The Innovation Group plc Acquisition of Claims Services Australia Pty Ltd
Acquisition creates Australia's leading specialist outsourced claims management company
Also provides Innovation Group with a platform to target the Australian property claims market
The Innovation Group plc (LSE: TIG.L), a global provider of business process outsourcing and software solutions to the insurance, fleet, automotive and property industries, is pleased to announce the acquisition of Claims Services Australia Pty Ltd ("CSA") for a cash consideration of A$20.0m (approx. £13.1m) from Calliden Group Limited (ASX: CIX) and two individual shareholders who are both directors of the company. Following the acquisition one individual will remain full time with the business and the other will act in an advisory role to the Group's entire Australian operation.
Based in Sydney and Melbourne and employing over 110 people, CSA provides outsourced motor and property claims management services for Australian insurers including Calliden. Established in 2002, CSA handles approximately 50,000 claims per annum. Revenues and pre-tax profit for the year ended 30 June 2011 were A$20.7m (approx. £13.2m) and A$3.2m (approx. £2.0m) respectively. Gross assets at 30 June 2011 were A$5.9m (approx. £3.9m). The acquisition is expected to be earnings accretive in the first full year of ownership.
The acquisition of CSA establishes Innovation Group as the leading specialist outsourced claims management company in Australia. The combined operation of Innovation Group and CSA will handle over 142,000 claims incidents per annum on behalf of insurers and motor fleets. The acquisition of CSA also provides an entry for the Group into the Australian property claims market. The combined business will provide Australian clients with the benefits of dealing with a larger partner with a broader offering. The Group expects to achieve some cost synergies from combining IT systems but believes that the main benefits arising from the acquisition will be through revenue and profit growth.
Andy Roberts, CEO, Innovation Group said:
"CSA is an excellent strategic acquisition for the Group, providing us with both scale and reach into the rapidly growing Australian insurance market whilst also helping to achieve our goal to establish the Group as a leader in property claims handling in all of our regions."