Charles Taylor Regulatory News (CTR)

Date: 10 August 2017

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

Embargoed until: 0700hrs

Charles Taylor plc

Acquisition of UK high net worth property, fine art and antiques loss adjuster, Criterion Adjusters

Charles Taylor plc announces today that its subsidiary, Charles Taylor Adjusting Limited ("CTA"), has acquired Criterion Adjusters Limited, Criterion Surveyors Limited and Criterion Claims Management Limited (together "Criterion") a group of specialist loss adjusting, surveying and claims management businesses, for a maximum consideration of £13.1 million. Criterion is focused on the UK high net worth (HNW) property, fine art and antiques insurance sectors.

The benefits of the acquisition are as follows:

· Extends Charles Taylor's capabilities into the high net worth adjusting market

· Provides stable, repeatable revenues with lower working capital requirements

· Offers growth and business referral opportunities for Criterion and Charles Taylor

· Enables Criterion to benefit from Charles Taylor's support and global network

Charles Taylor paid £5.3 million in cash on completion to acquire 100% of the equity of the three Criterion businesses. A further payment of £1.0 million has been made to the shareholders to reflect the net cash position of the company and to enable them to settle directors' loans owing to Criterion. Deferred consideration of up to £7.8 million will be paid, based on business performance over the three years following completion, of which 50% will be paid annually over the three years, with the remaining 50% held back and released on the fifth anniversary of completion.

The initial consideration has been funded by a £5 million increase in facilities with Royal Bank of Scotland and HSBC. The combined gross assets of the three Criterion businesses were £2.8 million, as at 31 March 2017, based on the unaudited statutory accounts. Criterion achieved aggregated revenue of £4.3 million and profit before tax of £1.8 million in the year to 31 March 2017. Criterion will be consolidated for the remainder of 2017 into Charles Taylor's accounts for the year ending 31 December 2017 and following transaction and integration related costs, is not expected to make a material contribution to earnings for that period.

The acquisition is expected to contribute to revenue, profits and earnings in the year ending 31 December 2018 and in subsequent years.

Background to the acquisition

The transaction marks an important step forward in delivering CTA's business model and strategy. CTA is diversifying its business into closely related profitable and stable property and casualty (P&C) loss adjusting sectors, such as the HNW market, while retaining its market leading position in the aviation, energy and marine sectors. The strategy is designed to increase regular, repeatable income streams for CTA, while reducing the working capital requirements over time.

Criterion handles a significant share of the UK's HNW property, fine art and antique-related claims and is the preferred adjuster to many leading specialist HNW insurers. It also provides surveying and claims management (TPA) services to its clients. The HNW sector and its insurers are demanding in terms of both technical knowledge and service standards; this makes Criterion a good fit with CTA, which focuses on higher value, technical work, where expertise and service are valued.

Criterion offers growth opportunities for CTA. It brings several new clients and further embeds CTA with existing clients. Criterion also has the potential to grow by providing surveying, claims management (TPA) and additional HNW adjusting services to existing and new clients and by meeting the demand from clients for offerings with similar service levels on non-HNW claims. Criterion will benefit from Charles Taylor's brand, support functions and international network. CTA expects to benefit from business referrals from Criterion to its other adjusting teams globally and to the wider Group's other businesses such as Charles Taylor TPA and CEGA.

Criterion will continue to trade under its existing name. The business will be led by its current management and its clients will continue to be served by their existing teams. Criterion's Managing Director, Chris Monks, and Operations Director, James Long, will continue in their existing, respective roles.

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

"I am excited that Criterion has become part of the Charles Taylor Group, bringing new HNW adjusting and surveying capabilities and adding to our growing TPA businesses. We are focused on building a larger, more capable, more profitable professional services business. This acquisition marks another important step forward in our strategy to grow by developing new professional service business lines, which are closely-related to our core business, both organically and through carefully targeted acquisitions and investments."

Chris Monks, Chief Executive Officer, Criterion, said:

"CTA has a tremendous reputation for delivering specialist, highly technical loss adjusting services which mirror our service and expertise-driven approach. The strength of CTA's brand, its global network and high quality technology and support services will give us the structure, support and autonomy to grow our business in HNW loss adjusting and adjacent markets."

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

"I am delighted to welcome our new colleagues to Charles Taylor Adjusting. The acquisition of Criterion is part of our strategy to diversify our loss adjusting business into closely related specialist P&C markets. HNW loss adjusting provides steady revenues which will help to balance the less predictable income streams from our other business lines. The nature of the work also means that Criterion's working capital requirements are lower than is normal in our existing aviation, energy and marine markets.

"This complements our recent moves to build our specialist P&C loss adjusting capabilities. We established in late 2016 a UK construction and engineering capability which is developing well, are expanding our UK property and professional indemnity teams and growing our global cyber-liability adjusting capabilities. We are also building our P&C team across the USA and extending our reach across Latin America."

This announcement contains inside information within the meaning of article 7 of the EU Market Abuse Regulation (MAR).

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Notes to editors

Charles Taylor plc is a leading provider of professional services to clients across the global insurance market. The Group has been providing services since 1884 and today employs over 1,900 staff in 71 offices spread across 28 countries in the UK, the Americas, Asia Pacific, Europe, the Middle East and Africa.

The Group offers services, principally on a fee-based model and operates through three businesses - Management, Adjusting and Insurance Support Services. Charles Taylor also owns insurers, creating value through select acquisitions and operational efficiency.

Further information is available at www.ctplc.com 

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.