Deals
Quindell Portfolio Plc Acquisition of Metaskil
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 the acquisition of Metaskil Group Limited ("Metaskil"), a specialist provider of solutions to the insurance and telecoms industry.
Metaskil are the developers of a number of technology components, collectively known as Open Square, which includes an advanced function rating engine "Napier", that is currently in operation within the largest telematics insurer in the UK, also a key charter client for Quindell. It offers a variety of services from development,
based on their Open Square component set, to the provision of key project resources. Metaskil has developed its component set with the capability and flexibility to support the underwriting needed for the next generation of personal lines insurance products. Napier is already underpinning the sophisticated underwriting demands of the largest telematics insurer in the UK and was personally selected and championed by a recognised leader in the field of telematics rating.
The flexibility and functionality provided by Napier will allow Quindell to accelerate the development of new products and propositions with its insurance and affiliate clients, helping them to enhance their speed to market; create further differentiation in product offering and improve customer retention.
Metaskil and Quindell already have a number of clients in common. Metaskil's key blue-chip clients include; BT, FSA, Vodafone, Royal Mail, Thames Water, Aon and insurethebox.
Quindell is already working with both the products and developers from Metaskil in a number of pilot projects and has established a significant pipeline of joint opportunities within the top tier personal lines insurers in the UK, with the first proof of concept being commissioned by a top 5 insurer within the past week.
By leveraging its scale Quindell will assist Metaskil to grow its transactional revenues, through Software as a Service ("SaaS") contracts generally based on policy or quotation counts, delivering both greater visibility and sustainability within its technology revenues.
The terms of the acquisition have been satisfied by the issue today of 40,000,000 Quindell shares. In return Metaskil has warranted profit before tax of circa £632,000 for the twelve month period ending 30 September 2013 and cash generated during the period to be no less than £316,000. The shares will be subject to lock in of between 12 and 36 months from the date of issue. Metaskil's run rate revenues for the twelve month period to 30 September 2012, according to management accounts, are circa £3 million, with a significant proportion of revenue recurring in nature.
The acquisition of Metaskil is expected to be slightly Earnings Per Share ("EPS") enhancing in the remaining period to December 2012, however the Board believes it to be significantly EPS enhancing during 2013.
Rob Terry, Chairman and Group Chief Executive of Quindell said: "I am pleased to announce Quindell's acquisition of Metaskil. We are already working with Metaskil in a number of strategic accounts, including the largest telematics insurer in the UK as well as a number of other blue-chip organisations, and I am confident that together we can help Metaskil to grow their transactional revenues significantly. In addition, Metaskil's resourcing capabilities will be a real advantage as we grow our resource base to support the significant demand for our technology and outsourcing solutions. As a result, the Board believes that the acquisition of Metaskil will be significantly earnings enhancing in 2013.
Having just completed what has again been a record quarter in Q3 for revenue, profitability and cash generation, there could not be a better time to be completing this acquisition, with a number of key contract awards due to be made before the end of the year. A fuller trading update of our Q3 results will be issued in a week or so, once the impact of our current momentum has been fully considered."
Application has been made for the 40,000,000 new shares to be admitted to trading on AIM. Admission of the shares is expected to occur on 15 October 2012. Following Admission Quindell will have 2,946,029,187 ordinary shares in issue. The Company has no ordinary shares held in treasury. The total of 2,946,029,187 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.
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