Xps Pensions Regulatory News (XPS)

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

XPS Pensions Group plc

("XPS" or the "Group")

Proposed acquisition of RL Corporate Pension Services Limited

XPS Pensions Group plc, the pensions actuarial, consulting and administration business, is pleased to announce that it has agreed to acquire the entire issued share capital of RL Corporate Pension Services Limited ("RLCPS") from The Royal London Mutual Insurance Society Limited ("Royal London") (the "Acquisition") for a cash consideration of £4.8 million payable in full on completion, subject to the satisfaction of certain conditions, expected in May 2019.

Details of the Acquisition

RLCPS provides pensions actuarial, consulting and administration services to 150 smaller defined benefit (DB) pension schemes, covering 8,000 members.

The total business being acquired includes contracts already in the name of RLCPS, contracts to be fulfilled under an outsourcing agreement to be entered into between RLCPS and Royal London on completion and 46 members of staff required to fulfil these contracts. The pro-forma results of the combined business as at 31 December 2018 showed gross assets of £0.7m (on a cash free basis) with revenues of £3.9m and, after allowing for staff costs and other costs in respect of essential support functions required to run the business such as finance, human resources, IT and professional indemnity insurance an EBITDA of £0.8m for the 12 months ended 31 December 2018.

As at 31 December 2017, per the filed statutory financial statements of RLCPS, its gross assets were £4.8m (including cash of £4.4m) with revenues of £2.2m and pre-tax profit for the 12-month period ended 31 December 2017 of £1.2m. The unaudited financial information of RLCPS as at 31 December 2018 showed gross assets of £0.9m (including cash of £0.6m) with revenues of £2.3m, and pre-tax profits for the 12-month period ended 31 December 2018 of £1.3m. Note that the 2017 statutory financial statement metrics included for the purpose of LR 10 do not reflect all of the revenues and costs relevant to the business being acquired, as reflected in the preceding paragraph.

The Acquisition constitutes a Class 2 transaction for the purposes of the UK Financial Conduct Authority's Listing Rules. There are no details that need to be disclosed pursuant to Listing Rule 10.4.1(j).

Rationale for the Acquisition

The Acquisition will strengthen XPS's presence in the market for the provision of full services to smaller DB pension schemes and will materially enhance XPS's presence in the Scottish market. It is in line with XPS's continued focus to become the pre-eminent pensions consultancy in the UK, and strengthens XPS's capability in delivering a tailored service suitable for the whole spectrum of DB schemes, from small to very large. RLCPS's 46 staff members are expected to transfer to XPS's Edinburgh office in the months following the closing of the Acquisition.

Paul Cuff, co-CEO of XPS Pensions Group, said about the Acquisition:

"This acquisition is consistent with our strategic focus on becoming the pre-eminent pensions consultancy in the UK and improves our capability and offering to smaller pension schemes. We see this as particularly important, given the increasing need for smaller pension schemes to have access to high quality advice and technology enabled solutions in a cost-effective way. We welcome our new clients and our new colleagues to our business."

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Notes to Editors

XPS Pensions Group plc is a UK specialist in pensions actuarial, consulting and administration, providing a wide range of advisory and compliance services to over 1,200 pension scheme clients. XPS Pensions Group combines expertise, insight and technology to address the needs of both pension trustees and sponsoring companies. The Group has over 1,000 employees, of which approximately 90 per cent are client facing, with 15 offices providing the Group with access to staff, expertise and clients in geographic locations across the UK.