1st Aug 2007 07:01
Jelf Group PLC01 August 2007 Jelf Group plc ("Jelf") MAJOR ACQUISITION IN THE BRISTOL MARKET 1 August 2007 Jelf Group plc ("Jelf"), a corporate and financial consultancy group, is pleasedto announce that it has acquired the entire issued share capital ofBristol-based insurance broker, John Lampier and Son Ltd ("Lampier"), and aspart of the transaction, 100% of Lampier Professions Ltd. Deal Highlights: • The initial consideration for the acquisition is £12.756m (subject to adjustment), payable at completion in a mixture of cash and new ordinary shares. Further consideration of an estimated £6.869m following the achievement of incremental targets is payable in cash over a two-year Earn Out period. • Lampier was the last sizeable independent commercial insurance broker in the Bristol market. The acquisition of Lampier makes Jelf the dominant broker in the Bristol market. • On a national level, the acquisition consolidates Jelf Group's position as one of the top ten independent insurance brokers in the UK • Lampier's £35m of insurance premiums will be consolidated with the Jelf Group total of £115m, increasing the enlarged group's aggregate premium total by over 30% to around £150m. This is in addition to the £125m of healthcare premiums that Jelf already places on behalf of clients. • The insurance business will benefit from enhanced buying powers of the enlarged group. • A key attraction to Jelf is Lampier's specialist professional indemnity (PI) team; it will be re-branded Jelf and will develop a group wide professional services offering. Bob Hearne is remaining as managing director of Lampier and will join the Jelfoperating board. The majority of the other directors are remaining in theirprevious roles. Three Directors are retiring. The deal fits with Jelf Group's stated strategy of acquiring strong, profitableinsurance brokers in Southern England and South Wales. The combinedJelf-Lampier entity will create a strategic barrier to competitors entering themarket in the South West and is expected to lead to further acquisitions in theregion. The Jelf Board believes that the application of enhanced buying power of theacquisition, plus the investment to be undertaken, coupled with the targets setfor the earn-out, will generate profits going forward. "Jelf and Lampier have complimentary areas of expertise and working together wewill achieve a commanding presence in and across the whole of the South West;there is tremendous potential for growth," says Alex Alway, chief executive ofJelf Group. Lampier managing director Bob Hearne adds: "The insurance market is changingrapidly and scale is increasingly important in order to provide the bestpossible support for clients. Working with the Jelf Group gives us theopportunity to retain our Bristol roots, offer our clients a greater range ofservices and secure a future for our staff." Terms of the Acquisition Initial consideration of £12.756m ("Initial Consideration") is payable uponcompletion in a mixture of cash and new ordinary shares of Jelf. The InitialConsideration is subject to an adjustment for Lampier's net assets/liabilitiesas at completion and further adjustment if the designated earn-out targets arenot met. The Initial Consideration is a cash payment of £10.973m and £1.783m beingsatisfied by the issue of 694,418 new ordinary shares of 1p each at an issueprice of 256.8 pence per share, credited as fully paid ("the ConsiderationShares"). Further consideration, estimated at £6.869m ("Earn Out"), is payable in cash intwo tranches following completion following full achievement of agreedincremental performance targets. The total of the initial consideration and the Earn Out is estimated at£19.625m; however, this is only payable if all the designated and agreed targetsare achieved in full. In addition, by way of further consideration, payments relating to theintroduction of new clients to Jelf or its group members during the Earn Outperiod is also payable. The acquisition agreement contains warranties, indemnities, and restrictivecovenants given by certain of the vendors. Funding The cash element has been financed out of a new £30m facility with the RoyalBank of Scotland Plc ("the Bank"), which will replace the existing facility. Jelf has today applied for 694,418 new ordinary shares (being the ConsiderationShares) to be admitted to AIM. Admission is expected take place on 7th August. Save for Mr Squires, Mr New, and Mr Lewis (who are retiring upon completion)all of the vendors will remain with Lampier in either a senior management ordirector capacity. As a result the company now has 25,562,894 shares in issue. The acquisition agreement provides for lock-in arrangements in respect of theConsideration Shares under which for a period of two years following completion,the vendors are not permitted to dispose of the Consideration Shares (save insome limited circumstances). About Lampier After Jelf, Lampier is the largest privately-owned independent insurance brokerin the Bristol market. Lampier handles around £35m of premiums on behalf ofclients. This will be consolidated with the Jelf Group total of £115m, toincrease the enlarged group's aggregate premium total to around £150m, inaddition to the £125m of healthcare premiums that the Jelf Group places onbehalf of clients. In the last audited accounts to March 2007, Lampier had consolidated turnover of£6.768m, with EBITDA of £1.975m. Over the last three years, Lampier'sconsolidated turnover has increased 19% from £5.670m* to £6.768m. (*Proformaturnover including acquisitions during the three-year period). The Lampier brand will be retained along side the Jelf Group brand to maximisecoverage and impact. The professional indemnity team has moved to the Jelfbrand in order to maximise cross-sales opportunities across the Jelf Group'sexisting corporate client base. Lampier and its subsidiaries ("the LampierGroup") will be managed as stand-alone company within the Jelf Group. Lampieris in the process of moving to the same back office system as the Jelf Insuranceand Healthcare divisions. This will facilitate cross-group operational andfinancial management. Information on Jelf Group can be accessed via its website: www.jelfgroup.com Contact: Jelf Group plc 01454 272 713Alex Alway, Group Chief Executive Pelham PRPolly Fergusson 0207 743 6362 ENDS Notes to Editors: Jelf Group was founded by Chris Jelf in 1989. Today, the Jelf Group operatesfrom a number of premises in the South of England & Wales and offers anextensive range of corporate services; Jelf advises over 17,500 corporate clients across a range of disciplines. Theseclients cover the spectrum from significant public companies to smallowner-managed businesses. Core Jelf clients are medium-sized owner-managedbusinesses, typically employing up to 250 staff; Jelf has developed a corporate support infrastructure that has enabled it tomake a number of acquisitions over the last few years. These acquisitions spanall core areas of its business and have been made to either supplement existingoperations or to acquire a corporate client base that can be utilised by theenlarged group. The acquisitions made since the start of this period are asfollows: October 2006: Hern Waters & Co. - Acquisition of a Herefordshire basedcommercial insurance intermediary October 2006: North Cotswold Insurance Services - Acquisition of a book ofcommercial business from an Oxfordshire based commercial insurance intermediary November 2006: Haines Wallace (Insurance Brokers) Ltd - Acquisition of aPlymouth based commercial insurance intermediary December 2006: John Wason (Insurance Brokers) - Acquisition of a book ofcommercial business from a Reading based commercial insurance intermediary January 2007: SPS Wellbeing Ltd - Acquisition of a major corporate healthcareintermediary based in Ringwood February 2007: Lloyd & Whyte (South West) trading as Sedgemoor InsuranceServices - Acquisition of a book of commercial insurance business from aSomerset based intermediary April 2007: Sunninghill Insurance Brokers Ltd - Acquisition of an Aldershotbased insurance intermediary May 2007: Cheltenham Insurance Brokers Ltd and Cheltenham Insurance Brokers Lifeand Pensions Ltd - Acquisition of a Cheltenham based insurance and financialservices intermediary Further information is available on Jelf Group at the Group's website:www.jelfgroup.com. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
JLF.L