Acquisition

Jelf Group PLC

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

 Acquisition of Beaumonts Insurance Group Limited - Strengthens Jelf's position in the North

Jelf, an independent consultancy which provides a broad range of insurance, financial services and employee benefit services to corporates and individuals, is pleased to announce that it has acquired the entire issued share capital of Beaumonts Insurance Group Limited ("Beaumonts") including its two trading subsidiaries Beaumonts Insurance Brokers Limited and Beaumonts (Leeds) Limited, plus the business and certain of the assets of Beaumonts Risk Management LLP for a total initial consideration of £10.1 million. In addition, deferred consideration of up to £8.28 million (subject to adjustment by reference to the completion accounts) will become payable upon delivery of agreed performance related increases in annualised EBITDA.

Beaumonts is a leading regional Chartered Insurance Broker with offices in Bradford, Horsforth (near Leeds), Shrewsbury and Doncaster. Beaumonts Risk Management, based in Bradford, offers health and safety and employment law advisory services.

The acquisition is in line with the Jelf strategy of growth through organic initiatives and selected acquisitions, and is expected to be immediately earnings enhancing.

The acquisition will be funded by a new £25 million loan facility with Barclays. The new debt facility will be used to repay existing debt of £13.7m and provide cash to finance the acquisition. It is a three year facility and at a margin of 2.1% as compared to a margin of 2.3% in the facility it replaces.

The initial consideration of £10.1 million (subject to a net balance sheet adjustment and adjustment by reference to the completion accounts) will be paid in cash; of this approximately £1.75 million will be used by the vendors of Beaumonts to acquire Jelf shares via on market purchases.

Acquisition Highlights

· Like Jelf, Beaumonts is a Chartered Insurance Broker. This accreditation signals a high quality of technical expertise and commitment to client care.

· The two groups are culturally aligned and share a strong commitment to delivering excellent client service and high quality professional advice. Jelf was awarded the highest "3 Star" award by Investor in Customers in 2014.

· All the employees, including all the directors of Beaumonts who have built the business since 2001 are remaining with the business. They are incentivised to drive the business forward and will work alongside Jelf's experienced integration team.

· Gross written premiums will increase by c. £45 million taking the Jelf Group total to c. £300 million, consolidating Jelf's position as the third largest independent insurance broker in the UK, and giving Jelf greater influence with key providers to obtain improved propositions and client service.

· Jelf has an existing office in Manchester and the acquisition of The Insurance Partnership (June 2013) brought offices in Hull, York and central Leeds. The expanded regional footprint will transact c. 45% of the enlarged Jelf Group's insurance business.

· Beaumonts has strength in the mid-corporate sector (£20K+ annual premium per policy). Around 60% of its business is generated from this sector, an area that Jelf is seeking to expand further into due to the additional value that clients' attach to face to face, high quality technical advice.

· Beaumonts Risk Management LLP provides health and safety and employment law advice services, these services are complementary to the core insurance broking services provided by Beaumonts. This service is not currently available in-house to Jelf clients and provides new opportunities for cross-sales.

· The acquisition provides an opportunity to drive future revenue profitability through revenue synergies.

· Both Jelf and Beaumonts use the same commercial insurance IT platform.

· The FCA has granted approval for the change of control.

Further information on Beaumonts Insurance Group Ltd and Beaumonts Risk Management LLP

The Beaumonts Insurance Group includes two trading subsidiaries, Beaumonts Insurance Brokers Ltd and Beaumonts (Leeds) Ltd. Beaumonts Risk Management LLP offers employment law and health and safety advisory services.

The six original directors (there are now 10) acquired the business now known as Beaumonts Insurance Group in April 2001. Over the next 13 years it grew from employing 15 people with total annual revenue of £0.75 million to today where the company employs 105 people across four locations (Bradford, Horsforth (near Leeds), Doncaster and Shrewsbury) with total group income of £6.9 million in 2013.

The company has made four acquisitions over the past ten years, which have added to its client offering, market presence and geographical footprint. The company now places c £45m GWP per annum and is one of the top 50 independent Insurance Brokers in the UK. The company has attained Corporate Chartered Status with the Chartered Insurance Institute and specialises in corporate risks, property, specialist high net worth, and construction and fleet risks, primarily in the mid corporate sector.

In the year ended 31 December 2013 Beaumonts (including Beaumonts Risk Management LLP) achieved revenue of approximately £6.9 million which resulted in Adjusted EBITDA of approximately £1.5 million:

o Beaumonts Insurance Group achieved revenue of approximately £6.2 million which resulted in Adjusted EBITDA of approximately £1.4 million and profit before tax of approximately £0.5m[1].

o Beaumonts Risk Management LLP achieved revenue of approximately £0.7 million which resulted in Adjusted EBITDA and profit attributable to members of approximately £0.1 million.

· Beaumonts insurance broking and risk management businesses are forecasting revenue of approximately £7.8m and Adjusted EBITDA of approximately £2.1m (before purchase price adjustments) for the year ending 31 December 2014.

· Contributing to the increase in EBITDA, Beaumonts has completed two earnings enhancing acquisitions of local insurance brokers during 2014, which have merged into the existing Beaumonts offices. In aggregate the acquisitions are anticipated to contribute approximately £0.3m of EBITDA in 2014.

Alex Alway, Group CE of Jelf, said:

"I am delighted to welcome Simon Bland and his team to Jelf. We are privileged that Simon and his team have decided that being part of Jelf will enable them to realise their ambitions for future growth. This is a significant acquisition for Jelf; financially we are confident that it will be earnings enhancing in the current financial year and beyond, and furthermore, we hope that it will attract other high quality regional brokers considering their long term options. We have been talking to Simon and his team for some time and during that time we have realised how close we are culturally, and both teams are excited at the prospect of working together."

Simon Bland, Managing Director, Beaumonts

"Beaumonts was never a business for sale, and we had rejected many offers in the past, but right from the first conversations the two teams gelled. It was immediately obvious that Jelf would enable us to realise our ambitions whilst also providing a wider product range for our clients and enhanced career prospects for our staff. The combination of Jelf, Jelf Insurance Partnership and Jelf Beaumonts will be a force to be reckoned with in the North. I am looking forward to working with our new colleagues in Jelf. "

Enquiries:

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

Consideration

Under the terms of the acquisition of Beaumonts Insurance Group Ltd the vendors will receive £9.62 million in cash in initial consideration on completion (subject to net balance sheet adjustment and subject to adjustment by reference to the completion accounts) of which the vendors will use £1.75 million (less broker fees) to purchase Jelf shares in the market following completion. The vendors have agreed to retain such Jelf shares for a minimum period of three years, subject to certain exceptions.

Beaumonts Risk Management LLP, in consideration for the sale of its business and certain of its assets will receive £474,000 in initial consideration in cash on completion (subject to adjustment by reference to the completion accounts).

Deferred consideration up to an estimated maximum of £7.97 million for Beaumonts Insurance Group Ltd and an estimated maximum of £0.32 million for the business and certain assets of Beaumonts Risk Management LLP is payable subject to the achievement of agreed performance related increases in annualised EBITDA across the combined acquired businesses in the two years starting 1 January 2015. The deferred consideration will be payable to the vendors in a combination of cash and, at the discretion of Jelf, either the issue and allotment of new Jelf ordinary shares, transfer of shares from treasury or cash (which the vendors would use to purchase Jelf shares in the market). Any of such resultant shares are to be the subject of a three year lock-in, subject to certain exceptions.