Quinlan, Chief Executive Officer, said:

    "The Rights Issue announced today will allow the Company to reduce gearing in line with the medium term capital structure target set out in the December trading update. This strengthened balance sheet position will provide us with the foundations necessary to be able to return the Company to growth, enabling us to continue to invest in our ongoing operational improvement initiatives whilst also leaving Laird well placed to invest in future growth opportunities and take advantage of the strong underlying trends we see in many of our key end markets."

Indicative abridged timetable

Prospectus

·     The Prospectus containing full details of the Rights Issue is expected to be made available on Laird's website (http://www.laird-plc.com/) later today.

·     The Prospectus will be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/nsm following publication.

The preceding summary should be read in conjunction with the full text of the following announcement and its appendices, together with the Prospectus. Capitalised terms used in this announcement shall have the meanings set out in the Appendix.

Enquiries:

IMPORTANT NOTICE

This announcement has been issued by and is the sole responsibility of Laird. The information contained in this announcement is for background purposes only and does not purport to be full or complete.  No reliance may or should be placed by any person for any purpose whatsoever on the information contained in this announcement or on its accuracy or completeness.  The information in this announcement is subject to change.

This announcement, which contains inside information, is not a prospectus but an advertisement and investors should not acquire any Nil Paid Rights, Fully Paid Rights or New Shares referred to in this announcement except on the basis of the information contained in the Prospectus to be published by Laird in connection with the Rights Issue.

A copy of the Prospectus will, following publication, be available from the registered office of Laird and on Laird's website at www.laird-plc.com. Neither the content of Laird's website nor any website accessible by hyperlinks on Laird's website is incorporated in, or forms part of, this announcement. The Prospectus will provide further details of the New Shares, the Nil Paid Rights and the Fully Paid Rights being offered pursuant to the Rights Issue.

This announcement does not contain or constitute an offer for sale or the solicitation of an offer to purchase securities in the United States. The securities referred to herein have not been and will not be registered under the Securities Act or with any securities regulatory authority of any state or jurisdiction of the United States, and may not be offered or sold in the United States absent registration under the Securities Act or an available exemption from, or transaction not subject to, the registration requirements of the Securities Act. There will be no public offer of the securities in the United States. None of the New Shares, the Nil Paid Rights, the Fully Paid Rights, the PAL or the Form of Proxy, this announcement or any other document connected with the Rights Issue has been or will be approved or disapproved by the United States Securities and Exchange Commission or by the securities commissions of any state or other jurisdiction of the United States or any other regulatory authority, and none of the foregoing authorities or any securities commission has passed upon or endorsed the merits of the offering of the New Shares, the Nil Paid Rights, the Fully Paid Rights, the PAL, the Form of Proxy or the accuracy or adequacy of this announcement or any other document connected with the Rights Issue. Any representation to the contrary is a criminal offence in the United States.

This announcement is for information purposes only and is not intended to and does not constitute or form part of any offer or invitation to purchase or subscribe for, or any solicitation to purchase or subscribe for, Nil Paid Rights, Fully Paid Rights or New Shares or to take up any entitlements to Nil Paid Rights in any jurisdiction. No offer or invitation to purchase or subscribe for, or any solicitation to purchase or subscribe for, Nil Paid Rights, Fully Paid Rights or New Shares or to take up any entitlements to Nil Paid Rights will be made in any jurisdiction in which such an offer or solicitation is unlawful. The information contained in this announcement is not for release, publication or distribution to persons in the United States or any other Excluded Territory, and should not be distributed, forwarded to or transmitted in or into any jurisdiction, where to do so might constitute a violation of local securities laws or regulations.

The Nil Paid Rights, the Fully Paid Rights, the New Shares and the PALs have not been and will not be registered under the Securities Act or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States except pursuant to an applicable exemption from or in a transaction not subject to the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offer of the Nil Paid Rights, the Fully Paid Rights or the New Shares in the United States.

The distribution of this announcement into jurisdictions other than the United Kingdom may be restricted by law, and, therefore, persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws of such jurisdiction. In particular, subject to certain exceptions, this announcement, the Prospectus (once published) and the Provisional Allotment Letters (once printed) should not be distributed, forwarded to or transmitted in or into the United States or any other Excluded Territory.

Recipients of this announcement and/ or the Prospectus should conduct their own investigation, evaluation and analysis of the business, data and property described in this announcement and/or if and when published the Prospectus.  This announcement does not constitute a recommendation concerning any investor's options with respect to the Rights Issue. The price and value of securities can go down as well as up. Past performance is not a guide to future performance. The contents of this announcement are not to be construed as legal, business, financial or tax advice. Each Shareholder or prospective investor should consult his, her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice.

Notice to all investors

J.P. Morgan Securities plc (which conducts its UK investment banking services as "J.P. Morgan Cazenove") is authorised in the United Kingdom by the PRA and regulated in the United Kingdom by the FCA and the PRA. N M Rothschild & Sons Limited ("Rothschild") and Numis Securities Limited ("Numis") are each authorised and regulated in the United Kingdom by the FCA. J.P. Morgan Cazenove, Numis and Rothschild are acting exclusively for Laird and are acting for no one else in connection with the Rights Issue and will not regard any other person as a client in relation to the Rights Issue and will not be responsible to anyone other than Laird for providing the protections afforded to their respective clients, nor for providing advice in connection with the Rights Issue or any other matter, transaction or arrangement referred to in this announcement.

Apart from the responsibilities and liabilities, if any, which may be imposed on J.P. Morgan Cazenove and Rothschild in their capacities as Joint Sponsors by the FSMA, none of J.P. Morgan Cazenove, Numis or Rothschild accept any responsibility or liability whatsoever and make no representation or warranty, express or implied, for the contents of this announcement, including its accuracy, fairness, sufficiency, completeness or verification or for any other statement made or purported to be made by it, or on its behalf, in connection with Laird or the Nil Paid Rights, Fully Paid Rights, PALs, New Shares or the Rights Issue and nothing in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future. Each of J.P. Morgan Cazenove, Numis and Rothschild accordingly disclaims to the fullest extent permitted by law all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to above) which it might otherwise have in respect of this announcement or any such statement. Each of J.P. Morgan Cazenove, Numis and Rothschild and/or their affiliates provides various investment banking, commercial banking and financial advisory services from time to time to Laird.

No person has been authorised to give any information or to make any representations other than those contained in this announcement,  the Prospectus and the PAL and, if given or made, such information or representations must not be relied on as having been authorised by Laird or J.P. Morgan Cazenove, Numis and Rothschild. Subject to the Listing Rules, the Prospectus Rules and the Transparency Rules of the Financial Conduct Authority and the Disclosure Requirements, the issue of this announcement shall not, in any circumstances, create any implication that there has been no change in the affairs of Laird since the date of this announcement or that the information in it is correct as at any subsequent date.

J.P. Morgan Cazenove, Numis and their respective affiliates, acting as investors for their own accounts, may, in accordance with applicable legal and regulatory provisions, engage in transactions in relation to the Nil Paid Rights, the Fully Paid Rights, the New Shares and/or related instruments for their own account for the purpose of hedging their underwriting exposure or otherwise. Accordingly, references in the Prospectus to the Nil Paid Rights, Fully Paid Rights, PALs or New Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, J.P. Morgan Cazenove, Numis and any of their respective affiliates acting as investors for their own accounts. Except as required by applicable law or regulation, J.P. Morgan Cazenove and Numis do not propose to make any public disclosure in relation to such transactions.

Cautionary statement regarding forward-looking statements

This announcement contains forward-looking statements, including with respect to financial information, that are based on current expectations or beliefs, as well as assumptions about future events. These forward-looking statements can be identified by the fact that they do not relate only to historical or current facts. Forward-looking statements often use words such as "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "will", "may", "should", "would", "could", "is confident", or other words of similar meaning. Undue reliance should not be placed on any such statements because they speak only as at the date of this announcement and, by their very nature, they are subject to known and unknown risks and uncertainties and can be affected by other factors that could cause actual results, and Laird's plans and objectives, to differ materially from those expressed or implied in the forward-looking statements.

There are a number of factors which could cause actual results to differ materially from those expressed or implied in forward-looking statements. Among the factors that could cause actual results to differ materially from those described in the forward-looking statements are; increased competition, the loss of or damage to one or more key customer relationships, changes to customer ordering patterns, delays in obtaining customer approvals for engineering or price level changes, the failure of one or more key suppliers, the outcome of business or industry restructuring, the outcome of any litigation, changes in economic conditions, currency fluctuations, changes in interest and tax rates, changes in raw material or energy market prices, changes in laws, regulations or regulatory policies, developments in legal or public policy doctrines, technological developments, the failure to retain key management, or the key timing and success of future acquisition opportunities or major investment projects.

You are advised to read the Prospectus when published and the information incorporated by reference therein in their entirety, and, in particular, the section of the Prospectus headed "Risk Factors", for a further discussion of the factors that could affect the Group's future performance and the industry in which it operates. In light of these risks, uncertainties and assumptions, the events described in the forward looking statements, including statements regarding prospective financial information, in this announcement may not occur. These statements are not fact and should not be relied upon as being necessarily indicative of future results, and readers of this announcement are cautioned not to place undue reliance on the forward-looking statements, including those regarding prospective financial information.

No statement in this announcement is intended as a profit forecast for Laird for 2017 and no statement in this announcement should be interpreted to mean that statutory operating (loss)/profit or underlying operating profit before tax for the current or future financial years would necessarily be above a minimum level, or match or exceed the historical published operating profit or set a minimum level of operating profit.

Neither the Company nor any of J.P. Morgan Cazenove, Numis or Rothschild are under any obligation to update or revise publicly any forward-looking statement contained within this announcement, whether as a result of new information, future events or otherwise, other than in accordance with their legal or regulatory obligations (including under the Listing Rules, the Transparency Rules, the Prospectus Rules and the Disclosure Requirements).

4 for 5 fully underwritten £185 million Rights Issue

1.         Background

 Laird is a global technology company providing systems, components and solutions that enable connectivity in mission-critical wireless applications and antenna systems and protect electronics from electromagnetic interference and heat.

During the period from 2009 to 2015, Laird's revenue grew from £528.8 million to £630.4 million, both organically and through acquisition, benefiting from, amongst other things, the growth of the global smartphone and wireless technology markets.

2015 was a positive year for Laird, which saw the Group widen its range of offerings (especially in the space of connected cars) and further diversify its customer base. Laird announced in October 2015 that it was redesigning its operating model to simplify its manufacturing capabilities in Europe and North America into its largest facilities. This redesign of the operating model is expected to streamline the business to deliver efficiency savings as well as to enable Laird to become a more effective partner to its customers. Laird also acquired LS Research, a wireless product design business providing near field, local area and wide area products and services to enable wireless connectivity and EIoT capabilities into the commercial and light industrial markets.

Performance in 2016 was disappointing. Profit before tax and underlying profit before tax were adversely impacted principally by three factors, the first two of which particularly impacted the first half of 2016. The first factor was an unexpected reduction in activity in the US rail freight sector, a key market for Laird's wireless automation systems business ("WACS"), due to the collapse of oil prices, which materially affected Laird's performance in 2016. This was a significant external headwind, but the Directors believe Laird's commercial forecasting should have been better at predicting the impact of commodity pricing on key end markets.

The second factor, which primarily impacted margins, was the higher level of investment and remedial action required in relation to the acquisition of Novero, which completed in January 2016. When the business was acquired, the price and terms reflected that it was an operational and financial turnaround, with substantial prospects. Although no new issues were identified, it became clear that the turnaround actions and associated costs would be at the high end of expectations. The Directors believe that Novero remains an important strategic acquisition, but that expectations for the business in the early stages of ownership by the Group should have been more conservative and cautious, given the poor state of records and management controls pre-acquisition.

The third factor impacted the precision metals business within the Performance Materials division, where pricing and margin pressures from Laird's largest customer, reduced volumes due to a customer's later than expected ramp-up on smartphones and operational issues led to a significant decline in the division's performance.

The other Laird businesses traded in line with the Board's expectations for the financial year ended 31 December 2016. However, the reduced performance of the Group meant that full year (loss)/profit before tax was a loss of £122.3 million, as compared to a profit of £15.4 million for the prior financial year, while underlying profit before tax was £51.1 million, as compared to £73.1 million for the prior financial year. The significant reduction in profitability together with the Group's investments (both organic and the acquisition of Novero) and the weakness of sterling increased the Group's net debt to Covenant EBITDA ratio for the year to 3.2x, materially reducing the covenant headroom under Laird's Existing Financing Arrangements. 

Management has taken the appropriate steps to reduce costs in its wireless automation systems business while maintaining capability in order to enable the Group to manage the profitability of this business, including headcount reduction and lower discretionary spend, and has also taken actions to stabilise and improve the financial performance of the Performance Materials division, including the recruitment of a new President for the division. Actions have also been taken to manage costs and cash across the Group.

Furthermore, the decision was made to move from a two division to a three division structure effective from 1 January 2017. The new structure comprises: the new CVS division, the new WTS division and the new PM division, each with its own executive who will also sit on the Group executive committee. Further details are provided in paragraph 7 below. The Directors believe that this structure is simpler than the historic divisional/business unit model and will enable a greater focus on complementary products and end markets. For 2017 and onwards, Laird intends to report on the three new divisions as individual segments while all reporting covering 2016 and before will be on the basis of two segments, unless otherwise stated.

2.            Reasons for the Rights Issue

On 2 December 2016, in order to proactively address the Group's financial position and to significantly reduce its structural indebtedness, the Board announced it was targeting a capital structure of between 1.0x to 2.0x net debt to Covenant EBITDA in the medium term and indicated that it intended to undertake a Rights Issue in the first quarter of 2017 at the time of publication of the full year financial results.

The Board also announced that it was in discussions with the Lenders under its Existing Financing Arrangements. Whilst Laird did not believe that it would breach any of the covenants under those arrangements at 31 December 2016 (and in fact has not breached them), it successfully obtained amendments to the Existing Financing Arrangements to ensure that was the case as at 31 December 2016. The leverage covenants will be tested at 30 June 2017 and thereafter at their original levels. The net proceeds from the Rights Issue will be used to reduce borrowings under its revolving credit facilities and create sufficient covenant headroom going forward such that the Company will not need to seek further amendments to the Existing Financing Arrangements for subsequent testing dates.

In addition, the benefits of a strengthened financial position for Laird are that it:

·     enables the continued investment in 2017 to deliver the previously announced operational improvement programme and the associated benefits of annualised savings of at least £15 million (US$20 million) from 2018 with £12 million (US$15 million) expected in 2017, according to unaudited Company estimates;

·     enables the continued investment in opportunities for future growth, in particular in relation to the new CVS division;

·     provides the financial strength required to demonstrate Laird's ability to support customers; and

·     provides a strong foundation from which to assess the optimal route to maximise shareholder value in Performance Materials and particularly precision metals.

3.         Use of proceeds

The Rights Issue is expected to raise approximately £185 million in gross proceeds and approximately £175 million of net proceeds, which the Group expects to use to reduce borrowings under its revolving credit facilities.

4.         Financial impact of the Rights Issue

Had the Rights Issue taken place as at the last balance sheet date, being 31 December 2016, (and had the proceeds of the Rights Issue been used to reduce the Group's borrowings) the effect on the balance sheet would have been no change to cash and cash equivalents and a decrease in borrowings of £175 million.

5.         Terms of the Rights Issue and of the New Shares

The Company is proposing to raise proceeds of approximately £175 million (net of expenses) pursuant to the Rights Issue. The Rights Issue is being fully underwritten by the Underwriters, subject to certain customary conditions.

The Company proposes to issue 217,156,300 New Shares in connection with the Rights Issue. Subject to the fulfilment of, among other things, the conditions set out below, New Shares will be offered to Qualifying Shareholders at an Issue Price of 85 pence per Share, payable in full on acceptance. The Rights Issue will be offered on the basis of:

 4 New Shares at 85 pence per New Share for every 5 Existing Shares

held on the Record Date (and so in proportion for any other number of Existing Shares then held) and otherwise on the terms and conditions as set out in the prospectus and, in the case of Qualifying Non-CREST Shareholders, the Provisional Allotment Letters.

The Issue Price of 85 pence per New Share represents a discount of approximately 51.4% to the closing middle market price of 174.75 pence per Existing Share on 27 February 2017, the latest Business Day prior to the announcement of the Rights Issue and an approximate 37.0% discount to the theoretical ex-rights price of 134.86 pence per New Share by reference to the closing middle market price on the same basis.

Entitlements to New Shares will be rounded down to the nearest whole number (or to zero) and fractions of New Shares will not be allocated to Shareholders but will be aggregated and issued into the market for the benefit of the Company. Holdings of Existing Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Rights Issue.

The Rights Issue is conditional, among other things, upon:

·     the Underwriting Agreement having become unconditional in all respects save for the condition relating to Admission;

·     Admission becoming effective by not later than 8.00 a.m. on 17 March 2017 (or such later time and/or date as the Sole Global Coordinator may agree); and

·     the passing of the Resolution at the General Meeting without material amendment.

The Rights Issue will result in 217,156,300 New Shares being issued (representing approximately 80.0% of the existing issued share capital and 44.4% of the enlarged issued share capital immediately following completion of the Rights Issue).

The New Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Shares, including the right to receive dividends or distributions made, paid or declared after the date of issue of the New Shares. Application will be made to the FCA and to the London Stock Exchange for the New Shares to be admitted to the premium listing segment of the Official List and to trading on the main market of the London Stock Exchange. It is expected that Admission will occur and that dealings in the New Shares (nil paid) on the London Stock Exchange will commence at 8.00 a.m. on 17 March 2017.

6.            Intentions of the Directors

The Directors, who hold in aggregate 201,230 Existing Shares, representing approximately 0.074% of the Company's existing issued ordinary share capital as at 27 February 2017 (being the last practicable date prior to the publication of this announcement), each intend to take up their rights in full or in part in respect of the New Shares to which they are entitled or, where their Existing Shares are held in trust or with nominees, such Directors intend to recommend that such rights be taken up in full or in part.

7.            Reorganisation of the Group's divisions

Laird is a global technology company providing systems, components and solutions that enable connectivity in mission-critical wireless applications and antenna systems and protect electronics from electromagnetic interference and heat. Laird's aim is to be a trusted partner to its customers by creating innovative customer solutions, ensuring high quality engineering and manufacturing processes, enabling accelerated new product launches by delivering speed and access throughout the customer design process and driving higher levels of customer engagement. As at 31 December 2016, Laird had 9,836 employees in 53 locations covering 4 continents and 17 countries. The Group has 24 engineering and manufacturing sites in different locations around the world and 21 design centres.

In 2016, Laird reported revenue of £801.6 million (2015: £630.4 million; 2014: £564.9 million), loss before tax of £122.3 million (2015: profit before tax of £15.4 million, 2014: profit before tax of £48.1 million) and underlying profit before tax of £51.1 million (2015: £73.1 million; 2014: £63.2 million). Net assets as at 31 December 2016 were £352.5 million (as at 31 December 2015: £418.0 million; as at 31 December 2014: £450.1 million). Cash and cash equivalents as at 31 December 2016 were £64.5 million (as at 31 December 2015: £68.8 million, as at 31 December 2014: £64.0 million), total borrowings as at 31 December 2016 were £409.1 million (as at 31 December 2015: £268.8 million, as at 31 December 2014: £223.5 million) and net debt as at 31 December 2016 was £344.6 million (as at 31 December 2015: £200.0 million; as at 31 December 2014: £159.5 million).

Historically, the Group has reported as two divisions: Wireless Systems and Performance Materials, described below.

Wireless Systems

In 2016, the Wireless Systems division's revenue was £373.2 million (2015: £235.6 million; 2014: £198.8 million) and its segment profit before amortisation and impairment of acquired intangible assets and exceptional items was £25.3 million (2015: £30.4 million; 2014: £24.5 million).

The Group is an established leader in automotive telematics. The Telematics/M2M section of the Wireless Systems division comprised the Group's Novero and Telematics businesses. Combined, these businesses design, manufacture and sell antennas, automotive-grade connectivity devices and smart device integration ("SDI") products into the vehicle connectivity market. Customers include original equipment manufacturers ("OEMs") in automotive, commercial trucking, construction equipment and agricultural equipment, as well as fleet management companies. This section of the division benefits from fast-growing end markets and high sales visibility.

The Group is also a market leader in wireless connectivity outside of the vehicle. Prior to the divisional reorganisation, the Wireless Systems division focused on industrial and commercial antennas, commercial wireless connectivity (including Bluetooth and Wi-Fi radios) and industrial control systems. The Directors believe that in this market the Wireless Systems division is well placed to prosper from longer-term macro trends, including the development of the EIoT and 5G roll-out and, with value added technologies, systems and products, has significant potential for growth and higher margins in this market.

During 2016, Laird's existing businesses in the Wireless Systems division, other than WACS and Novero, performed well. Despite the previously described operational challenges, Novero is now fully integrated, the turnaround programme is on track and it is expected to make a modest profit in 2017.

This investment in key automotive platforms will mean that the combined Novero and Telematics businesses are well positioned to take advantage of the significant growth potential in the connected automotive market. It is on this basis that, from 1 January 2017, Laird has repositioned these businesses into a standalone CVS division.

Performance Materials

In 2016, Performance Materials's revenue was £428.4 million (2015: £394.8 million; 2014: £366.1 million) and its segment profit before amortisation and impairment of acquired intangible assets and exceptional items was £44.2 million (2015: £57.5 million; 2014: £54.1 million).

The Group's Performance Materials division is a leading global designer and supplier of precision metals, EMI shielding materials (performance coatings and Radio Frequency ("RF") polymers), thermal materials and magnetic and ceramic products. These products isolate and protect sensitive electronics from EMI, allowing them to function and connect effectively, as well as improving electronic performance through efficient management of heat. The ever-increasing demand for more portable and more powerful devices, and the continuing growth in connected devices, create numerous challenges for Laird's customers who rely on its expertise to create innovative solutions tailored to their needs. Laird's customers include global industry leaders in its target market segments. In addition, Model Solution, Laird's South Korean joint venture created in 2014, which specialises in prototype design, forms part of the Performance Materials division as it is strategically aligned to Performance Materials.

Performance in this division was disappointing in 2016. Pricing and margin pressures from a key customer, reduced volumes due to a customer's later than expected ramp-up on smartphones and operational issues, have led to a significant decline in the precision metals business within the Performance Materials division. As a first step in the stabilisation of Performance Materials, a new President of the division has been recruited and has joined the Group with effect from 6 February 2017. The Group is taking action to improve commercial and operational performance within precision metals to stabilise the business unit and the financial performance of the division as a whole, while also reviewing the growth and value creation options for the division. Laird will then seek to optimise what the Directors consider is a strong portfolio across the division, to navigate a path to long-term sustainable growth. The remaining businesses within this division performed as expected in the year.

Reorganisation of the Group's divisions

As from 1 January 2017, the Company is operating in three divisions: CVS, WTS and PM. The changes from the old structure can be summarised as follows:

·     The Telematics business of Laird, together with Novero, have separated from the original Wireless Systems division to create the new CVS division;

·     Engineered Thermal Systems ("ETS") which used to form part of the Performance Materials division and which provides heat protection and temperature control to maintain peak performance of larger electronic and mechanical sub-systems and components, has combined with the rest of the original Wireless Systems division to create the new WTS division; and

·     The remainder of the original Performance Materials division remains as the new PM division.

The table below shows the revenue and segment profit before amortisation and impairment of acquired intangible assets and exceptional items for each of the years ended 31 December 2014, 2015 and 2016 for each of the original divisions, as well as the revenue and segment profit before amortisation and impairment of acquired intangible assets and exceptional items for such years based on the new divisional structure. The figures for the original divisions are extracted without material adjustment from Note 3 to the Laird Final Results for the year ended 31 December 2016 and from the Laird Annual Report and Accounts for each of the years ended 31 December 2014 and 2015. The figures for the new divisional structure are derived from unaudited Company data. The reconciliation of the revenue and segment profit before amortisation and impairment of intangible assets and exceptional items to the original divisional structure will be set out in the Prospectus.

Connected Vehicle Solutions

The new CVS division comprises the combination of the Telematics business and Novero. The Directors believe this combination will mean that the division will be well placed to take advantage of the significant growth potential in the connected automotive market. With the telematics control technology from Novero, combined with the vehicle antenna systems from the Telematics business, CVS will create "smart antenna" systems that differentiate the Group as one of the leaders in this technology. As a result, the potential content per vehicle has expanded and sales opportunities have also increased. The focus of the division is on automotive antennas and telematics control units for cars, trucks and fleets with a broad product offering of automotive antennas, telematics control unit ("TCUs"), signal enhancement systems, wireless charging, fleet tracking and automotive USB hubs. The Directors believe that CVS is a growing business which has taken a step change through recent investment and that separating Novero and Telematics into a standalone division will enable CVS to take advantage of fast growing end markets and high sales visibility, which the Group is already seeing in its order book and pipeline for 2017. The Directors expect to see superior growth and margin progression in this division and are targeting revenue in excess of £405 million (US$500 million) by 2020, with improving profitability, according to the Company's unaudited estimates.

The CVS division designs, manufactures and sells a range of products into the vehicle connectivity market, including:

·     Automotive antennas;

·     Telematics Control Units;

·     Automotive grade connectivity devices; and

·     Smart device integration.

According to unaudited Company data, in 2016, the CVS division's revenue would have been £252.1 million (2015: £131.1 million; 2014: £103.2 million) and its segment profit before amortisation and impairment of acquired intangible assets and exceptional items would have been £13.0 million (2015: £13.6 million; 2014: £10.8 million).

Wireless and Thermal Systems

The new WTS division represents several discrete businesses with related technologies across a range of end markets:

·     Industrial and commercial antennas;

·     Commercial wireless connectivity, including Bluetooth and Wi-Fi radios;

·     Industrial control systems; and

·     Active engineered thermal management systems.

The four businesses have largely been driven independently and can generally be characterised as offering "low volume, high value add" products and systems, with modest growth and limited examples of valuable collaboration between the areas. The WTS division comprises engineered solutions businesses serving specific wireless markets. These businesses aim to be commercially focused to drive growth, deep market and competitive insights and new product execution into target markets. The Directors believe that combining these businesses will allow the Group to leverage a multitude of complementary capabilities and technologies, improve the cross-fertilisation of ideas, become smarter about customer integration and reduce costs. In the medium to long term, the Directors believe the WTS division is well placed to benefit from global trends, including the development of the EIoT and the 5G roll-out.

 According to unaudited Company data, in 2016, the WTS division's revenue would have been £154.5 million (2015: £131.8 million; 2014: £122.1 million) and its segment profit before amortisation and impairment of acquired intangible assets and exceptional items would have been £14.3 million (2015: £18.2 million; 2014: £14.4 million).

Performance Materials

The new PM division represents a cluster of material technologies and end markets:

·     Precision Metals (c.55% of revenue);

·     EMI Materials - Performance Coatings and RF Polymers;

·     Thermal materials, including dispensables, adhesives and heat spreader products; and

·     Magnetic and Ceramic Products.

In recent years, Performance Materials has been a key growth driver of Group profitability, delivering healthy margins and good cash generation by leveraging innovation and reliable fulfilment. However, much of Performance Materials is a short cycle business with a natural volatility linked to certain end markets, most notably consumer devices. The relative scale of Performance Materials coupled with this volatility and short sales visibility can create uncertainty and the intention is to deliver a more sustainable business model and profit performance. In order to achieve this, as a first step, a new President of the division has been recruited and joined the Group with effect from 6 February 2017. Additionally, the Group is taking action to improve commercial and operational performance within precision metals to stabilise the financial performance of the Performance Materials division as a whole, whilst also reviewing growth and value creation options. Model Solution remains part of this division, as this prototype model business remains adjacent to Performance Materials. By moving the ETS business from this division into the new WTS division, Laird has created a more focused material technologies business which the Directors believe is better able to address the higher value-add opportunities within existing markets.

 According to unaudited Company data, in 2016, the new PM division's revenue would have been £395.0 million (2015: £367.5 million; 2014: £339.6 million) and its segment profit before amortisation and impairment of acquired intangible assets and exceptional items would have been £42.2 million (2015: £56.1 million; 2014: £53.4 million).

8.            Current trading and prospects in respect of Laird

Trading for 2016 was in line with the Board's expectations as set out in the statements made on 19 October 2016, 2 December 2016 and 24 January 2017.

Despite the challenging conditions leading to a disappointing performance in 2016, the Directors believe that there are a number of factors that leave Laird well placed in 2017. These factors include the completed integration of Novero, which the Directors expect to deliver modest profitability in 2017, the previously announced operational improvement programme and associated annualised cost-savings, and the actions that have been taken to gradually improve operational efficiency and profitabililty in the Performance Materials division, specifically within the precision metals business. In 2017, the Group expects interest costs of approximately £12 million, exceptional items including an approximately £5 million charge to operating (loss)/profit and an approximately £30 million cash cost relating primarily to the divisional reorganisation and operational improvement programme, an effective tax rate of between 28-30%, capital expenditure of approximately £40 million and capitalised research and development expenditure of approximately £24 million.

 The Directors believe that the need for wireless connectivity and increasing functionality is the driving force behind connecting the home, automobile, outside environment and other networks together and that the demand for more powerful devices and ubiquitous connectivity within the electronics environment creates opportunities to underpin a return to long-term growth of the business.

9.            Dividends and dividend policy

 In light of the proposed Rights Issue, the Board intends that no final dividend will be paid in respect of 2016. The total dividend in respect of the 2016 financial year will therefore be the interim dividend of 4.53p (full year 2015: 13.0p).

The Board understands the importance of optimising value for shareholders and believes in balancing returns to shareholders with investment in the business to support future growth. To this end, the Board intends to resume dividends in 2017 based on a dividend per share that is covered three times by underlying basic earnings per share with the interim dividend at approximately one third of the full year dividend.

Thereafter, consistent with the anticipated improvement in earnings and of cash generation in 2018 and beyond, and subject to prevailing market conditions, the Board expects to reduce dividend cover towards two times underlying basic earnings per share over the medium term.

10.          Amendments to the Existing Finance Agreements

In December 2016, while the Group believed that it would be in compliance with the leverage covenants under its existing financing arrangements for the (then upcoming) 31 December 2016 testing date, it obtained amendments from the Lenders permitting an increase in leverage to 4.0x from 3.5x as at the 31 December 2016 testing date. It obtained these amendments so as to avoid any risk of default at a time when final year end results were not available and work was ongoing in respect of its plans for the Rights Issue. Ultimately, the Group was in compliance with the 3.5x leverage covenant as of 31 December 2016.

11.          Overseas Shareholders

New Shares will be provisionally allotted (nil paid) to all Shareholders on the register on the Record Date, including Overseas Shareholders. However, Provisional Allotment Letters will not be sent to Shareholders with registered addresses, or who are resident or located, in an Excluded Territory or, subject to certain exceptions, the United States, nor will the CREST stock account of Shareholders with registered addresses, or who are resident or located, in an Excluded Territory, or, subject to certain exceptions, the United States, be credited with Nil Paid Rights. The notice in the London Gazette when published will state where a Provisional Allotment Letter may be inspected or obtained. Any person with a registered address, or who is resident or located, in the United States or an Excluded Territory who obtains a copy of this announcement, the Prospectus or a Provisional Allotment Letter is required to disregard them, except with the consent of the Company.

Notwithstanding any other provision of this document or the Provisional Allotment Letter, the terms of the Rights Issue relating to Overseas Shareholders may be waived, varied or modified as regards specific Shareholders or on a general basis by the Company in its absolute discretion.

In addition, Overseas Shareholders should consult their professional advisers as to whether they require any governmental or other consents or need to observe any other formalities to enable them to take up their entitlements to the Rights Issue.

12.          Structure of the Rights Issue

The Rights Issue has been structured in a way that is expected to have the effect of providing the Company with the ability to realise distributable reserves approximately equal to the net proceeds of the Rights Issue less the nominal value of the New Shares issued by the Company.

The Company and J.P Morgan Cazenove (the JerseyCo Subscriber) have agreed to subscribe for ordinary shares in JerseyCo. Monies received from Shareholders or renouncees taking up New Shares under the Rights Issue and from persons procured by the Underwriters, as agents for the Company, to acquire New Shares not taken up, or, if applicable, the Underwriters, will be paid to an account with the Receiving Agent. The JerseyCo Subscriber (acting as principal), will apply the monies in such account (less any premium above the Issue Price) to subscribe for redeemable preference shares in JerseyCo.

The Company will allot and issue the New Shares to those persons entitled thereto in consideration for the JerseyCo Subscriber transferring its holdings of ordinary shares and redeemable preference shares in JerseyCo to the Company. Accordingly, instead of receiving cash consideration for the issue of New Shares, following completion of the Rights Issue, the Company will own the entire issued share capital of JerseyCo, whose only asset will be the cash reserves representing an amount equal to the net proceeds of the Rights Issue. The Company should be able to access those funds by redeeming the redeemable preference shares it holds in JerseyCo, or, alternatively, during any interim period prior to redemption, by procuring that JerseyCo lends the amount to the Company. The ability to realise distributable reserves in the Company will facilitate any potential distribution to Shareholders made by the Company in the future.

Accordingly, by taking up New Shares under the Rights Issue and submitting a valid payment in respect thereof, a Shareholder (or renouncee, as the case may be) instructs the Receiving Agent to hold such payment on behalf of the JerseyCo Subscriber and (i) to the extent of a successful application under the Rights Issue (which has not been subsequently validly withdrawn), to apply such payment on behalf of the JerseyCo Subscriber solely for the JerseyCo Subscriber to subscribe (as principal) for redeemable preference shares in JerseyCo; and (ii) to the extent of an unsuccessful or validly withdrawn application under the Rights Issue, to return the relevant payment without interest to the applicant.

The Company may elect to implement the Rights Issue without using the structure above if it deems it to be in the Company's interest to do so.

13.          Special Dealing Service

 The Company has engaged Capita Asset Services to make available the Special Dealing Service in order for Qualifying Non-CREST Shareholders (who are private individuals and whose registered addresses are in the United Kingdom or any other jurisdiction in the EEA) to sell all of the Nil Paid Rights to which they are entitled or to effect a Cashless Take-up should they wish. Special Dealing Service Terms and Conditions will be posted to Qualifying Non-CREST Shareholders together with the Provisional Allotment Letter.

14.          Importance of your vote

Your attention is again drawn to the fact that the Rights Issue is conditional and dependent upon, amongst other things, the Resolution being passed at the General Meeting.

Shareholders are asked to vote in favour of the Resolution at the General Meeting in order for the Rights Issue to proceed. The Directors believe that, in addition to avoiding the covenant default at the next testing date and the liquidity shortfalls described below, the successful completion of the Rights Issue will significantly strengthen the Group's balance sheet and this will enable the Group to make planned investments to deliver the previously announced operational improvement programme and realise opportunities for future growth, which will be important to the future success of the Group.

In December 2016, while the Group believed that it would be in compliance with the leverage covenants under its Existing Financing Arrangements for the (then upcoming) 31 December 2016 testing date, it obtained amendments from the Lenders permitting an increase in leverage to 4.0x from 3.5x as at the 31 December 2016 testing date. It obtained these amendments so as to avoid any risk of default at a time when final year end results were not available and work was ongoing in respect of its plans for the Rights Issue. Ultimately, the Group was in compliance with the 3.5x leverage covenant as of 31 December 2016.

However, if the Resolution is not passed and the Rights Issue therefore does not proceed, absent successful implementation of the measures described below, there is a risk Laird may experience a liquidity shortfall of up to £13.5 million in May 2017 and Laird is highly likely to be in default under its Existing Financing Arrangements on 30 June 2017, the next covenant testing date. In the event of such a default, the Lenders will be entitled to demand immediate payment of amounts then due under such facilities, currently estimated to be up to approximately £410 million (based on 31 December 2016 drawings), subject to amounts then drawn and exchange and interest rates, and the Group would be unlikely to obtain the funds necessary to pay such amounts at that time. Furthermore, even if the liquidity shortfall in May 2017 and default at the 30 June 2017 testing date were avoided, if the Rights Issue does not proceed to completion, it is highly likely that Laird will not have sufficient liquidity/cash headroom to operate the Group from the third quarter of 2017, with a potential liquidity shortfall of up to £50 million before the end of the next 12 months.

If the Rights Issue does not proceed, the Group would put in place an action plan to avoid the initial liquidity shortfall, covenant default and ongoing liquidity shortfall, which would first involve attempting to renegotiate the terms of the Existing Financing Arrangements to secure further amendments of the financial covenants and increases to the amounts available under the Existing Financing Arrangements. The Directors believe that such amendments would only be agreed to by the Lenders, if at all, at a significant cost to the Group in the form of additional fees payable to the Lenders, increased coupon payments and/or additional restrictions on, or commitments to engage in, corporate actions (e.g. acquisitions and disposals), each of which would adversely affect or delay implementation of the Group's strategies.

If the relevant Lenders were not to agree to commercially acceptable amendments of the Group's financial covenants and increases to the amounts available under the Existing Financing Arrangements, the Group would then seek alternative long-term committed financing arrangements to replace or refinance the amounts outstanding under those arrangements including, in the case of the US PP Notes, the "make-whole" amount. The Directors have not had any discussions with potential lenders about such arrangements and they believe that the terms of such new arrangements, if available at all, would be likely to be significantly more expensive and onerous than those which apply under the Existing Financing Arrangements.

The Company could also seek other forms of funding, such as a new equity restructuring, which may result in a dilution of the equity interests of Shareholders in the Company immediately prior to any further issue of Shares.

Whilst simultaneously seeking amendments to the Existing Financing Arrangements and/or seeking alternative financing arrangements, the Group would institute Group-wide cost-saving initiatives by reducing capital and headcount investments and tightly managing discretionary spending. Such cost-saving initiatives would, however, only provide a short-term solution to avoid an initial liquidity shortfall in May 2017 and preserve cash headroom under the Group's financial covenants, and would likely not provide sufficient liquidity/cash headroom to operate the Group during the third quarter of 2017.

In addition to cost-saving initiatives and to provide additional cash headroom, the Group may take action to effect disposals of assets, such as the disposal of one or more of the Group's businesses to facilitate a reduction of the Group's outstanding indebtedness. The Directors believe they may be able to secure a disposal of assets in an acceptable timeframe, however there can be no guarantee that the Directors would be able to dispose of assets at a price which they believe is reflective of the full value of the assets being disposed and the Existing Financing Arrangements (and possibly any new financing arrangements) restrict the Group's ability to make disposals without the consent of the relevant Lenders, which could be withheld. While disposals of assets would likely provide the Group with enough cash headroom to enable it to avoid a breach of its financial covenants at the testing date of 30 June 2017 and sufficient liquidity to meet the Group's present requirements in order to operate the Group throughout 2017, such measures would restrict the Group's future growth opportunities and would likely impact the Group's ability to maintain or improve its competitive positioning.

As a result, if the Rights Issue does not proceed to completion and the Group is unable to avoid a breach of its financial covenants and a liquidity shortfall by renegotiating the terms of its Existing Financing Arrangements, securing alternative long-term financing, cutting costs and capital investment throughout the Group, or disposing of certain of the Group's assets before a liquidity shortfall occurs or a default occurs at the 30 June 2017 testing date, the Company would be likely to enter into administration or receivership shortly thereafter, at which point Shareholders would lose all or part of the value of their investment in the Company.

15.          Recommendation and voting intentions

The Board believes the Rights Issue and the Resolution to be in the best interests of the Shareholders as a whole. Accordingly, the Board unanimously recommends that the Shareholders vote in favour of the Resolution to be proposed at the General Meeting to approve the Rights Issue, as the Directors each intend to do in respect of their own legal and beneficial holdings, amounting to 201,230 Existing Shares (representing approximately 0.074% of the Company's existing issued ordinary share capital as at 27 February 2017 (being the last practicable date prior to the publication of this announcement)).

Appendix 1 Expected timetable of principal events

Notes:

(1)  The times and dates set out in the expected timetable of principal events above and mentioned throughout this document, by announcement through a Regulatory Information Services, and in the Provisional Allotment Letter may be adjusted by the Company, in which event details of the new dates will be notified to the FCA and to the London Stock Exchange and, where appropriate, to Shareholders.

(2)  References to times in this document are to London time unless otherwise stated.

(3)  Subject to certain restrictions relating to Overseas Shareholders..

Appendix 2

Definitions and Glossary of Technical Terms