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Xafinity acquiring Punter Southall businesses
Posted on Thursday, 07 December 2017 14:53
British firm Xafinity is buying domestic rival Punter Southall Group’s actuarial consulting, pensions administration and investment consulting businesses for about GBP 153.00 million.
Funded through a GBP 70.00 million capital increase and GBP 80.00 million drawn down from new debt facilities, the deal is expected to close on 11th January 2018.
Along with an additional earn-out payment of 6,134,969 shares, the consideration comprises GBP 92.52 million in cash and 25,766,871 shares in the acquiror, establishing Punter Southall as its largest single stakeholder.
Xafinity will also transfer its HR trustees division to Punter Southall as part of the transaction, which is anticipated to increase earnings in the financial year ending 31st March 2017.
Divesting the professional trustee services provider will generate a further GBP 8.48 million.
The unit reported revenue of GBP 2.55 million for 2017, accounting for just 4.9 per cent of the buyer’s total sales in the twelve months (GBP 52.04 million).
Pensions actuarial consultancy and administrative services holding company Xafinity has more than 400 employees and completed its GBP 180.00 million initial public offering on the London Stock Exchange in February 2017.
For 2017, it recorded adjusted earnings before interest, taxes, depreciation and amortisation (EBIDTA) of GBP 17.46 million (2016: GBP 16.70 million).
According to managing directors Paul Cuff and Ben Bramhall, the purchase “will create the largest ‘pure-play’ pensions consultancy firm in the UK market,” and “marks another significant step in our strategy towards becoming the pre-eminent mid-tier pensions consultancy firm in the UK”.
The divisions being bought provide actuarial advice and investment strategy, risk management and investment governance consultancy services to UK occupational pension scheme sponsors.
Together, the target group reported revenue of GBP 51.00 million and adjusted EBITDA of about GBP 11.00 million for the year ended 31st December 2016.
John Batting, chief executive of Punter Southall's actuarial consulting business, stated that the sale “will ultimately provide increased scale and expertise, [and] an enhanced range and quality of service”.
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