3rd Apr 2008 07:01
Jelf Group PLC03 April 2008 3 April 2008 Jelf Group plc ("Jelf" or "the Group") Acquisition of Kelquota Limited and its Subsidiaries ("Clarke Roxburgh") Jelf Group plc, the Bristol-based independent full-service brokerage whichsupports businesses and related individuals, is pleased to announce that it hasacquired the entire issued share capital of Clarke Roxburgh and itssubsidiaries; Clarke Roxburgh Insurance Brokers Ltd ("CRIB"), Clarke RoxburghFinancial Planning Ltd and Clarke Roxburgh Mortgages Ltd. Highlights o Substantial increase in Gross Written Premium ("GWP"): the acquisition of Clarke Roxburgh together with the recently-announced acquisition of Argyll Insurance Holdings Limited ("Argyll"), will increase the GWP placed by the Group with insurers from approximately £175 million to approximately £242 million (an increase of £67 million or 38%). CRIB represents £46 million of this growth. In addition, Jelf places approximately £150 million GWP with healthcare providers, taking the overall total of insurance and healthcare GWP to £392 million o Increased geographical footprint: Clarke Roxburgh operates from ten locations across the West Midlands from Redditch to Ross on Wye o Complementary services: the range of services offered by Clarke Roxburgh is complementary to the Jelf proposition. Jelf will strengthen the core offering of general insurance and wealth management and provide access to new services, including employee benefits, healthcare and commercial finance o Funding: the acquisition of Clarke Roxburgh will be satisfied by an initial consideration of £18.34 million to be paid in cash and shares. The acquisition will be partially funded by bank debt (from the existing £40 million facility with RBS) Alex Alway, group chief executive of Jelf Group plc, says: "We are delighted with this acquisition. Clarke Roxburgh is one of the leadingregional insurance brokers with a strong reputation in the market. Our corporateactivity continues and the acquisitions of Clarke Roxburgh and Argyll representnearly a 40% increase in our insurance GWP, taking us to £242 million." ENQUIRIES Jelf Group plcAlex Alway, Group Chief Executive 01454 272713Rose Clark, Director of Finance 01454 272853 Cenkos Securities plcIan Soanes/Max Hartley 020 7397 8900 Pelham PRPolly Fergusson 020 7743 6362Damian Beeley 020 3178 2253 Introduction Jelf is an established corporate intermediary with operations in the North Westand Southern England and South Wales, offering a range of financial services tocorporate clients principally in the areas of commercial insurance, healthcare,employee benefits, wealth management and commercial finance. Clarke Roxburgh On 2 April 2008, Jelf acquired the entire issued share capital of ClarkeRoxburgh and its subsidiaries (Clarke Roxburgh Insurance Brokers Ltd, ClarkeRoxburgh Financial Planning Ltd and Clarke Roxburgh Mortgages Ltd). ClarkeRoxburgh, based in the West Midlands, comprises a general insurance broker and afinancial services and mortgage broker. Besides adding significant GWP (2007: approximately £46 million) to Jelf's coregeneral insurance income, the Clarke Roxburgh acquisition will also extendJelf's geographical footprint as Clarke Roxburgh operates from ten locationsacross the West Midlands. The first payment of the initial consideration of £16.51 million in cash andshares was paid at completion, and comprises £15.79 million in respect of thebusiness of Clarke Roxburgh and £0.72 million in respect of its estimated netassets. From this initial consideration, £8 million is subject to retentionarrangements and certain specified conditions of release. The balance of the initial consideration, estimated at £1.83 million, is subjectto adjustment by reference to the completion accounts, which will test the levelof net assets at completion and the income streams of Clarke Roxburgh in the 12months preceding the completion date, and will be paid in cash. Deferred consideration in relation to the 24-month period following completionhas two elements. The first element relates to the maintenance of the existingturnover and may result in the payment of up to but not exceeding £8.61 millionin cash. Failure to achieve these targets may result in a reduction in theamount paid. An additional amount estimated at £0.86 million is contingent uponthese targets being exceeded. This amount would be payable in cash and is notsubject to maximum limitation. The vendors are also incentivised to introduce Jelf services to new and existingclients of Clarke Roxburgh in the period of 24 months following completion ofthe acquisition. For the year ended 31 March 2007, Clarke Roxburgh reported profit before tax of£0.60 million (2006: £0.59 million) on turnover of £10.76 million (2006: £10.06million) and as at 31 March 2007, Clarke Roxburgh had net assets of £2.33million as at 31 March 2007 (2006: £1.84 million). Outlook GWP in the insurance and healthcare sectors is a key factor in negotiatingcommission rates with insurers where scale is an important driver ofprofitability. Clarke Roxburgh takes Jelf's insurance GWP from approximately£196 million (following the recent acquisition of Argyll Insurance HoldingsLimited) to £242 million. This further establishes Jelf's position as one of theUK's leading independent insurance brokers. Jelf is actively pursuing a growth policy via organic development and targetedacquisitions of profitable insurance and healthcare brokerages. The Boardexpects the current trend of consolidation to be maintained and plans tocontinue to capitalise on the opportunities this creates. Notes to Editors Jelf was founded by Chris Jelf in 1989. Today, Jelf operates from over 20locations primarily in the Southern England and South Wales and offers anextensive range of corporate services, including general insurance, healthcare,employee benefits, commercial finance and wealth management services tobusinesses and individuals. Jelf advises over 20,000 corporate clients and over 25,000 personal clientsacross a range of disciplines. These clients cover the spectrum from significantpublic companies to small owner-managed businesses. Core Jelf clients aremedium-sized owner-managed businesses, typically employing up to 250 staff. Jelf has developed a corporate support infrastructure that has enabled it tomake 15 acquisitions since September 2006. These acquisitions are focused inthe core areas of general insurance and healthcare and have been made to eithersupplement existing operations or as in the case of John Lampier & Son, theManson Insurance Group Limited, Argyll Insurance Holdings Limited and KelquotaLimited (Clarke Roxburgh), to operate as stand-alone entities within the JelfGroup using their own brand names. Further information is available on Jelf at the Group's website: www.Jelfgroup.com. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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