Acquisition of KLA Holdings Limited

Charles Taylor plc

Acquisition of KLA Holdings Limited

Charles Taylor plc (LSE: CTR), a leading provider of professional services to clients in the global insurance market, announces that it has acquired KLA Holdings Limited and its subsidiary Knowles Loss Adjusters Limited (Knowles) for a maximum debt free / cash free total consideration of £3.3m. Knowles is a UK loss adjusting business focused on UK and Ireland property and casualty (P&C) claims.

Knowles' business will complement the loss adjusting services already provided by Charles Taylor Adjusting (CTA). CTA provides loss adjusting services across the energy, marine, aviation, property & casualty and special risks sectors. CTA specialises in the settlement of larger and more complex losses arising from major insured incidents and losses. The acquisition will expand CTA's global network through the addition of 10 UK offices.

Knowles targets UK commercial, personal, construction and professional lines claims. The company employs around 70 personnel and will continue to trade under the Knowles name following the acquisition.

The acquisition is in line with Charles Taylor's strategy to deliver growth in its core Professional Services businesses. David Parker, a founder and managing director and Simon Smith, a director of Knowles will be instrumental in driving the business forward under the new Charles Taylor ownership.

The initial consideration for 100% of the business is £1.3m on a debt free / cash free basis. The initial consideration (adjusted for working capital and cash held in the company) will be satisfied by the issue of 633,393 ordinary shares in Charles Taylor plc (the "Consideration Shares") (based on the 30 day average share price to 8 May 2014 ("Market Value"). The vendors intend to sell 571,134 Consideration Shares following publication of this announcement. In the event that the sum realised by the vendors is less than the Market Value, Charles Taylor shall pay the vendors an amount in cash equal to such shortfall.

After taking account of the costs associated with the transaction the transaction is expected to be modestly earnings enhancing for the current financial year ending 31 December 2014.

The sellers are entitled to three annual earn-out payments subject to profit thresholds being met. The maximum debt free / cash free total consideration (including earn-out payments) is £3.3m. Up to 50% of the earn-outs can be paid in shares at the discretion of Charles Taylor.

Earnings after tax for year ending 31 July 2013 were £0.4m and the gross operating assets as at 31 July 2013 were £1.6m.

Application will be made for the 633,393 ordinary shares to be admitted to the premium segment of the Official List of the Financial Conduct Authority and to be admitted to trading on the London Stock Exchange on its main market for listed securities (together, "Admission"). Admission is expected to take place on 22 May 2014. On Admission the ordinary shares will rank Pari Passu in all respects with the existing ordinary shares in the capital of the Company.

David Parker, Managing Director, Knowles Loss Adjusters said:

"Knowles has grown and developed over the last 22 years because of our commitment to deliver a superior service by experienced and specialist staff. Charles Taylor has a similar ethos of delivering outstanding professional claims management services and a global reputation in handling major losses. Our approach and the services we offer make this an ideal combination for our clients and staff. We are very pleased that Knowles has joined the Charles Taylor Group and look forward to working together to continue to grow the business under their ownership."

David Marock, Group Chief Executive Officer, Charles Taylor plc said:

"Knowles is an excellent fit for us and will complement Charles Taylor Adjusting's existing business. CTA is already one of the leading specialist loss adjusters in the UK and international insurance markets. This acquisition will allow us to develop and grow our UK loss adjusting capability and brings us an established business, client base and network of UK offices, which will position us well to respond to tenders for those international and national account nominations, which require a network of offices across the UK as well as overseas. This acquisition is a further demonstration of our commitment to grow the Group's revenue and profit based on our professional services expertise."

-ENDS-

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Notes to editors

· Charles Taylor plc is a leading provider of professional services to clients across the global insurance market. The Group has been providing services since 1885 and today employs over 1,000 staff in 60 offices spread across 25 countries in the UK, the Americas, Asia Pacific, Europe and the Middle East.

· The Group offers services, principally on a fee-based model and operates through three businesses - Management, Adjusting and Insurance Support Services. Charles Taylor also owns insurers in run-off.

· Further information is available at www.ctplc.com 

Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences are "forward-looking statements" within the meaning of the United States federal securities laws. These forward-looking statements reflect the Group's current expectations concerning future events and actual results may differ materially from current expectations or historical results.