25th Jan 2007 07:01
Jelf Group PLC25 January 2007 25 January 2007 JELF GROUP PLC ('Jelf' Group' or 'The Group') SUBSTANTIAL ACQUISITION OF SPS WELLBEING Jelf Group plc ("Jelf" or "the Group"), the leading corporate and financialconsultancy group, is pleased to announce that it has acquired the entire issuedshare capital of Hampshire based SPS Wellbeing Ltd ("SPS Wellbeing"), amarket-leading specialist healthcare and group risk intermediary, for a maximumconsideration of £10.0m (subject to completion accounts and the achievement infull of performance targets). Highlights: • As acquisition prospects in this market diminish, the deal represents one of the few remaining opportunities to acquire a large and successful privately-owned specialist healthcare intermediary. • Between them, Jelf and SPS Wellbeing now place c. £125m of premiums with healthcare and group risk insurers, positioning Jelf in a dominant market position as one of the top UK healthcare intermediaries. • The SPS Wellbeing client list includes around 1,600 SME corporate clients, 160 larger corporate clients, around 2,250 schemes and 3,000 individuals. These clients will benefit from the full range of Jelf Group services, including the Group's market-leading on-line flexible benefits offering. • The market for employee benefits, and especially healthcare services, is expected to continue to grow, reflecting the increasing importance to employers of private medical provision as part of an attractive and motivational remuneration package for employees: • Over 60% of large corporates now offer employee benefits packages to reward staff • The UK is 2nd only to the Netherlands in terms of corporate spend on benefits in Europe • Flexible benefits, where employees can select their 'rewards', are gaining in popularity; these can include PMI, dental treatment, gym membership, life assurance and childcare vouchers • The continuing series of acquisitions in the general insurance sector means that, in addition, Jelf is now placing c.£100m of premiums with insurance providers, consolidating Jelf's position as a top ten intermediary in this sector. Terms of the acquisition: • The maximum consideration of the acquisition is £10.0m, subject to completion accounts and the achievement in full of performance targets. • The initial consideration is £6.40m with £6.22m in cash and £0.18m in shares, and is to be satisfied by the issue and allotment of new ordinary shares in Jelf (being 76,133 shares at an issue price of 245p per share). • There is further consideration, payable in cash, depending on the retention of the existing client base and the resulting revenue stream generated by SPS Wellbeing during the two years following completion. The projected payments are in year one £1.87m and £0.83m in year two. Any additional consideration up to the maximum consideration of £10m will be subject to final audited completed accounts. • Jelf has today applied 76,133 new ordinary shares to be admitted to AIM. Admission is expected to take place on 31 January 2007. These consideration shares have been issued entirely to Andrew Grigg, who will remain on the board of SPS Wellbeing Ltd; he is joining the senior management team of the Jelf Group and will continue as Managing Director to run SPS Wellbeing. • The initial consideration has been financed out of a new £20m facility entered into with the Royal Bank of Scotland. • The remaining founders will stay with the business in a consultancy capacity to ensure a smooth transition. • In the last audited accounts of SPS Wellbeing Ltd. dated 31 March 2006, the company achieved normalised profit before tax of £0.5m on turnover of £3.86m, and net assets of £0.65m. Over the last three years turnover has increased from £3.1m in 2004 to £3.86 in 2006. • Agreed cost savings and financial restructuring will generate significantly higher profits going forward. • SPS Wellbeing will remain as a stand-alone operating company within the Jelf Group. Alex Alway, Group Chief Executive of the Jelf Group, comments: "The case foracquiring SPS Wellbeing is compelling in terms of the quality of the people, theclients and the opportunity to engineer future profits. The acquisition willposition Jelf as a real powerhouse in the healthcare market, complementing ourexisting strong position in the insurance market. In addition, the Hampshirelocation fits with our objective of becoming the premier corporate consultancyin the South of England and Wales". Andrew Grigg, Managing Director of SPS Wellbeing, comments: "We have developedsteadily over the last 25 years, but it is now time to move onto the next stageof growth. Joining forces with a group as like-minded as Jelf will be extremelyadvantageous for both our clients and employees. The fact that our clients willbenefit from the Jelf Group's innovative on-line benefits solution is veryexciting." ENQUIRIESJelf GroupAlex Alway, Group Chief Executive 01454 272713Rose Clark, Group Financial Controller 01454 272853 Pelham PRPolly Fergusson 020 7743 6362Philip Dennis 020 7743 6363 Notes for Editors: • Jelf Group was founded by Chris Jelf in 1989. Today, it operatesfrom 19 locations in the South of England and Wales (17 as at 30 September,2006) and offers an extensive range of corporate and private client services • The Group advises over 12,000 corporate clients, principally ininsurance, healthcare, employee benefits, commercial finance and wealthmanagement services. These clients cover the spectrum from significant publiccompanies to small owner-managed businesses. Core Jelf Group clients aremedium-sized owner-managed businesses, typically employing between one to fiftystaff, with a turnover of up to £10 million • The Group has developed a corporate support infrastructure that hasenabled it to make a number of acquisitions over the last five years. Theseacquisitions span all core areas of Jelf's business and have been made to eithersupplement existing operations or to acquire a corporate client base that can beused by the enlarged Group This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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