This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.
24 February 2025
XPS
Pensions Group plc
("XPS" or the "Group")
Acquisition of Polaris Actuaries and Consultants
Limited
A material acceleration of
XPS Group's diversification strategy
XPS Pensions Group plc, is pleased
to announce that it has entered into an agreement to acquire the
entire issued share capital of Polaris Actuaries and Consultants
Limited ("Polaris"), a highly regarded UK insurance consultancy
business with a blue chip client base, (the "Acquisition"). The
Acquisition will materially accelerate the Group's strategy of
becoming a leading player in the fragmented UK Insurance Consulting
market. The Acquisition is expected to complete on 28
February 2025.
Polaris was established in 2015 with
the strategy to provide insurance clients with high quality
actuarial and technical services, supporting them on complex
financial, risk and regulatory projects. Today, Polaris is at the
forefront of its field, providing a range of services from large
scale, multi-disciplined transformation programs to specialist
project support for some of the UK's largest insurance
companies.
Polaris will be integrated into the
current XPS Insurance Consulting team, which is focused on high
impact, strategic advice, consulting on transformational change at
the initiation stage of large scale projects. Polaris
specialises in using a flexible workforce to lead the delivery
stages of such projects, and as such is a highly complementary
business. The combination will create a significant opportunity for
growth as XPS will now be able to offer a full range of services
from a strategic consultancy at the front end through to
on-the-ground implementation. Polaris also offers XPS the
advantage of immediate access to long term, trusted relationships
with established Master Services Agreements with majority of the
UK's leading insurers.
The enlarged XPS Insurance
Consulting team will be well positioned to deliver meaningful and
reoccurring revenue within XPS with a senior team of five highly
experienced partners (including the three Polaris partners), led by
David Honour, with combined insurance industry experience of 100+
years. The end addressable market is large, with UK insurers
collectively spending well over £1bn p.a. on external support in
maintaining and growing their businesses.
Cash consideration of £23.4 million
will be paid on completion (of which £9m is subject to certain
rights of claw-back) and a further contingent cash consideration of
up to £35.0 million will be payable in three years contingent on
achieving certain stretching business performance criteria. The
acquisition is being funded from the Group's existing cash and
available debt facilities. In the year ended 31 December
2024, Polaris generated revenue of £17.7 million (1) at
approximately 25% (1) normalised adjusted EBITDA margin.
Notwithstanding the Group's intended investment in the business in
the near term to drive enhanced growth, the Acquisition is expected
to be immediately earnings accretive.
XPS were advised by Deloitte LLP on
the transaction.
(1)
From unaudited management accounts
Paul Cuff, Co-CEO of XPS Pensions
Group, said:
"We are delighted
to have the Polaris team join us, via this
attractive strategic acquisition for XPS. We have highly
complementary skills and together we can provide the full range of
services that insurers need as they address opportunities and
challenges in their own thriving market. This transaction
provides a direct path to the Group becoming a market-leading
Insurance Consulting provider. It is also brilliant for our
people, as in time it will broaden the range of career paths
available to them as we become a broader financial services
advisory firm.
The strong existing relationships we
have with Polaris are important, with our head of insurance
consulting David Honour having known the partners of Polaris for
many years after working with them in prior roles. We think
this transaction is an excellent fit and unlocks opportunity for
everyone involved."
Roger Houlihan, Partner and Founder
of Polaris, said:
"On behalf of the Polaris partners,
employees and contractors, I am delighted to join the XPS team, a
move that will allow us to build on the success we have achieved
while expanding our capabilities. I am extremely proud of the
business we have built and am excited about the future. We are
looking forward to expanding the scale of our operations as we
continue to work with our clients to provide a truly market-leading
service offering. This is a big opportunity for the Polaris team
and XPS, with the backing and expertise of a larger organisation we
are looking forward to providing a more comprehensive service
offering to our newly combined client base.
Importantly, the core values and
approach that has made Polaris successful will remain unchanged,
our values closely align to XPS's enabling us to continue to
deliver exceptional results for our customers and provide exciting
opportunities for our team."
About Polaris
Polaris Actuaries and Consultants
Limited is a leading and trusted provider of insurance, risk and
regulatory consulting services. Polaris
specialises in actuarial consulting providing high quality
actuarial and technical services to insurance clients in the UK,
and supporting them on complex financial, risk and regulatory and
actuarial change programs.
For further information,
contact:
XPS Pensions
Group
+44 (0)20 3978 8626
Snehal Shah, Chief Financial
Officer
Canaccord Genuity (Joint
Broker)
+44 (0)20 7523 8000
Adam
James
George Grainger
Deutsche Numis (Joint Broker)
+44 (0)20 7260 1000
Stuart Skinner
Kevin Cruickshank
Camarco (Media
Enquiries)
+44 (0)20 3757 4980; xps@camarco.co.uk
Gordon Poole
Rosie Driscoll
Phoebe Pugh
Notes to Editors:
XPS Group is a leading UK consulting
and administration business specialising in the pensions and
insurance sectors. A FTSE 250 company, XPS combines expertise and
insight with advanced technology and analytics to address the needs
of over 1,400 pension schemes and their sponsoring employers on an
ongoing and project basis. We undertake pensions administration for
over one million members and provide advisory services to schemes
and corporate sponsors in respect of schemes of all sizes,
including 83 with assets over £1bn. We also provide wider ranging
support to insurance companies in the life and bulk annuities
sector.
