Helphire Group PLC Acquisition of the New Law group of companies (0726B)

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RNS Number : 0726B

Helphire Group PLC

27 February 2014

-- News Release --

Helphire Group plc

27 February 2014

Helphire Group Plc ('Helphire' or 'the Group')

Acquisition of the New Law group of companies

Further to the recent strategic fundraising which the Group completed at the end of December 2013, Helphire announces the acquisition of a leading legal firm.

Introduction

The Group has agreed to acquire the New Law group of companies comprising New Law Legal Limited ("New Law") and its associated companies and partnership interests (the "New Law Group"). The requisite regulatory approvals have been received and the completion process is expected to commence on 28 February 2014.

Information on the New Law Group

The New Law Group is a group of high quality legal services firms operating primarily in the area of road traffic personal injury and providing other consumer-related services including wills and probate. The New Law Group also includes companies involved in the provision of medical reports, costs drafting and advice in relation to employment law.

The Group has worked closely with the New Law team over the past five years in the processing of personal injury claims and has been impressed with the high quality and ethical standards of their work and the integrity of their people.

Unaudited management accounts for the year ended 31 December 2013, prepared on an IFRS basis indicate that, in aggregate, the New Law Group achieved a profit before tax of GBP7.0 million on sales of GBP29.4 million. On the same basis, the aggregated net assets of the New Law Group were approximately GBP14.7m on that date.

During 2013 New Law has entered into a number of ABS arrangements with various insurance and fleet management partners. Helphire intends that this part of the business model will continue to be expanded in conjunction with its own strategy to develop its legal services offering to a larger customer group.

Information on the Acquisition

The consideration for the acquisition of the shares of the New Law Group will be satisfied by the payment at completion of approximately GBP24.5 million in cash and, subject to the achievement of EBITDA targets for the years ended 31 December 2013 and 2014 respectively, by way of the issue of new Helphire ordinary shares ("Helphire Shares") with a value of up to GBP10.5 million. Helphire will also acquire net external working capital debt and shareholder loans of approximately GBP8.2 million, most of which will be settled on or after completion.

The new Helphire Shares will be issued in tranches commencing upon the determination of the EBITDA performance for the year in question, which is expected to be during April 2014 and March 2015 respectively, at a price set by reference to the volume weighted average price of Helphire's shares in the period up to those dates. The first tranche of Helphire Shares and a proportion of the second will be subject to a 12 month lock in followed by a 12 month orderly market arrangement.

In addition to supporting the Group's strategy of widening its range of legal services the acquisition is expected to be earnings enhancing and cash generative which continues to support the Group's cash dividend policy which is to distribute as much of the Group's profits by way of dividend as it can, taking account of prevailing circumstances and other requirements or commitments.

Martin Ward, Chief Executive of Helphire commented:

"After working with New Law for many years, we are delighted to have secured a first class and well-established legal services business together with its management team. This addition to the Helphire group supports our strategic direction to broaden the scope of services we offer in related markets and we look forward to building on our more recent success".

Helen Molyneux, Chief Executive of New Law commented:

"We chose Helphire as a partner because it has established quality credentials, the right approach to business, both strategically and culturally, and a shared vision of the future. The legal services market has undergone enormous change over the last two years which has opened up new opportunities for different businesses to work together in this sector. The combination of Helphire and New Law represents a rewarding and exciting opportunity for the combined businesses."

For further information, contact: 01225 321134

Helphire Group plc

   Martin Ward,                               Chief Executive Officer 
   Stephen Oakley,                           Chief Financial Officer 

Cenkos Securities plc 0207 397 8900

Ian Soanes

Max Hartley

Square1 Consulting 0207 929 5599

David Bick

Mark Longson

Notes to Editors:

Founded in 1992, Helphire is one of the market leaders in providing accident assistance to non-fault motorists involved in road accidents. In partnership with the insurance and motor industries Helphire delivered accident management solutions to over 100,000 motorists in 2013 including legal representation, ensuring that they remain mobile until their own vehicles are repaired or until they are put in a position to obtain a replacement.

This information is provided by RNS

The company news service from the London Stock Exchange

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