Tialis Essential IT (LSE:TIA), the mid-market IT managed services provider, has formalised its strategic advisory relationship with joint venture company AI Auxesis Limited.
The Strategic Advisory Agreement covers support for the Group's growth and financing strategy, key commercial relationships, and transaction origination and execution. It runs for an initial 12 months, after which either party can terminate on three months' notice.
AI Auxesis will receive an annual cash fee of £192,000 for the initial term, paid monthly.
From the second year, the fee resets annually to the greater of £192,000 or 0.7% of Tialis's market capitalisation.
The agreement also allows AI Auxesis to earn a 10% fee on any audited profit or gain from a disposal, but only where that disposal is separately designated a "mandated disposal" by independent directors Peter Hallett and Rachel Horsefield.
Tialis said AI Auxesis brings sector-specific strategic and transaction experience that complements existing executive and adviser resources, helping manage stakeholder relationships that would otherwise require additional executive hires or external advisers.
Because Andrew Ian Smith, a substantial Tialis shareholder, holds an interest in AI Auxesis, the agreement is classified as a related party transaction under AIM Rules. The Independent Directors, having consulted nominated adviser Zeus Capital, consider the terms fair and reasonable to shareholders.
