10th Nov 2005 07:03
Charles Taylor Consulting PLC10 November 2005 10 November 2005 Charles Taylor Consulting plc Proposed Acquisition of LCL Highlights • Charles Taylor Consulting plc ("CTC") announces the acquisition of LCLGroup Limited ("LCL Services") and LCL Acquisitions Limited ("LCL Acquisitions")(together, "LCL"), two separate businesses currently under common ownership. • LCL Services provides run-off management and consulting services toLCL Acquisitions and other insurers. LCL Acquisitions has been established toacquire insurance companies that have ceased underwriting and to realise valuefrom them. • The consideration for LCL Services comprises £21.5 million in cash andthe issue of approximately 0.6 million Ordinary Shares of CTC ("Shares"). Theconsideration for LCL Acquisitions comprises an initial allotment of 1.9 millionShares together with an earnout of up to 1.9 million Shares and £10.0 million inloan notes depending on the level of distributable profits achieved by theexisting LCL Acquisitions companies together with two identified potentialacquisitions ("LCL Acquisitions At Completion"). 1.6 million of the Shares to beissued will be locked up for four years. • The acquisition of LCL Services delivers an immediate revenue streamwhich increases the scale, scope of work and visibility of earnings for CTC.Whilst LCL Acquisitions At Completion is not expected to deliver value directlyfor CTC, the acquisition of LCL Acquisitions secures a large proportion of LCLServices' income and provides an effective platform for future acquisitions.This is expected to result both in an increase in income to LCL Services and thepotential realisation of value from future acquired vehicles. • Market commentators estimate that in the UK there is in excess of£38bn of run-off liabilities in non-life companies and a further £135bn in lifecompanies. • Key attractions of the Acquisition are: a) LCL provides access to the insurance run-off market. i) The LCL management team have a track record of extracting significant value from run-off businesses acquired to date. ii) The LCL management team are well placed to identify and acquire more run-off businesses. A substantial number of new opportunities exist. b) This complements and adds to CTC's range of insurance services skills. c) Synergies with CTC's existing operations. • The Acquisition brings new expertise and experience to the CTC Boardand Executive teams. Andrew Brannon, one of the founder directors of LCL, willjoin the Board following completion of the Acquisition. • The Acquisition is conditional, inter alia, upon Shareholderapproval. Commenting on the Acquisition, John Rowe, Chairman and Group Chief Executivesaid "This acquisition provides Charles Taylor Consulting with an experiencedmanagement team in the insurance run-off sector, which offers considerablegrowth opportunities. This is a market we have been considering for some time,as a natural extension to our existing activities." Enquiries Charles Taylor Consulting plc Tel: 020 7759 4955John Rowe, Chairman and Group Chief ExecutiveGeorge Fitzsimons, Group Finance Director Financial Adviser and Joint BrokerDresdner Kleinwort Wasserstein Tel: 020 7623 8000Robert Petch, Director Joint BrokerAltium Capital Limited Tel: 020 7484 4040David Hart, Managing Director Dresdner Kleinwort Wasserstein Limited, which is authorised and regulated by theFinancial Services Authority, is acting for Charles Taylor Consulting plc andfor no-one else in connection with the Proposals and will not be responsible toanyone other than Charles Taylor Consulting plc for providing the protectionsafforded to customers of Dresdner Kleinwort Wasserstein Limited or for affordingadvice in connection with the Acquisition or any matters described herein. Altium Capital Limited, which is authorised and regulated by the FinancialServices Authority, is acting for Charles Taylor Consulting plc and for no-oneelse in connection with the Acquisition and will not be responsible to anyoneother than Charles Taylor Consulting plc for providing the protections affordedto customers of Altium Capital Limited or for providing advice in connectionwith the Acquisition or any matters described herein. Words and expressions when used in this announcement shall have the same meaningas defined in the section entitled Definitions at the end of this announcement. 10 November 2005 Charles Taylor Consulting plc Proposed Acquisition of LCL Introduction The Board is pleased to announce that it has agreed the terms for theacquisition of LCL Services and LCL Acquisitions, two separate businessescurrently under common ownership. LCL Services provides run-off management andconsulting services to insurers. LCL Acquisitions primarily comprises acquiredinsurance operations closed to new business. Charles Taylor Consulting is a provider of professional services to insurerssome of which are potential clients for those engaged in running off books ofbusiness or insurance companies that have ceased to underwrite businesscompletely. In order to match its capabilities to this requirement of itspotential client base, the Group has been considering entry into the insurancerun-off sector for some time. This acquisition enables it to secure not only amanagement team with the relevant life and non-life experience but also accessto additional, durable long term income streams in an area with considerablegrowth prospects. Market commentators estimate that in the UK alone there is in excess of £38billion of run-off liabilities in non-life companies and a further £135 billionin life companies. The skills required in the run-off sector are similar tothose provided by Charles Taylor Consulting to its existing clients.Accordingly, the Board believes that there are significant opportunities tocreate value for Shareholders in this market sector. The consideration for LCL Services will be £21.5 million in cashTheconsideration will be adjusted to the extent that the adjusted net assets of LCLServices at 31 October 2005 exceeded £1.5 million by the issue of Shares. TheBoard currently anticipates adjusted net assets at 31 October 2005 to beapproximately £3.0 million. The initial consideration for LCL Acquisitions will be satisfied by the issue of1,851,851 Shares. Based on a Share price of 275 pence (being the mid marketclosing Share price on 8 November 2005, the latest practicable date prior tothis announcement), these Shares have a value of approximately £5.1 million. Inaddition, up to 1,851,851 Shares together with loan notes with an aggregatenominal value that is expected to be £10.0 million or less may be due to theSellers depending on the amount of adjusted distributable reserves produced bythe businesses currently owned by LCL Acquisitions and two identified potentialacquisitions. The Acquisition is conditional, inter alia, upon Shareholder approval. AShareholder circular seeking approval for the Acquisition is expected to bedispatched later today. Hermes Pension Management, through Hermes InvestmentManagement Limited and Hermes Focus Asset Management Limited, has givenirrevocable undertakings on behalf of their clients (who together form CharlesTaylor Consulting's largest shareholder) to procure that their clients vote infavour of the resolution to approve the Acquisition in respect of 4,532,177Shares representing 12.45 per cent. of the current issued share capital ofCharles Taylor Consulting. Background to and reasons for the Acquisition Charles Taylor Consulting provides a wide range of insurance-related services.It is currently split into two operating divisions, Management and Services. TheManagement division provides management and investment management services toMutuals and captive insurance companies, as well as risk management advice. TheServices division provides claims handling, loss adjusting, surveying andtechnical advice principally to insurers. The areas in which Charles Taylor Consulting operates are affected by theinsurance cycle. Hard (or high premium) insurance markets tend to favour theMutuals that Charles Taylor Consulting creates and manages. Soft insurancemarkets tend to give rise to higher levels of insured losses and are thereforegood for Charles Taylor Consulting's Services business. The Group's strategy hasbeen to position itself to be able to achieve strong results irrespective as tothe state of the insurance market. Historically, the Management division has grown through increases in the numberand size of the Mutuals that Charles Taylor Consulting manages. The growth ofthe Services division has been augmented by acquisitions, which have extendedits range of skills and geographic reach. The last such acquisition was BatemanChapman in January 2004. The Board is seeking to enhance Shareholder value through building new revenueand profit streams which are long-term and predictable and have less dependenceon the occurrence of insured events. The Board believes the run-off market hasthese characteristics. Through the provision of services to companies inrun-off, service companies are able to secure long-term contracts withpredictable income streams. In addition, value can be extracted through theactive management of the run-off companies' assets and liabilities and thereduction of ongoing administration costs. The Board believes the acquisition of LCL to be the best way for Charles TaylorConsulting to enter the run-off sector and to participate in this marketplaceactively because: • LCL's management has a proven ability to identify and complete theacquisition of insurers in run-off; • LCL's experience covers both life and non-life companies; • LCL already has a range of books of business which it manages; • LCL is well placed to compete for opportunities which are oftencomplex, specialist and/or offshore; • LCL management has a track record of realising value fromacquisitions; and • LCL also offers a range of other specialist services, which arecomplementary to Charles Taylor Consulting's existing operations. As important, LCL's culture complements that of Charles Taylor Consulting. Information on LCL LCL is owned by Andrew Brannon and Philip Holden in equal proportions. Itsoperations are organised into two principal units, LCL Services and LCLAcquisitions. It has created substantial value for its shareholders throughmanagement and success fees, the active management of assets and liabilities andthe reduction of ongoing administration costs. LCL Services provides run-offmanagement and consulting services to insurers. LCL Acquisitions comprisesacquired insurance operations closed to new business, insurance administrationservices in the Isle of Man and debt collection services. LCL's strategy to datehas been to provide services to third party insurance companies and to acquireinsurers in run-off and, where appropriate, provide them with managementservices. Andrew Brannon, a Chartered Accountant, is a specialist in corporate recoveryand insolvency. He has an established reputation for corporate rescue andliquidation in the financial and insurance sectors, including London marketreinsurance companies, Lloyd's agents and brokers. Philip Holden is a solicitor,a licensed insolvency practitioner and a former equity partner at Dibb LuptonAlsop. He was formerly Head of Financial Recovery at Lloyd's and a member of theexecutive team responsible for the implementation of the Reconstruction andRenewal plan for the Lloyd's insurance market. They each established their ownseparate businesses in 1997 and developed them independently before combiningthem to form LCL Services in 2002. At Completion, Andrew Brannon and Philip Holden will enter into serviceagreements with Charles Taylor Consulting. The agreements will be for a periodof two years and will continue unless terminated by either party on twelvemonths' written notice to be given at any time after the end of the two-yearperiod. The service agreements include various restrictive covenants intended to preventAndrew Brannon or Philip Holden from competing with the Group in the business inwhich they are active in the UK, Channel Islands, Isle of Man or Bermuda for sixmonths after the end of their employment. There are also non-solicitationrestrictions in relation to clients and employees for a period of twelve monthsafter the end of their employment periods. The service agreements also provide an incentive mechanism whereby each ofAndrew Brannon and Philip Holden is entitled to 20 per cent. of the adjusteddistributable reserves created by insurance companies acquired by the EnlargedGroup and introduced by Andrew Brannon or Philip Holden for so long as heremains an employee of the Group. LCL Services LCL Services provides a variety of services including recovery, commutation,litigation management, claims management and processing, specialist politicalrisk, credit adjusting, insurance insolvency and run-off processing. Revenuesare generated from management fees, consulting and other advisory services withremuneration based on a variety of options. LCL Services' most significantcontract is a management contract with BIL (part of LCL Acquisitions). Underthis contract various services, most notably treaty administration, areoutsourced by LCL Services to external service providers for which LCL Servicespays fixed and success-related fees. Trading performance Set out below is a summary of the recent trading performance of LCL Services. Year ended 31 March 2003 2004 2005 £'000 £'000 £'000Turnover 2,594 5,674 9,117Operating profit 556 829 2,657Profit before tax 557 1,089 2,733Gross assets 920 2,600 4,406Net assets 236 960 2,738Operating cash flow 215 872 1,632 The significant growth in turnover and profit after the year ended 31 March 2003was as a result of the management contract with BIL. Under this contract, whichcommenced in September 2003 and is expected to continue until at least September2008, LCL Services receives a fixed annual fee of £3.6 million plus success feesfor successful commutations. In the year ended 31 March 2005, turnover from thecontract amounted to £7.5 million (2004: £1.8 million) which included successfees of £3.9 million (2004: nil). Under LCL Services' current outsourcingcontract third parties were paid an annual fee and a proportion of success feespayable on commutation. Given the resources required to service the BIL contract, revenue from otherparties fell during the period. LCL management is now focusing on reversingthis. LCL Acquisitions LCL Acquisitions' profits are generated by realising value from acquiredinsurance companies in run-off. LCL Acquisitions' business strategy can involvesharing realised value between the vendor and LCL Acquisitions. As a result,both parties can benefit from LCL Acquisitions' management of that business. LCL Acquisitions completed its first acquisition, BIL, in September 2003. InFebruary 2005, it acquired (through a subsidiary Metrowise Limited) a secondinsurance company, LCL Life. In August 2005, LCL Life acquired two further lifeinsurance companies. In October 2005, LCL Acquisitions acquired AIIB, a Londonmarket reinsurance aviation business based in Bermuda for approximately £1million. LCL Acquisitions also owns a debt-collecting agency which provides bulkdebt recovery services to commercial entities, institutional lenders, serviceprofessionals and insolvency practitioners. It also owns indirectly 60 per cent.of an administration services provider in the Isle of Man. As at 31 December 2004, LCL Acquisitions (excluding LCL Life and AIIB) had grossassets of £171.9 million and generated a loss before tax of £2.3 million for theperiod from 8 August 2003 to 31 December 2004. LCL Life had gross assets at 30September 2004 of £204.3 million, including net assets attributable to thelong-term business fund, and generated profit before tax for the twelve monthsto 30 September 2004 of £6.2 million. BIL BIL wrote a book of non-life insurance and reinsurance risks in the Londonmarket. It was closed to new business in November 2002. BIL is managed under aservice contract with LCL Insurance Services Limited (a subsidiary of LCLServices), which is expected to run until at least September 2008. BIL's net assets as at 30 June 2005 as reported in the unaudited managementaccounts were £4.5 million (with assets of £141.9 million and liabilities of£137.4 million). In addition, as at 31 December 2004, BIL had £30.9 million of tax losses whichCharles Taylor Consulting has been advised should be available to relieveagainst UK taxable profits of the Enlarged Group. Utilising these tax lossesoutside the LCL Group would have the effect of accelerating the adjusteddistributable reserves and thus the contingent deferred consideration generatedby LCL Acquisitions under the Sale and Purchase Agreement. BIL has net assets of£4.5 million and hence only a relatively minor deterioration in BIL's financialposition could lead to the insolvency of that business. Were this to occur thebenefit of any unutilised tax losses would be likely to be lost. The Board believes that were BIL to become insolvent, LCL would be best placedto continue to manage the run off and would be retained by a liquidator under amanagement contract to assist with the administration of the estate goingforward. The FSA has given its agreement to Charles Taylor Consulting becomingthe new ultimate controller of BIL. Charles Taylor Consulting has informed theFSA that no further funds will be made available to BIL. The Board believes thatthe main benefit to Charles Taylor Consulting relating to BIL is through theservices contract with LCL Services. LCL Life LCL Life is a life insurance run-off operation registered in the Isle of Man. Itmarketed a number of investment protection and savings plans primarily aimed atthe expatriate market but was closed to new business in 1999. LCL Life was acquired in February 2005 from AAM for consideration of £12.1million in cash, of which £4.7 million was deferred. The initial considerationfor the acquisition was financed by a £6.5 million facility from The Royal Bankof Scotland PLC and by loans from LCL Services, LCL Acquisitions, Andrew Brannonand Philip Holden. From acquisition to 25 June 2005 £1.4 million of capital wasreleased to shareholders, of which £0.9 million has been returned to The RoyalBank of Scotland PLC in loan repayments. The Embedded Value of LCL Life wasassessed by Charles Taylor Consulting at £18.7 million as at 25 June 2005 usinga discount rate of 9 per cent. LCL Life's immediate parent has bank debt anddeferred consideration liabilities relating to its acquisition. Since 25 June2005 a further £1.2 million of capital has been released and £0.7 million hasbeen repaid to The Royal Bank of Scotland PLC. At 3 November 2005, theoutstanding loan balance owed to The Royal Bank of Scotland PLC was £4.9million, the outstanding loans owed to Andrew Brannon and Philip Holden totalled£0.4 million, loans owed to other LCL companies were £1.1 million and the entire£4.7 million of deferred consideration was outstanding. In the nine months ended 30 September 2002, following the development of asubstantial long term business fund surplus, approximately £12.5 million wasreleased to shareholders' funds. As further surpluses were created andidentified, additional transfers from the long term business fund were made, atlower levels and regular intervals. The release in the year ended 30 September2004 was approximately £5.0 million. In August 2005, LCL Life acquired two further businesses from AAM for £1.1million. The Board believes that these acquisitions will help create additionalvalue within LCL Life through the reduction of the level of costs and regulatorycapital requirements. Whilst further significant releases are anticipated over the remaining life ofLCL Life, the Board anticipates that following the payment of the deferredconsideration due to AAM and the external borrowings as they fall due, most ofthe balance of Embedded Value in LCL Life after repayment of bank debt anddeferred consideration payments will accrue to the benefit of the Sellers underthe terms of the Acquisition. Future Strategy The LCL business will form a separate division within the Enlarged Group. Thenew division will continue to manage and provide services to insurers in run-offunder its ownership and to third parties. The acquisition of further insurers inrun-off in both the life and non-life sectors will be actively pursued by LCLAcquisitions where earnings can be generated for Charles Taylor Consulting usingthe established brand of LCL in this business area. LCL Acquisitions iscurrently in discussions with a view to acquiring a number of insurers inrun-off. With the additional resources available from the Enlarged Group, LCLServices will seek both to extend its client base and gain more business fromexisting clients. Where appropriate, Charles Taylor Consulting will provide services to the LCLbusinesses, eliminating the need to outsource. It is proposed that CharlesTaylor Investment Management, part of the Management division, will provideadvisory and other investment management services to BIL and LCL Life. Althoughthe assets of BIL and LCL Life will decline, additional funds may be availableas and when further acquisitions are completed. Charles Taylor Consulting has informed the FSA that no further funds will bemade available to BIL. In effecting any future acquisitions of regulatedentities the Board expects to adopt a similar approach. The overall strategy for Charles Taylor Consulting's other businesses,Management and Services, will not be changed. Should appropriate value enhancingopportunities arise, these will be actively pursued to augment organic growth. Financing The consideration will be funded by the payment of £21.5 million in cash withthe balance payable in Shares or loan notes. Charles Taylor Consulting hasreached agreement with The Royal Bank of Scotland PLC on the terms of a new bankfacility for up to £48.1 million for the purposes of financing the Acquisitionand refinancing its existing facilities. An existing loan of £4.9 million toMetrowise Limited (a subsidiary of LCL Acquisitions) from The Royal Bank ofScotland PLC will continue after the Acquisition and is not included in thefigure of £48.1 million. Financial effects of the Acquisition Following Completion both LCL Services and LCL Acquisitions will be incorporatedinto Charles Taylor Consulting's consolidated financial statements. Purchaseaccounting under IFRS will be applied to the consolidated accounts for the yearending 31 December 2005. Balance Sheet The consolidated balance sheet will include the fair value of the assets andliabilities of LCL Services and LCL Acquisitions (including the assets andliabilities held in the run-off insurance businesses). On consolidation, certainrelated party balances included in the balance sheets of LCL Services and LCLAcquisitions will be eliminated because they will become intra-group items. Thefair values of assets and liabilities consolidated may differ from their bookvalues. During January 2005, LCL Life undertook a capital restructuring as apre-completion requirement of its sale to LCL. The effect of this, and otherpost balance sheet events, was to reduce total shareholders funds of LCL Lifefrom £24.1 million to £1.1 million, to reduce the cash balance by £23.7 millionand to cancel the deficit on the profit and loss account. At 30 June 2005, theunaudited management accounts of LCL Life showed total net assets ofapproximately £177.8 million, represented by shareholders' funds of £1.6 millionand a Long Term Business Fund of £176.2 million (with assets of £228.4 millionand liabilities of £52.2 million). The acquisition of two further lifecompanies, AIL and its subsidiary AIL (IoM), from AAM in August 2005 has addedadditional assets and liabilities to LCL Life. The total audited net assets ofAIL were £1.9 million at 31 March 2005. The Directors estimate that the difference between the cost of the purchase(consisting of both consideration and acquisition costs) and the fair value ofthe net assets acquired will be approximately £22 million. It is expected thatmost of this figure represents goodwill, although some part of it is expected tobe an intangible asset representing existing external customer relationships inLCL Services, which will be amortised through the profit and loss account overits useful economic life, currently estimated at 5 years. Goodwill will besubject to an annual impairment review. Additional intangible assets will ariseon fair valuation of insurance assets and liabilities and will be amortised overthe relevant run-off period. To the extent that the payment of further consideration is deemed by the Boardto be probable and can be measured reliably, a provision will be made. Anymovement in this provision should reflect the results of LCL Acquisitions, tothe extent not already recognised in fair valuation of assets and liabilities. Profit and loss account The consolidated profit and loss account for the Enlarged Group will include: • The revenue and expenditure for LCL Services and LCL Acquisitions,which will reflect the elimination of intra-group items. The profits from LCLAcquisitions will be offset by amortisation of intangible assets and movementsin the provision for deferred consideration. • The amortisation of intangible assets and any impairment in the valueof goodwill. • Investment management fees generated as a result of new contractsbetween Charles Taylor Investment Management and the insurance run-offbusinesses. • An additional interest charge of approximately £1.5 million per annumat current interest rates relating to the bank borrowings arising from theAcquisition. Terms of the Acquisition Charles Taylor Consulting has agreed to buy LCL for an initial consideration of£21.5 million in cash and 1,851,851 Shares. In addition, up to 1,851,851 Sharestogether with loan notes with a nominal value that is not expected to exceed£10.0 million may become payable depending on the amount of distributablereserves produced by the businesses owned by LCL Acquisitions and two identifiedpotential acquisitions. The consideration will be adjusted to the extent thatthe adjusted net assets of LCL Services as at 31 October 2005 exceed £1.5million. In the case of the adjusted net assets exceeding £1.5 million as at 31October 2005, Charles Taylor Consulting will pay the balance due in Shares,based on a Share price of 270 pence per Share. The Board currently anticipatesthe net assets at 31 October 2005 will be approximately £3.0 million. To the extent that the profits before tax of LCL Services fall below £3.0million for the period from 1 April 2005 to 31 December 2006 and £2.5 millionfor the year ended 31 December 2007, the Sellers will pay in cash the shortfallto Charles Taylor Consulting. In addition, to the extent to which the investmentmanagement fees from LCL Acquisitions companies payable to Charles TaylorInvestment Management fall below £1.0 million for the year after Completion and£0.8 million for the year thereafter, the Sellers will also pay in cash theshortfall to Charles Taylor Consulting. The Sellers have undertaken not to sell or otherwise transfer 1,620,371 of theinitial consideration Shares for a period of 4 years from Completion other thanin limited specified circumstances. The Acquisition is conditional, inter alia, upon Shareholder approval. Board changes Following Completion Andrew Brannon will be appointed to the Board of CharlesTaylor Consulting as an executive director and will be appointed Chairman of thenew division of Charles Taylor Consulting comprising the LCL businesses. PhilipHolden will be appointed Chief Executive Officer of the new division and willsit on Charles Taylor Consulting's executive committee. Current Trading and Prospects of the Enlarged Group As set out in Charles Taylor Consulting's interim results statement, 2005 hasbeen and will continue to be a year during which investment is made in thebusiness, particularly the Management division, to reinforce service levels andgrowth prospects for the future. This investment involves recruiting new staffand relocating personnel to new locations. The backdrop against which the Group is now operating has changed significantlyfor the better both compared to the first six months of last year and the firstsix months of this year. Recent events, in particular Hurricanes Katrina andRita, offer the Group a number of opportunities, which are expected to flowthrough into 2006. The Board believes that the Acquisition will be enhancing to Charles TaylorConsulting's earnings per share. However, this does not mean that the futureearnings per share of Charles Taylor Consulting will necessarily match or exceedits historical published earnings per share. Over the longer term, theperformance of LCL will depend on LCL's ability to complete further acquisitionsand win external business. LCL Acquisitions has a number of prospects currentlyunder consideration. Listing and Dealing Application will be made to the UK Listing Authority for the ConsiderationShares to be admitted to the Official List and to the London Stock Exchange forthe Consideration Shares to be admitted to trading on its market for listedsecurities. The Consideration Shares will be registered securities and may beheld in uncertificated form. The Consideration Shares will be credited as fullypaid and will rank pari passu in all respects with the existing Ordinary Shares,including the right to receive all dividends and other distributions declared,made or paid. No Charles Taylor Consulting Shares have been or will be marketed or madeavailable to the public in whole or in part in conjunction with the applicationfor listing and trading of those securities. Dealings on the London Stock Exchange in the Consideration Shares are expectedto commence on or before 8.00 a.m. on 1 December 2005. Shareholder undertaking Hermes Pension Management through Hermes Investment Management Limited andHermes Focus Asset Management Limited has given irrevocable undertakings onbehalf of their clients (who together form the Company's largest shareholder) toprocure that their clients vote in favour of the resolution to approve theAcquisition in respect of 4,532,177 Shares representing 12.45 per cent. of thecurrent issued share capital of Charles Taylor Consulting. Expected timetablePosting of shareholder circular 10 NovemberEGM 28 NovemberCompletion 1 December Definitions "AAM" Aberdeen Asset Management PLC; "Acquisition" The proposed acquisition of the entire share capital of LCL Services and LCL Acquisitions pursuant to the terms of the Sale and Purchase Agreement and the GB Agreement; "Act" The Financial Services and Markets Act 2000; "AIIB" Associated International Insurance (Bermuda) Limited; "AIL" Aberdeen International Limited, a wholly owned subsidiary of LCL Life; "AIL (IoM)" Aberdeen International Assurance (IoM) Limited, a wholly owned subsidiary of AIL; "BIL" Bestpark International Limited (formerly called Trenwick International Limited), a wholly owned subsidiary of Bestpark; "Board" or "Directors" The directors of Charles Taylor Consulting; "Charles Taylor Consulting" Charles Taylor Consulting plc; "Charles Taylor Investment Management" Charles Taylor Investment Management Company Limited; "Completion" Completion of the Acquisition pursuant to the terms of the Sale and Purchase Agreement and the GB Agreement; "Consideration Shares" The 1,851,851 Shares to be issued to the Sellers and to Gerard Barron on Completion under the Sale and Purchase Agreement and the GB Agreement; "Directors" The directors of Charles Taylor Consulting; "Enlarged Group" The Charles Taylor Consulting Group following Completion; "EGM" or "Extraordinary General Meeting The extraordinary general meeting of Charles Taylor Consulting to be" held at the offices of Charles Taylor Consulting, International House, 1 St Katharine's Way, London E1W 1UT at 12.00 p.m. on 28 November 2005, or any adjournment thereof, notice of which is set out at the end of this document; "Embedded Value" The embedded value of a life insurance business is the sum of its shareholder net assets (including any surplus held in the long term business fund which is attributable to shareholders) and the net present value of its in-force business. The latter is calculated by projecting the after tax surpluses distributable to shareholders expected in respect of the in-force business and discounting them back to the present time at a risk rate of return; "FSA" The Financial Services Authority; "GB Agreement" The conditional agreement between, inter alia, Charles Taylor Consulting and Gerard Barron for the purchase by Charles Taylor Consulting of 376 shares of LCL Acquisitions; "Group" The Charles Taylor Consulting Group; "IFRS" International Financial Reporting Standards; "LCL Acquisitions" LCL Acquisitions Limited together with, where the context so requires, its subsidiary undertakings; "LCL" LCL Group Limited and LCL Acquisitions Limited and their respective subsidiary undertakings; "LCL Life" LCL International Life Assurance Company Limited (formerly called Aberdeen International (IoM) Life Assurance Limited), a wholly owned subsidiary of Metrowise; "LCL Nominees" LCL International Nominees Limited (formerly called Aberdeen International Nominees Limited), a wholly owned subsidiary of Metrowise; "LCL Services" LCL Group Limited together with, where the context so requires, its subsidiary undertakings; "London Stock Exchange" London Stock Exchange plc; "Lloyd's" The Society incorporated by Lloyd's Act 1871 by the name of Lloyd's; "Management" The Charles Taylor Consulting division providing management and investment management services to mutuals and captive insurance companies as well as risk management advice; "Metrowise" Metrowise Limited, a wholly owned subsidiary of LCL Acquisitions; "Mutuals" Comprises mutual insurance associations, mutual underwriting agencies and group self insurance schemes; "Official List" The list maintained by the UKLA pursuant to Part VI of the Act; "Sale and Purchase Agreement" The conditional agreement between Charles Taylor Consulting and the Sellers dated 9 October 2005 for the sale and purchase of LCL Acquisitions and LCL Services; "Sellers" Philip Holden and Andrew Brannon; "Services" The Charles Taylor Consulting division providing a wide range of claims handling and management services including loss adjusting, consultancy and technical support principally to insurers;"Shareholders" Holders of Shares; "Shares" Ordinary shares of 1 pence each in the share capital of Charles Taylor Consulting; "UK" or "United Kingdom" The United Kingdom of Great Britain and Northern Ireland; "UK Listing Authority" The Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of the Act; Dresdner Kleinwort Wasserstein Limited, which is authorised and regulated by theFinancial Services Authority, is acting for Charles Taylor Consulting plc andfor no-one else in connection with the Acquisition and will not be responsibleto anyone other than Charles Taylor Consulting plc for providing the protectionsafforded to customers of Dresdner Kleinwort Wasserstein Limited or for providingadvice in connection with the Acquisition or any matters described herein. Altium Capital Limited, which is authorised and regulated by the FinancialServices Authority, is acting for Charles Taylor Consulting plc and for no-oneelse in connection with the Acquisition and will not be responsible to anyoneother than Charles Taylor Consulting plc for providing the protections affordedto customers of Altium Capital Limited or for providing advice in connectionwith the Acquisition or any matters described herein. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Charles Taylor