TIDMPROG
RNS Number : 5562S
Pro Global Insurance Solutions PLC
22 December 2016
Pro Global Insurance Solutions plc
Proposed sale
Introduction
Pro Global Insurance Solutions plc ("the Company") announces
that it has conditionally agreed to sell the shares in its
outsourcing and consulting businesses ("Pro Services") for a total
consideration of GBP8.3 million (the "Sale") to a newly formed
company owned by clients of Acuity Investments LLP ("NewCo").
Following the Sale, the Company's only trading activity will be
through its 30% investment in its associate Asta Capital Ltd.
("Asta") which owns a number of companies including Asta Managing
Agency Limited, the leading third party managing agent at
Lloyd's.
The Sale constitutes a fundamental change of business under Rule
15 of the AIM Rules. Accordingly, the Sale is conditional upon
approval of the Company's shareholders ("Shareholders") in a
general meeting.
Information on Pro Services
Pro Services consists of the outsourcing and consulting
businesses of the Company. It provides Legacy Solutions, Technical
Outsourcing, Operational Consulting and Risk Audit & Compliance
services to the insurance and reinsurance industry.
The recent financial performance of Pro Services was set out in
the Company's Interim Report and Accounts for the half-year ending
30 June 2016 and the Final Accounts for the full-year ending 31
December 2015. The profit attributable to Pro Services for the
full-year ended 31st December 2015 was GBP0.9 million and for the
half-year ended 30th June 2016 was GBP0.2 million.
31 December
2015 Pro Services Asta Company Total
GBP000's GBP000's GBP000's GBP000's
Revenue 26,583 0 0 26,583
Other Income 15 1,744 0 1,759
Total Income 26,598 1,744 0 28,342
Operating
Expenses (25,665) 0 (439) (26,105)
Interest (7) 0 (582) (588)
Profit before
Tax 926 1,744 (1,021) 1,649
Net Tangible
Assets 7,477 7,038 (10,633) 3,882
Goodwill 0 0 5,117 5,117
Total Net
Assets 7,477 7,038 (5,516) 8,999
30 June 2016 Pro Services Asta Company Total
GBP000's GBP000's GBP000's GBP000's
Revenue 13,322 0 0 13,322
Other Income 1 1,109 0 1,110
Total Income 13,323 1,109 0 14,432
Operating
Expenses (13,146) 0 (267) (13,413)
Interest (8) 0 (243) (251)
Profit before
Tax 169 1,109 (510) 768
Net tangible
Assets 7,609 6,446 (9,438) 4,617
Goodwill 0 0 5,117 5,117
Total Net
Assets 7,609 6,446 (4,321) 9,734
The pro forma net asset value of Pro Services, as included in
the consolidated balance sheet at 30 June 2016 was GBP7.6 million.
Goodwill amounting to GBP5.1m included within the consolidated
total net assets of the Company and its subsidiaries relates
entirely to Pro Services and will be written off.
Information on Acuity
Acuity Investments LLP is a private equity firm, founded by two
principals, Adam Barron and Toby Franklin, with a long track record
of investing in the insurance and specialty lending sectors,
including a very successful investment in Canopius at Lloyd's.
Acuity aims to invest in strong businesses, such as Pro Services,
with outstanding management and strong market positions in
well-established areas of financial services. Acuity has a long
term perspective for their investments, to allow companies to grow,
invest and develop over time. Acuity will aim to support Pro
Services with further investment to pursue its strategic
objectives.
The Sale
Under the terms of the Sale, NewCo will pay cash consideration
of GBP8.3 million to acquire 100% of the shares of five wholly
owned subsidiaries of the Company: Pro Insurance Solutions Limited;
Pro IS, Inc.; Stripe Global Services Limited; Chiltington Holdings
Limited; and Chiltington International Holding GmbH and various
subsidiaries of these companies. This amount is subject to
adjustment for movement in working capital based on the balance
sheet as at 30 September 2016. The impact of the Sale on the
Company's balance sheet as at 30 June 2016 is a reduction of GBP4.4
million:
Pro forma impact of the
Sale on Group Balance
Sheet at 30 June 2016 GBPm
Cash price 8.3
Reduction in net assets (7.6)
Goodwill write-off (5.1)
Net impact (4.4)
The purchase price will be funded by clients of Acuity
Investments LLP. The consideration will be satisfied in cash
only.
The Sale is conditional upon Shareholder, Financial Conduct
Authority and other regulatory approvals.
The Company's operations following the Sale
The Company has considered the capital investment requirements
of Pro Services and has decided that focussing on Asta and selling
Pro Services is in the best interests of Shareholders. The Company
will use materially all of the proceeds of the Sale to pay down
outstanding debt.
Asta
Following the Sale, the Company will focus on supporting the
growth of Asta, the leading third party managing agency at Lloyd's.
Asta has a very successful core business which continues to
generate strong profitability and cash flow
Pro Services following the Sale
This transaction will enable Pro Services to have the investment
necessary to continue its "Client First" strategy with the same
single-minded commitment to client service. There are no planned
changes to the Pro Services management and teams. In addition, the
Sale will provide Pro Services with long term financial stability
and eliminates all long-term debt.
Board
It is expected that Artur Niemczewski and Andrew Donnelly, the
Company's Chief Executive and Finance director respectively, will
transfer to NewCo with Pro Services following completion of the
Disposal or shortly thereafter.
Change of Name
The Company expects, following completion of the Sale, to change
its name. The new name has not been selected. The change of name
will require shareholder approval by special resolution.
General Meeting
The completion of the Sale and change of name of the Company is
conditional inter alia upon Shareholder approvals at a general
meeting of the Company. A shareholder circular will be sent to
Shareholders as soon as possible setting out a notice convening a
general meeting and the resolutions to be voted on. It is
anticipated that the Shareholders' meeting will be convened in
February 2017.
Tim Carroll, Chairman of the Company, said. "Asta has performed
very well since its acquisition in 2011, and we look forward to
focussing on growing Asta following the sale of Pro Services. We
wish the employees of Pro Services every success in the future and
are grateful for the tremendous progress they have made over the
last two years to make Pro Services a great standalone
business."
Artur Niemczewski, CEO of the Company, said, "Pro Services'
priority in 2017 is the continued implementation of its "Client
First" strategy with the same single-minded commitment to client
service. Core to this strategy is the provision of market leading
solutions to the industry, and the acquisition by Acuity will
provide Pro Services with the investment necessary to pursue this
objective. The Pro Services team is very excited about the
prospects, long term stability and financial strength this
transaction will bring to us."
Enquiries
Pro Global
FWD PR - Matt Beasley 020 7623 2368
-------------------------------------- --------------
Peel Hunt LLP (nominated adviser and
broker)
James Britton
Rishi Shah 020 7418 8900
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This information is provided by RNS
The company news service from the London Stock Exchange
END
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December 22, 2016 02:00 ET (07:00 GMT)
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