Acquisition

Jelf Group PLC

("Jelf", "the Company" or "the Group")

Acquisition of The Insurance Partnership Holdings Limited

Regional acquisition, good opportunity to generate further growth

Jelf, an independent consultancy which provides advice across a broad range of insurance, financial and employee benefit services to corporates and related individuals, is pleased to announce that it has conditionally agreed to acquire the entire issued and to be issued share capital of The Insurance Partnership Holdings Limited ("TIP"), for an initial consideration of £12.0 million (excluding a payment for tangible net assets) and deferred performance related consideration of up to a further £3.5 million. The initial consideration of £12 million will be satisfied by £8.9 million of cash and £3.1 million in new Jelf shares to be issued on completion to key senior management and sales people of TIP.

TIP is a leading regional general insurance broker based in Yorkshire and the Midlands.

The acquisition is in line with the Jelf strategy of growth through organic initiatives and selected acquisitions.

Acquisition Highlights:

·; Combined entity ranked sixth largest broker by GWP (Note 1).

·; Gross written insurance premiums will increase by £53m to £235m (Note 2).

·; Acquisition provides further scale and geographic expansion of the Group's footprint into Yorkshire (Hull, York and Leeds), and strengthening of the Group's West Midlands presence with the TIP office in Wolverhampton.

·; Acquisition provides an opportunity to drive future revenue and profitability through revenue and cost synergies.

·; Acquisition expected to be earnings-enhancing in the financial period ending 30 September 2014, the first full year following completion of the acquisition.

·; Jelf is retaining all key personnel to drive the acquired business forward and assist with integration.

·; TIP has an acknowledged expertise in the larger corporate insurance risk markets. This will complement the existing Jelf team and will also expand Jelf's cross sales capability into the Jelf Employee Benefits' client base.

·; Both companies have expertise in working with affinities and this is an area that the firms will work on together to develop further. Together the two businesses will make a powerful force within this sector.

·; The two companies are culturally aligned, sharing a passion for client service. Jelf has recently been awarded an "Exceptional" 3 star rating by Investor in Customers (independent customer survey).

·; Both companies have attained Corporate Chartered Status with the Chartered Insurance Institute.

·; Acquisition subject to FCA approval.

About The Insurance Partnership Holdings Limited:

·; TIP is an insurance broker based in Yorkshire (Hull, York and Leeds) with an office in Wolverhampton. Simultaneous with the acquisition of TIP, TIP will divest and separate out its shareholding in The Insurance Partnership Financial Services Limited.

·; In the year ended 30 June 2012, TIP achieved adjusted revenue of £8.8 million, adjusted EBITDA of £1.3 million, and adjusted profit before tax of £0.64 million. Reported profits before tax for TIP (excluding The Insurance Partnership Financial Services Limited) for the year ended 30 June 2012 were £0.8 million. (Note 3).

·; The results and forecasts described above reflect the continuing operations of the acquired Group, excluding the results of the Financial Services business, and are also adjusted for the effect of a lease that will be in force post-completion following the sale and leaseback of a freehold property previously owned by TIP, at an annual rent of £160,000.

·; Jelf propose to retain the existing strong management team that is led by Robert Worrell who will bring additional expertise in key areas of corporate broking, scheme and affinity development and management, and claims management. Robert Worrell will join the Jelf Insurance Brokers board as a director.

·; In addition Robert Worrell will use £1.2 million of his consideration to purchase Jelf shares in the market post-completion.

Alex Alway, CEO of Jelf, said:

"I am pleased that Rob Worrell has decided that being part of Jelf will enable him and his team to realise their ambitious plans for growth. We feel privileged to welcome Rob and his team to the Group. Together we will be an even stronger force in insurance broking. The acquisition is significant for Jelf and we are confident that this will be an earnings enhancing deal for Jelf. During the course of negotiations we have realised just how culturally aligned we are, and both teams are excited at the prospect of working together."

Robert Worrell, MD of TIP said:

 "TIP was never a business for sale but TIP and Jelf are such a perfect fit. It was that simple - shared vision, values and culture with a complete passion for client service and committed delivery. Our combined sum of the parts will create a market leading organisation. I am so excited at the prospect of working closely with the Executive Team that I already knew well and trust completely."

Notes:1. Source: Cornell Consulting 1-1-13.

2. Source: TIP GWP at 30 June 2012 £53 million. Jelf GWP at May 2012 £182 million.

3. Adjusted to exclude the results of The Insurance Partnership Financial Services Limited and to add a nominal rental charge of £160,000 relating to the effect of a lease that will be in force post-completion following the sale and leaseback of a freehold property previously owned by TIP.

Enquiries:

Further information is available about Jelf at the Group's website: www.jelfgroup.com

Acquisition

Under the terms of the acquisition Jelf has conditionally agreed to acquire TIP for a maximum total consideration of up to £15.5m plus a payment for the tangible net assets which will be determined by completion accounts, subject to a maximum of £2.0m together with a contingent payment of up to £100,000 dependent on the pre-completion performance of a contract.

The initial consideration to be paid for TIP is £12m to be satisfied through a combination of cash, cash to be used to purchase Jelf shares in the market and the allotment and issue of new Jelf shares.

·; Cash: The key vendors will on completion receive a total of approximately £7.7m in cash.

·; Cash to be used to purchase Jelf shares: Robert Worrell (Managing Director of TIP) and Ian Hakes (one of the vendors) will also receive approximately £1.2m in cash which will be used by them to purchase Jelf shares in the market through Jelf's broker. They have agreed to retain such purchased Jelf shares for a minimum of three years, subject to certain exceptions.

·; Shares: TIP's key senior management team and key sales people hold options in respect of shares in TIP through a share incentive scheme. These options will be exercised and the resultant shares in TIP sold to Jelf, the consideration for which will be satisfied by the allotment and issue of new Jelf shares to the value of £3.1m. These shares will be subject to a three year lock in.

It is Jelf's intention to utilise its buy-back authority to buy-back shares in the market equivalent to the number of new Jelf shares which are to be allotted and issued above, and for such shares to be cancelled.

In addition, deferred performance related consideration of up to a maximum of £3.5m will be payable to the key vendors if certain future financial targets are achieved by TIP. The deferred consideration will be payable to the key vendors in cash which, in relation to Robert Worrell's proportion, will be used to purchase Jelf shares in the market through the Company's broker.

Completion will be conditional upon the relevant change of control approval being granted by the FCA and a further announcement will be made in due course following completion.

The Insurance Partnership - background and history

The Insurance Partnership started trading in 1993 with four founding partners (Robert Worrell, Ian Hakes, Les Reveley and Malcolm Douglas) at a single office in Kingston upon Hull. Over the next 19 years the company has seen year on year profit and growth, incorporating in 2000 led by Managing Director Robert Worrell and Chairman Ian Hakes. The company moved to a new purpose built Head Office in 2007 placing £27 million GWP and employing 100 people over 3 locations. The company is now placing £53 million GWP with over 150 people from 4 offices in the UK, (Hull, York, Leeds, and Wolverhampton) delivering Insurance Broking, Healthcare and Risk Management Services. The company has attained Corporate Chartered Status with the Chartered Insurance Institute and NQA ISO 9001 accreditation and specialises in corporate risks, financial institutions, property, including schemes with sector strengths of agriculture, logistic, hire and rental.