16th May 2008 07:00
16th May 2008
THE INNOVATION GROUP PLC
Acquisition of National Service Network Holdings
The Innovation Group plc ('Innovation Group') (LSE: TIG.L), which provides outsourcing services and software solutions to the world's insurance providers, today announces that it has agreed to acquire a 100% shareholding in NSN Holdings Limited (NSN) from management, Aftermarket UK Limited and South East Growth Fund Managers Limited, for an initial consideration of £1.1m, plus an earn-out payment. The earn-out payment is payable in annual tranches related to the financial years of the Group over a period expiring on 30 September 2012. The earn-out is dependent on the performance of NSN and is subject to a maximum of £5.75m.
The initial consideration of £1.1 million, funded by new bank debt, will be paid in cash with the earn-out payment being satisfied by the issue of new ordinary shares or cash.
NSN was established in early 2003, and manages the largest centrally controlled network of independent maintenance and repair garages in the UK with over 800 garages including car, Light Commercial Vehicle (LCV), Heavy Goods Vehicle (HGV) and plant garages located throughout the UK (including Northern Ireland and the Scottish Islands).
Financial statements for the year ended 31st March 2007, NSN reported gross revenue of £18.8m and a pre and post tax loss of £1.8m. Gross assets were £2.8m. The acquisition is expected to be earnings neutral in 2008 and from 2009 earnings enhancing.
NSN has in excess of 25 customers including Auto Protect, National Grid, AA warranty, RAC warranty, Lease drive, Flexxilease and Leaseplan.
The capability includes a central system to manage vehicle service, maintenance and repair and provides access to a unique national network of independent garages, offering high quality technical and customer service standards.
Hassan Sadiq, Chief Executive Officer of Innovation Group plc, said:
"The acquisition of NSN enables the Group to offer a unique and compelling proposition to our customers, extending our services from a repair network to a repair and service network, providing a 'one stop shop' for vehicle management, servicing and repair".
Enquiries:
|
The Innovation Group Hassan Sadiq, Chief Executive Officer Paul Hemsley, Finance Director |
Tel: +44 (0) 1489 898300 |
|
Financial Dynamics Matt Dixon / Erwan Gouraud |
Tel: +44 (0) 20 7831 3113 |
Notes to Editors
The Innovation Group plc ("Innovation" or "the Group") provides BPO services and software solutions to insurers and other risk carriers. The software solutions are designed for the handling of policy and claims administrative processes within the insurance industry. The solutions can be utilised in connection with the Group's BPO operations or implemented on a stand alone basis. Approximately 77% of the Innovation Group's total revenues are now recurring with the remainder coming from the sale and support of its software solutions. The Group provides software and outsourcing services on a non-branded basis.
The global BPO market is estimated to grow at 14% CAGR from 2007 to 2010 according to IDC (May 2006) and outpace IT services. In North America, BPO is estimated to grow by an 8.8% compound annual growth rate to $100 billion by 2009. (Gartner 2005)
Datamonitor, August 2006, has also said there has been a continued increase in the propensity to outsource business processes in the insurance industry with 47% of insurers using one or more BPO services in 2006 compared to 41% in 2005. Claims and policy administration BPO (Innovation's specialty) are the highest priority business functions for BPO and among the fastest growing BPO areas.
Innovation has over 300 global clients including Allstate, LeasePlan, The Ford Motor Company, Aviva, AXA Insurance, Royal & Sun Alliance, Toyota (South Africa) and Zurich (UK). The Group processes more than 3 million claims per year with 20% direct claims cost saving achieved. The software operates in 8 languages and the Group has approximately 2300 people across offices in North America, the UK, Germany, South Africa, Australia, Japan, France, Spain, Netherlands and Belgium.
www.innovation-group.com
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