Charles Taylor plc Acquires operating companies of SC Management, independent third-party manager of The Strike Club
Charles Taylor plc announced today that its subsidiary Charles Taylor Vesta Limited has entered into a conditional agreement to acquire three of the SC Management group's ("SC Management") operating companies from its shareholders, SCE Establishment Liechtenstein and S.C. Management (Bermuda) Ltd (the "Acquisition").
SC Management is the independent third-party manager of The Strike Club group ("The Strike Club"), a group of mutual insurance companies. In connection with the Acquisition, Charles Taylor & Co (Bermuda) will take over the management of The Strike Club on completion of the Acquisition under the terms of a new management contract with The Strike Club (the "Management Contract") for an initial term that will expire on 31 January 2019. The Acquisition and the Management Contract are part of Charles Taylor's strategy to achieve growth by seeking management contracts from mutual insurance companies and associations.
The Strike Club is a marine mutual insurance group that is fully owned by its members. It is the only dedicated mutual insurer covering the running costs of vessels delayed by strikes, shore delays, collisions, groundings and other incidents outside an owner's or charterer's control. In addition to mutual delay cover, it also offers war and loss of earnings cover on a fixed premium basis.
Charles Taylor will acquire S.C. Management (Luxembourg) S.A., SC Services (Monaco) SARL and SC Management SAM through Charles Taylor Vesta Ltd which is 100% owned by Charles Taylor Overseas Limited. The Acquisition and Management Contract are subject to regulatory approvals. The consideration for the Acquisition is US$2.44m in cash, spread equally over 10 years from 1 February 2016, subject to a completion account adjustment. The consideration is to be met from existing cash resources.
The employees of the acquired companies will join the Charles Taylor group on completion, and Bill Milligan, Chief Executive Officer of SC Management, will continue to manage and develop The Strike Club with Charles Taylor.
The gross assets of the acquired companies were US$1.13m and net assets US$0.73m, based on 31 January 2014 accounts. SC Management achieved net profits of US$0.63m in the year to 31 January 2014. The transaction is expected to be modestly earning enhancing in 2015 after transaction costs.
Johan Hagn-Meincke of Clipper Group A/S, President and Chairman of The Strike Club group said: "We aim to build on The Strike Club's existing excellent reputation for delivering high levels of service to its members backed by technical expertise and financial strength, while preserving its mutual ethos and ownership structure. We are confident that, working with Charles Taylor's Management Services team along with Bill Milligan and his team, the Strike Club will go from strength to strength.
"Charles Taylor has a long history and deep expertise of managing mutual insurance companies which stretches back over 130 years. We believe the resources and expertise that Charles Taylor can bring to the management of the Club will be of great value as we expand the Club's capabilities and operations."
David Marock, Group Chief Executive Officer, Charles Taylor said: "We have been actively seeking opportunities to grow our Management Services business. This acquisition provides us with the opportunity to manage another well-regarded mutual insurance company, The Strike Club group, and is an important step in implementing our wider growth strategy.
"The acquisition and associated management contract would not have been possible without the full support of the board of The Strike Club. I would like to thank Johan Hagn-Meincke and the rest of the Club board for selecting Charles Taylor to manage the Strike Club and support its long-term success."