Charles Taylor PLC Acquisition (9507C)

TIDMCTR

RNS Number : 9507C

Charles Taylor PLC

04 October 2018

Date: 4 October 2018

On behalf of: Charles Taylor plc ("Charles Taylor", the "Group" or the "Company")

Embargoed until: 0700hrs

Charles Taylor plc

Acquisition of Latin American claims programme management and loss adjusting business,

FGR group

Charles Taylor plc announces that its subsidiaries, Charles Taylor Adjusting Limited and Charles Taylor Holdings B.V., have acquired five of the FGR group of companies ("FGR") from their shareholders, for a maximum consideration of US$14.5 million. Don Carlos is a claims programme management and loss adjusting business, headquartered in Chile. It employs around 385 people in 17 locations and has a growing presence across Latin America.

The benefits of the acquisition are as follows:

-- Progresses Charles Taylor Adjusting's strategy of strengthening its capabilities in targeted markets to increase regular, recurring income streams and improve margins

-- Extends Charles Taylor's existing office network, presence and client relationships across Latin America, and positions Charles Taylor as one of the leading international claims programme management and loss adjusting firms in Latin America

-- Adds further technical expertise and high value services to Charles Taylor's claims programme management and loss adjusting offering in Latin America. FGR is often called upon during major catastrophic (CAT) events in the Latin America and surrounding regions, such as earthquakes, windstorms and floods, with the opportunity for substantial incremental revenue and profit

-- Provides FGR with a platform to support and accelerate its growth by winning business from international insurers with exposure to Latin America, entering new markets in Latin America and expanding into new lines of business already offered elsewhere by Charles Taylor

-- Creates additional opportunities for Charles Taylor InsureTech, which already has a strong presence in the region, as a result of its acquisition of insurance technology business, Inworx, in May 2018 and securing a number of major insurance technology contracts

-- Expected to enhance profits and earnings per share in 2019, and to provide strong prospects for profitable growth thereafter.

David Marock, Group Chief Executive Officer, Charles Taylor said:

"This acquisition demonstrates our commitment to growing our capabilities in Latin America following our recent acquisition of insurance technology provider, Inworx. It marks an important step forward in delivering our strategy to achieve market leading positions for each of our businesses and expand into growing economies and markets. I am very pleased to welcome our new colleagues from FGR to Charles Taylor."

Damian Ely, Chief Executive Officer, Charles Taylor Adjusting, said:

"This acquisition greatly strengthens our claims programme management and loss adjusting presence and capabilities in Latin America. Charles Taylor Adjusting will now be one of the leading international loss adjusters in the region. We have the resources, expertise and technical skills to support local and international insurers and reinsurers with their larger and more complex claims and CAT losses."

Ignacio Barriga, Chief Executive Officer, FGR group said:

"Becoming part of the Charles Taylor Group presents a huge opportunity for FGR. It will give us far greater access to insurer clients in the London and international markets. We will benefit from the financial strength, reputation and resources of the Charles Taylor Group and from opportunities for cross-referral and joint working from within the wider Charles Taylor Group."

The businesses acquired under the transaction are:

   --     FGR S.A., FGR Affinity Limitada and FGR Hanna Limitada in Chile 
   --     FGR Peru Ajustadores de Seguros Sociedad Anonima and FGR Affinity Peru SAC in Peru 

Charles Taylor Adjusting Limited and Charles Taylor Holdings B.V. paid US$4.7 million in cash, funded from the Company's existing accordion banking facility, to acquire the businesses. Of this, US$3.5 will pay down FGR's existing bank debt. Forecast deferred consideration of US$5.3 million will be paid, based on the business' performance over the three years following completion. Total consideration is capped at US$14.5 million, excluding free cash and WIP. In addition to the initial consideration US$4.7 million, an initial payment of US$2.1 million was paid to reflect the Work In Progress within the business.

FGR reported revenue of US$18.1 million, Adjusted PBT of US$1.2(1) million and adjusted EBITDA of US$1.5(1) million in the year to 31 December 2017. The gross assets of FGR were US$9.7 million, as at 31 December 2017. Don Carlos will be consolidated for the remainder of 2018 into Charles Taylor's accounts for the year ending 31 December 2018. After transaction and integration related costs, the acquisition is not expected to be earnings enhancing in 2018. FGR is expected to be earnings per share (EPS) enhancing in 2019 and subsequent years.

FGR partners, Ignacio Barriga, CEO, Angelo Hettich, Head of Energy, Mining and Construction Risks, Alberto Levy, Head of Legal and Financial Risks and Pedro Vial, Head Property and Aqua Risks, have joined Charles Taylor Adjusting and will be responsible for driving the growth and development of FGR under Charles Taylor's ownership. Ricardo Sateler, a co-founder of FRG and legal counsel to the business, is expected to take a consultancy role. FGR will be integrated with Charles Taylor Adjusting's other existing Latin American businesses, which are led by Felipe Ramirez, Managing Director and Regional Head, Latin America.

Background to the transaction:

FGR is a claims programme management and loss adjusting group. The loss adjusting business operates in the Property & Casualty market, with particular strength in construction, engineering, liability and catastrophe losses.

FGR is located on the 'Pacific Ring of Fire', which gives it greater exposure to and earnings potential from CAT events in the region. FGR has worked on recent major CAT events in the region, including the 2015 Chilean floods, 2016 Ecuador earthquake and 2017 Puerto Rico hurricanes, the latter in association with Charles Taylor Adjusting.

The claims programme management business provides insurance claim settlement services to insurance companies in the Chilean market. This business handled around 3.1 million claims during 2017.

Charles Taylor already operates successful and growing loss adjusting and technology businesses in several Latin American markets. FGR builds on Charles Taylor's existing network, presence and client relationships across Latin America, and positions Charles Taylor as one of the primary international claims programme management, loss adjusting and insurance technology provider in Latin America.

(1) Adjusted to reflect one off restructuring costs and changes in remuneration under CT ownership

This transaction was mentioned under 'Potential further developments' in Charles Taylor's 3 May 2018 announcement of its acquisition of Inworx. This announcement contains inside information within the meaning of article 7 of the EU Market Abuse Regulation (MAR). It is being made on behalf of the Company by Mike Lord, Group Communications Director of Charles Taylor.

-ends-

 
 For further information: 
 Charles Taylor plc 
 David Marock, Group Chief Executive 
  Officer 
 Mike Lord, Group Communications Director    Via Redleaf PR 
 Redleaf Communications                      [e-mail] 
 Elisabeth Cowell/Ian Silvera                020 7382 4730 
 

Notes to editors

Charles Taylor plc (www.ctplc.com) is a global provider of insurance-related technical services and solutions dedicated to enabling the global insurance market to do its business fundamentally better.

We have been providing insurance-related professional services and technological solutions since 1884. Today, we employ over 2,900 staff in more than 100 locations spread across 30 countries in Europe, the Americas, Asia Pacific, the Middle East and Africa.

We are distinctive in our market in that our professional services and technological solutions support every stage of the insurance lifecycle and every aspect of the insurance operating model. For the Property & Casualty (P&C) insurance market, we handle all major commercial lines, along with the more technical areas of personal lines; we do so similarly for the life and health insurance markets.

The clients we support range from insurers - including corporates, mutuals, captives, MGAs, Lloyd's syndicates and reinsurers - to brokers, distributors and corporate insureds.

Our market-leading breadth of services and solutions, world--class technical expertise, extensive global presence and 100% focus on insurance means we can manage and resolve virtually any insurance-related matter, wherever and whenever it occurs.

Statements made in this announcement that look forward in time or that express management's beliefs, expectations or estimates regarding future occurrences are "forward-looking statements" within the meaning of the United States federal securities laws. These forward-looking statements reflect the Group's current expectations concerning future events and actual results may differ materially from current expectations or historical results.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

ACQMIBATMBIMMBP

(END) Dow Jones Newswires

October 04, 2018 02:00 ET (06:00 GMT)