9th Feb 2006 10:00
UNITED UTILTIES PLC AGREES TO ACQUIRE FINANCIAL SERVICES SOFTWARE DEVELOPMENT COMPANY 1ST SOFTWARE GROUP LIMITED United Utilities PLC has agreed to acquire 1st Software Group Limited, acompany that develops, markets and supports the delivery of financial planning,client management and back office administration software to independentfinancial advisers (IFAs). 1st Software Group Limited operates under the brandname `1st' and the intention is to integrate 1st within Vertex FinancialServices, the financial services business of Vertex, United Utilities' businessprocess outsourcing subsidiary.The agreed acquisition of 1st, from its founders led by Mr Michael Cons and MrRory Curran, is for an initial consideration of ‚£25 million, funded by acombination of cash, loan notes and assumed debt, plus a maximum of up to ‚£13.5million subject to certain performance criteria being satisfied over a two-yearperiod following the acquisition.This acquisition supports Vertex Financial Services' growth strategy and willstrengthen its market leading position in the provision of outsourced servicesand technology solutions to the life and pensions, mortgages and investmentindustries.Through its Exchange business, Vertex Financial Services owns and operatesExweb, an internet portal with over 21,500 subscribers, which is the UK'sleading provider of comparative quotations and new business applications forIFAs in the UK life, pensions and investments markets.1st is a successful, profitable business with a pivotal role in the IFA market,through Advisor Office, an integrated client management solution which deliversan `off the shelf', back office administration system, particularly in the lifeinsurance and retail banking sectors, helping IFAs to handle their clientmanagement, sales, marketing and business records.The combination of front and back office capabilities are a compellingstrategic fit. The integration of these two businesses will enhance VertexFinancial Services' market offering, augment its sector presence and providethe opportunity to drive significant growth.In particular, the combination of 1st and The Exchange will allow IFAs toaccess a single system for seamless, straight through processing, linkinginitial customer contact and sales, through Exweb, to ongoing policy servicingand customer relationship management using Advisor Office.Additionally, as the majority of IFAs' financial product sales are currentlyprocessed through paper documentation, straight through electronic automationwill deliver a significant reduction in administration and transaction costsfor product providers and distributors in the life and pensions market.The compelling strategic fit of the two businesses and the successful tradingperformance of 1st should provide for a smooth integration process. Followingthe acquisition, all three founder shareholders of 1st will remain with thebusiness and help to grow the joint offering.The acquisition is conditional on satisfying the appropriate regulatoryrequirements.Chief Executive of United Utilities, John Roberts, said:"When we acquired Marlborough Stirling, now integrated into Vertex FinancialServices, we said we intended to create a leading financial servicesoutsourcing provider in the UK market. The combination of United Utilities'financial strength and stability, plus Vertex Financial Service's knowledge andexperience in this sector, is already giving us the capability of securinglarger, higher value and longer-term contract opportunities than MarlboroughStirling was able to benefit from."This transaction will further enhance Vertex Financial Services' offering,enabling it to extend its market presence and capitalise on the substantialgrowth opportunities available in the rapidly evolving intermediary financialservices sector."United Utilities' Contacts:For further information please contact:John Roberts, Chief Executive +44 (0) 1925 237000Simon Batey, Finance Director +44 (0) 1925 237000Darren Jameson, Investor Relations Manager +44 (0) 1925 237033Evelyn Brodie, Head of Corporate and FinancialCommunications +44 (0) 20 7307 0309NotesVertex is a leading international provider of business process outsourcing andtechnology services and is one of the UK's major customer management servicesuppliers. The company develops and implements a range of outsourcing solutionsfor many leading organisations based on a diversified portfolio of long-termcontracts across private enterprise, financial services, utility, central andlocal government sectors.Vertex Financial Services was formed last year after the acquisition ofMarlborough Stirling. It brought together the existing expertise of Vertex inbusiness process transformation and Marlborough Stirling's knowledge andexpertise in the financial services sector. It is a leading provider ofoutsourced services and technology solutions to the life and pensions,mortgages, and investment industries. It is transforming the way financialservices are bought and sold, extending access to customers and creating newand dynamic electronic marketplaces where product providers, distributors andintermediaries can transact direct, at high speed, electronically via theirchosen channels.The Exchange is part of Vertex Financial Services and offers two maintechnology-based business solutions: Exweb, the UK's market leading financialintermediary portal and Officeweb, an independent financial advisers' backoffice customer relationship management and administration system. Exweb is themost comprehensive intermediary portal in the UK financial services industrygiving financial advisers access to over 300 products from 50 product providersand has over 21,500 registered users.1st Software Group Limited is a private company that develops, markets, andsupports software delivering financial planning, client management and fullback-office administration to independent financial advisers in the financialservices market. The company has grown from a turnover of ‚£0.35 million and 8staff in 1997, to a turnover of ‚£10.2 million and operating profit of ‚£2.6million (unaudited), for the year ended 31 December 2005, and now employs over100 people.United Utilities' ordinary trade on the London Stock Exchange and its ADRs,each equal to two ordinary shares, trade on the New York Stock Exchange underthe Trading Symbol "UU".ENDUNITED UTILITIES PLCRelated Shares:
United Utilities