Helphire Group PLC Acquisition of the New Law group of companies (0726B)
February 27 2014 - 2:02AM
UK Regulatory
TIDMHHR
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
END
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