Charles Taylor Regulatory News (CTR)

Date: 4 September 2017

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

Embargoed until: 0700hrs

Charles Taylor plc

Acquisition of Metro Risk Management LLC, a US workers' compensation insurance claims administrator

Charles Taylor plc announces today that its subsidiary, Charles Taylor General Agency, Inc. doing business as Charles Taylor TPA ("CTTPA"), has agreed to acquire Metro Risk Management LLC ("MRM") a West Coast USA insurance claims third party administrator ("TPA") for a maximum consideration of US$1.8 million. MRM specialises in managing workers' compensation claims in California.

Charles Taylor will pay US$1.3 million in cash on completion, expected to be 5 September, to acquire 100% of the equity of MRM from Nautilus International Holding Corporation ("Nautilus"). An additional payment of up to US$0.5 million in deferred consideration will be paid on the third anniversary of the transaction, subject to achieving certain performance targets.

The unaudited gross assets of MRM on closing are expected to be US$0.4 million compared to audited gross assets of US$9.8 million1, as at 31 December 2016. MRM achieved revenue of US$3.0 million and profit before tax of US$0.8 million in the year to 31 December 2016. Year to date 2017 performance is behind 2016 due to lower claims volumes. Following completion, MRM will be consolidated into Charles Taylor's accounts for the remainder of the year ending 31 December 2017 and after transaction and integration related costs, is not expected to make a material contribution to earnings for that period. The acquisition is expected to contribute modestly to revenue, profits and earnings in the year ending 31 December 2018 and in subsequent years.

Background to the acquisition

The transaction will enable Charles Taylor to support the growth of its US TPA business, CTTPA. Growing the Group's capabilities in providing outsourced insurance services, such as TPA services, is one of Charles Taylor's four key strategic growth initiatives.

MRM provides workers' compensation claims administration services to clients with employees covered by the California State Act and the US Longshore and Harbor Workers' Compensation Act (Longshore Act). Major clients include insurers, self-insurers, the California Self Insurers' Security Fund and others. MRM's largest client, has recently agreed a three-year contract renewal with MRM for workers' compensation claims administration.

MRM's General Manager and staff of 13 have joined Charles Taylor, adding further to the business' highly experienced workers' compensation specialists and expanding the Group's US capabilities.

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

"I am delighted to welcome our new colleagues from MRM to Charles Taylor. This acquisition reflects our continued commitment to grow our TPA business in the USA and globally, to expand our technical expertise internationally and to strengthen our relationships with high-quality clients."

1The difference between the gross assets at the date of closing and 31 December 2016 is a result of pre completion distribution of retained earnings to Nautilus. 

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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 2,000 staff in 73 offices spread across 29 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.