30 Jun 2008 13:59
IFG Group plc
Acquisition
IFG Group plc ("IFG") is pleased to announce that its subsidiary IFG Trust (Cyprus) Limited ("IFG Cyprus") has acquired the entire issued share capital of Excel-Serve Management Limited ("Excel-Serve Management"), a company based in Cyprus with offices in Nicosia and Limassol.
Excel-Serve Management, commenced trading in 2004, when it acquired the corporate clients of Deloitte & Touche in Nicosia. The Company is being acquired from its current owner Vassos Hadjivassiliou. Prior to the purchase of the business Vassos Hadjivassiliou was a partner at Deloitte & Touché. Since the establishment of Excel-Serve Management Deloitte & Touché has been an important referral source of new client work. It is envisaged that Deloitte & Touche will continue to be an important referral source for IFG in Cyprus.
The initial consideration is €10,721,547 and was paid in cash on Completion. Initial deferred consideration equal to fifty per cent of the net assets being acquired on Completion, will be paid upon determination of the net assets, which is expected within 90 days. Deferred consideration of €10,721,547 has been placed in Escrow, and will be releasable in equal sums after 12 and 24 months and may, in certain circumstances, be subject to reclaim. These circumstances include, inter alia, failure to achieve certain agreed turnover thresholds for the two years post Completion and any client or warranty claims arising. A further sum representing fifty per cent of net assets acquired will also be placed in Escrow on similar terms.
The aggregate maximum consideration payable is €25,000,000.
Excel-Serve Management is a specialist corporate services provider offering specialist trust and corporate structures, and company administration services to a wide range of personal and corporate clients worldwide. Excel-Serve Management employs 42 people and manages approximately 800 legal entities with a broad and diverse client base. Client structures cover, inter alia, wealth management, asset protection and succession planning, such structures generally holding assets consisting of property, investment portfolios and cash. Services provided include, inter alia, corporate trusteeship, provision of nominee shareholders, registered offices, directors, secretary, together with the full administration of trusts and companies. Income is principally generated from annual administration fees charged for maintaining and operating the underlying companies and trusts, together with time based activity fees on such entities.
The business of Excel-Serve Management will be integrated into IFG Cyprus's activities and will operate under IFG's International Trustee and Corporate Services Division. The acquisition will enhance IFG's offering to its clients in Cyprus.
In the year ended 31 December 2007, the last date to which audited accounts were prepared, Excel-Serve Management had turnover of Cyp£3,539,762 - €6,048,042, profit on ordinary activities before tax of Cyp£2,180,517 - €3,727,343, and at 31 December 2007 gross assets of Cyp£2,968,254 - €5,071,562. Net assets being acquired are estimated at €3.5 million.
The Acquisition Agreement contains normal warranties and indemnities in favour of IFG Cyprus.
This acquisition continues IFG's strategy of acquiring similar businesses across many jurisdictions and consolidates IFG's position as one of the leading independent onshore and offshore corporate service providers.
Commenting on the acquisition, Mark Bourke, Group CEO, said
"This acquisition is exactly in line with our strategy and highly significant for a number of reasons. It fulfils our stated ambition of building our Cyprus base. With it we continue to build the assets under our control. A further enhancement is, of course, an ongoing referral relationship with Deloitte, the global consultancy firm. At €25 million it is our largest acquisition to date. We are achieving excellent value and considerable earnings enhancement".