The Innovation Group plc Acquires Driven Solutions Inc
The Innovation Group plc (LSE: TIG.L), a global provider of Business Process Services ("BPS") and software solutions to the insurance, fleet, automotive and property industries is pleased to announce the acquisition of Driven Solutions Inc and its associated companies (together "Driven").
Driven was acquired from AG Roadside LLC and other minority shareholders, for total cash consideration of $7.2m (£4.3m). Of the total consideration, $0.9m (£0.6m) has been paid on completion, with the remainder withheld by the Group to settle a pre-closing deferred liability which has been assumed on acquisition and will be settled over the next 2 to 4 years.
Driven works with approximately 30,000 towing and roadside assistance providers to deliver services to government entities, fleet providers, insurers and credit card membership programs across North America.
The acquisition provides the Group's US BPS business with access to a high quality, effective tow and roadside national network and enhances its offering to both Insurance and Fleet clients in North America. It also has the benefit of broadening Innovation Group's product set and increasing margins from the supply chain in line with our stated strategic aims. Key management are to remain with the business.
For the year ended 31 December 2013, Driven generated a loss before tax of approximately $0.3m (£0.2m), after absorbing significant depreciation and amortisation on acquired intangible assets. Gross assets for the year ended 31 December 2013 were $37.0m (£21.8m). Driven is expected to be margin enhancing and generate EBITDA of approximately $1.6m (£1.0m) for the year ending 31 December 2014. The acquisition has been funded through existing resources.
As discussed in its recent IMS, the Group remains in negotiations regarding a UK Motor BPS acquisition and we anticipate a conclusion by the end of the current financial year.
Commenting on the acquisition, Andy Roberts, Chief Executive Officer of Innovation Group, said:
"We are very pleased with this acquisition, a strategic fit which will broaden our service proposition in North America. It also follows closely our model as we bring an additional, margin enhancing piece of the supply chain into our offering.We look forward to working with the team as we push ahead with our US ambitions."