| Wed 7 Mar 2001, 0:00 | | Acquisition Of Alfred Blackmore Group Limited |
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PRESS RELEASE
7 March 2001
ALEXANDER FORBES UK PLC
ACQUISITION OF ALFRED BLACKMORE GROUP LIMITED
Introduction
Alexander Forbes UK PLC ("Alexander Forbes UK") is pleased to announce that it
has completed the acquisition of Alfred Blackmore Group Limited ("Alfred
Blackmore"), a leading UK insurance intermediary that specialises in providing
professional indemnity insurance. The maximum consideration payable to the
shareholders of Alfred Blackmore in respect of the acquisition amounts to
GBP25.3 million. Alfred Blackmore's Group Chairman and Chief Executive, John
Northridge, will join the Board of Alexander Forbes UK PLC.
The acquisition marks a further significant step in Alexander Forbes UK's
international expansion and is consistent with Alexander Forbes UK's stated
strategy of acquiring complementary financial services and risk services
businesses outside of its domestic South African markets and increasing the
proportion of the group's non-South African revenue. Together, the combined
Alfred Blackmore and Alexander Forbes businesses will create a market leading
professional indemnity insurance provider, as well as strengthening their
financial services and other niche insurance businesses.
John Percy-Davis, Chairman and Chief Executive of Alexander Forbes UK,
commented:
"This acquisition represents a significant step in our strategy of acquiring
high quality businesses and expanding our client base. In addition we are
delighted that John Northridge has agreed to join our Board - further
strengthening our team"
John Northridge Chairman and Chief Executive of Alfred Blackmore, said:
"The enlarged grouping will combine two of the leading Professional Indemnity
specialist businesses in the UK. We believe that this new grouping will
continue to provide added-value benefits to our respective clients. I am
particularly pleased for our staff who are joining an expanding group with all
the opportunities that brings."
Overview of Alfred Blackmore
Alfred Blackmore is a privately owned company whose shareholders comprise
Alfred Blackmore's senior management and certain of its employees.
Alfred Blackmore is a leading firm in the insurance sector and is particularly
well known as a Professional Indemnity (PI) intermediary, specialising in
construction PI, insurance brokers PI and affinity schemes. In addition Alfred
Blackmore has developed expertise in the Contractors, Reinsurance and
Bloodstock markets.
Alfred Blackmore also offers:
* Independent advice on retirement planning, life insurance, investments and
trusts and is regulated by the Personal Investment Authority (PIA).
* Healthcare benefit programmes for UK Corporates.
The business is headquartered in London and also operates four regional offices
located in Bristol, Edinburgh, Newcastle and Spalding, employing a total of
approximately 200 people.
For the year ended 31 March 2000, Alfred Blackmore generated revenue of GBP14.2
million and reported a profit after tax of GBP2.2 million. Net assets as at 31
March 2000 amounted to GBP6.5 million.
Summary of the Transaction
The initial consideration paid by Alexander Forbes UK to Alfred Blackmore's
shareholders amounts to GBP25 million. This assumes that the net assets of
Alfred Blackmore as at 31 March 2001 will be in excess of GBP8.1 million and
that the net assets will include excess working capital of not less than GBP5.1
million. A further amount of up to GBP0.25 million will also be payable on a
GBP for GBP basis to the extent that adjusted profit after tax for the year
ending 31 March 2001 exceeds GBP2.7 million.
The majority of the consideration has been paid in loan notes with the balance
paid in cash. The cash consideration payable to Alfred Blackmore's
shareholders is being financed using Alexander Forbes UK's existing cash
resources.
Benefits of the Acquisition
The Board of Alexander Forbes UK continues to seek expansion in the insurance
and financial services market places both by organic growth and selective
acquisition outside South Africa. Alfred Blackmore's market leading position
in Professional Indemnity (PI) insurance makes it an attractive complement to
Alexander Forbes's existing capability and capacity in this expanding niche.
Alfred Blackmore also provides Alexander Forbes UK with entry units in other
profitable niche businesses - Bloodstock and expatriate motor insurance in
which Alexander Forbes UK at present has no presence - and an opportunity to
jointly grow our reinsurance businesses.
Alfred Blackmore's network of regional offices is also complementary to
Alexander Forbes UK's existing geographic presence in the UK and the
transaction will not result in any overlap with any existing offices. A
principal objective post completion will be to concentrate on the growth
opportunities that the two companies have identified.
John Northridge, Group Chairman and Chief Executive of Alfred Blackmore, will
join the Board of Alexander Forbes UK PLC with immediate effect. He will have
responsibility for the strategic development and expansion of the professional
indemnity and specialist niche insurance offerings within the enlarged company.
Lexicon Partners advised Alexander Forbes UK in relation to the acquisition of
Alfred Blackmore.
-ENDS-
For further information please contact:
Alexander Forbes Limited
Graeme Kerrigan, Group Chief Executive
083 3263560
Mike Ilsley, Group Finance Director
083 2500127
Alexander Forbes UK PLC
John Percy-Davis, Chairman & Chief Executive
020 7962 2155
Quintin Heaney, International Development Director
020 7962 2135
Alfred Blackmore
John Northridge, Group Chairman & Chief Executive
020 7283 2525
Vanbrugh Financial Communications
Brendan McNamara, Associate Director
020 7406 1757
OTHER INFORMATION
About Alexander Forbes
Alexander Forbes specialises in providing independent advice to corporate and
individual clients around the world to find solutions to their risk management
and financial planning needs.
Quoted on the Johannesburg Stock Exchange, this fast growing group has over
5,500 employees and operations in 31 countries. Its international operations
are headquartered in London.
Alexander Forbes specialises in: risk management and risk finance, insurance
and re-insurance broking; insurance underwriting and claims management;
multi-manager investments; retirement fund administration, consulting,
actuarial, legal and accounting services; healthcare consulting, financial
planning services and provision of e-commerce products, services and software.
With a market capitalisation of over GBP500 million, Alexander Forbes has
achieved an average annual increase in headline earnings per share of 33% since
listing in 1996.
The group's website is www.alexanderforbes.com
