WTG.L Regulatory News (WTG)

RNS Release embargoed until 7.00 AM 24 May 2012

Quindell Portfolio Plc

("Quindell" or the "Group")

Quindell extends its technology capability

§ Acquisition of IT-Freedom - scales delivery capability in line with significant Group pipeline

§ Extended partnership with SMI Telecoms - now exclusive global distributor and will support the conversion of SMI's considerable pipeline

§ Cash and shares issued at a 114% premium

§ Extension of the technology is a further significant step in Quindell establishing its technology solutions as a undisputed leading player in the global insurance market 

Quindell Portfolio Plc (AIM: QPP.L), the provider of sector leading expertise in software, consultancy and technology enabled outsourcing in its key markets, being Insurance, Telecommunications and their Related Sectors, is pleased to announce that it has extended its technology delivery capability through the acquisition of IT-Freedom Limited ("IT-Freedom") and extended its partnership with SMI Telecoms LLC ("SMI") and is now the sole and exclusive distributor for SMI products on a global basis.

SMI agreement

The new agreement reached with SMI secures exclusive global distribution rights for the SMI products, in consideration for Quindell paying £1.25 million in cash and building its global implementation and service capabilities to support SMI in the conversion of its significant pipeline of licence opportunities, that have the potential to close in 2012 and beyond.

Acquisition of IT-Freedom

Quindell is also acquiring IT-Freedom, an award winning software solutions delivery company, with a demonstrable track record in the insurance sector, in order to scale up its delivery capacity to cope with the significant pipelines already established by the Group. This capacity will be required from the beginning of July when Quindell emerges from the first mover advantage restrictions granted to its insurance technology charter client Ingenie, a digital insurance brand which is supported by two of the UK largest insurers. These restrictions stopped Quindell from selling its Telematics related insurance technology solutions to other insurance companies until July 2012.

IT-Freedom, now 'Quindell Enterprise Technology Solutions' has been acquired by the Group at a valuation of £9,465,640.28p to be satisfied by the initial issue of 49,713,669 Quindell Shares ("New Shares") and £3.5 million in cash paid £0.5 million on completion and then £1 million on the 1 July 2013, 2014 and 2015. The New Shares have been issued at a price of 12 pence per share, representing a premium of 114% on yesterday's closing price. The shares are subject to lock in of between 12 and 36 months from the date of issue. In the year to 30 September 2011, IT-Freedom had sales of £3.0 million and pre-tax profit of approximately £200,000, as well as gross assets of £2.0 million.

Background

IT-Freedom was founded, and is owned in the majority, by Mick Sargeant and Andrew Passfield, following their departure from the Innovation Group in 2002. Mick and Andrew previously headed up the European and Global Charter Client Software and Service delivery operations for the Innovation Group, managing major programmes of work with 9 of the top 10 general insurers. Following this acquisition, Quindell has now assembled its core technology delivery team for the Group going forward.

The acquisition of IT-Freedom is an important component of Quindell's strategy as, following this acquisition Quindell is now a clear market leader in the telematics based insurance space with two of the top four leading telematics based insurance players; being ingenie our charter client and insurethebox. Recent market developments mean that nearly all the largest insurance players in the UK, following pressure on profitability and changes in regulation, are now rapidly looking to introduce schemes for telematics based motor insurance and therefore Quindell is in a strong position to capitalise on this. Our strategy is to leverage both this position in the fast growing telematics segment and our strength in technology enabled outsourcing.

IT-Freedom has developed a robust customer base for its technology solutions, being Insurance Component Environment ("ICE") product suite: ICE Claims, ICE Policy and ICE Track (Insurance Analytics) and in the past two years alone has delivered circa 40 implementations into production, within an average go-live timescale of 14 weeks. Many of IT-Freedom's customers have engaged on a "Software as a Service"(SaaS) basis, generating a significant recurring revenue stream and under the terms of their established maintenance programmes these customers will now have the opportunity to take advantage of Quindell's investment in transformational digital solutions for the insurance marketplace.

The boards of Quindell and IT-Freedom believe that Quindell's established technology platforms, organisational scale and existing business relationships with the top UK insurers, coupled with IT-Freedoms delivery capabilities, will significantly assist in securing both new technology and technology enabled business process outsourcing contracts for the Group.

Rob Terry, Chairman and Chief Executive of Quindell said: "We are delighted to be extending our technology delivery capability with the addition of IT-Freedom's ICE product suite and proven expertise. This acquisition broadly completes our technology platform for the provision of insurance services. With pipelines for the sale of insurance solutions at record levels this acquisition allows us to scale up to meet demand. I am personally looking forward to working with Mick, Andrew and the team again, as we focus once more on bringing transformational technology solutions to the insurance marketplace.

"Both our Board, and that of IT-Freedom believe that Quindell's established technology platforms, organisational scale and existing business relationships with the top UK insurers, coupled with IT-Freedom's delivery capabilities, will significantly assist in securing both new technology and technology enabled business process outsourcing contracts for the Group."

Mick and Andrew, the Founders of IT-Freedom, commented: "Having worked closely with Rob and many of the Quindell Executives in the past we are delighted once again to be part of the team which is focused on bringing disruptive change and delivering significant savings for the insurance industry. The share price premium demonstrates the confidence we have in the value of the combined Group and what it has to offer to the industry.

"At a time of so much change in the industry we are pleased that our team can be part of what promises to be an exciting and revolutionary programme of change."

Application has been made for the 49,713,669 New Shares to be admitted to trading on AIM. Admission of the shares is expected to occur on 31 May 2012. Following Admission Quindell will have 2,683,444,540 ordinary shares in issue. The Company has no ordinary shares held in treasury. The total of 2,683,444,540 ordinary shares may therefore be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FSA's Disclosure and Transparency Rules.

For further information:

Notes to Editors:

About Quindell Portfolio Plc

Quindell Portfolio Plc is a provider of sector leading expertise in Software, Consulting and Technology Enabled Outsourcing in its key markets being Insurance, Telecommunications and their Related Sectors.

Quindell joined the market through Mission Capital Plc, now renamed Quindell Portfolio Plc. The Company was readmitted to the market on 17 May 2011 following the acquisition of Quindell Limited prior to the immediate acquisition of Quindell's technology and outsourcing partners. In December 2011, Mobile Doctors Group Plc was acquired increasing 2012 run-rate revenue to over £50 million. On the 1 April 2012, Ai Claims Solutions Plc became a subsidiary of Quindell, increasing run rate revenue to over £150 million. With the acquisition of Silverbeck Rymer due to be completed on 1 July 2012, subject only to SRA approval, proforma run rate revenues will exceed £200 million and staff levels, including off-shore resources, increase to circa 1,250.

Our Industry Sectors

In today's digital world the line between traditional industry sectors continues to blur, however the focus on tight service management is common to them all. We believe that excellent customer service, tight cost control and integrated supply chain management is not the prerogative of any single industry sector and with our solutions in multiple industry sectors savings of over 20% against industry norms are being delivered to the bottom line.

Our Solutions

The pressures on an organisation can come simultaneously from multiple directions including the need to add customers, increase wallet share, reduce costs and improve customer satisfaction. At Quindell we have the People, the Processes and the Supply Chains, underpinned by our sophisticated Champion and Challenger Business Process Management Technology Platform and Industry Solutions to help our customers tackle these efficiently and effectively.

With a clear understanding that having the best products and services on offer is not always enough and that getting your customers to use or adopt them is key, effective conversion lies at the core of our unique Champion and Challenger tools and techniques. Using these solutions Quindell has helped its customers achieve sales and service conversion rates ranging from 75% to 90%, way above industry norms. But life does not stand still, and complacency can kill any business, so the embedded Champion and Challenger continual improvement focus of our Learning Solutions is at the heart of all we offer. Using our industry insight and expertise, Quindell takes the holistic view of our client's challenges.

For example, when considering the Insurance industry today where 50% of the cost of an auto claim is associated with Personal Injury, including legal services, medical reporting and rehabilitation, it is clear that an organisation will not be able to achieve the levels of savings and customer satisfaction desired without addressing the injury to the driver as well as the repair of the vehicle. This is why at Quindell we have designed our insurance solutions and supply chains to address the full end to end cycle, with the ability and expertise to treat an injured party as well as repairing their vehicle. This makes Quindell a truly unique proposition for the insurance industry today.

Our Customers

QuindellPortfolio's companies have worked with over 2000 brands from Small to Medium Enterprises and Blue-chip organisations around the globe. Today we count a number of the world's top Insurance and Telecommunications blue chip companies within our client base, as well as hundreds of customer centric organisations working in both the distribution and supply of their services.

Our award winning Business Transformational, Software, Consulting and Outsourcing Solutions are recognised as delivering significant savings and additional sales to our customers every year.

For further information, please visit www.quindell.com 

About IT-Freedom

IT-Freedom provides best practice web-based solutions for the general insurance industry. A wealth of knowledge and experience has been combined with excellent technical design to produce the ICE product suite. ICE Claims® helps insurers drive down the cost of claims: ICE Track® provides the comprehensive information to ensure efficient business management and the recent launch of ICE Policy® completes the set of products for the modern insurer. By challenging accepted practices and harnessing technology we can help your business change for the better. 

For further information, please visit www.it-freedom.com

About SMI Telecoms

SMI Telecoms provides OSS solutions to the global communication service provider marketplace. At the core of the product portfolio is OS3, a suite of service management solutions designed specifically for the communications industry. OS3 embraces industry best practices and standards as set out by TM Forum Frameworx and ITIL and is quick to install with low cost maintenance. The OS3 suite is available as On-Premise or SaaS.

For further information, please visitwww.smi-t.com