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Acquisition of European Escrow provider for up to €10.5m
22 Feb 2009
Acquisition of European Escrow provider for up to €10.5m substantially increases international presence
NCC
Group plc (LSE: NCC, “NCC Group” or “the Group”), the international,
independent provider of Escrow Solutions, Assurance Testing and
Consultancy, has acquired Escrow Europe Holdings B.V. (“Escrow
Europe”), a pan-European escrow solutions company, for a maximum
consideration of up to €10.5m in cash.
This earnings enhancing
acquisition will increase the Group’s share of the European escrow
market and substantially develops its international presence.
The
Group also reported its interims results for the six months to 30
November 2007. Overall Group revenue grew by 42% to £16.4m (£11.5m in
2006) and adjusted operating profits by 41% to £4.7m (£3.3m in 2006).
Adjusted fully diluted earnings per share improved 44% to 9.8p (6.8p in
2006) and the Board has approved the payment of an interim dividend of
2.25p, up by 50%.
Escrow Europe provides independent escrow
solutions and escrow verification testing services to approximately
10,000 clients, predominately located in Europe, through 1,000 escrow
agreements.
The initial consideration on completion is €7.5m,
with a further performance related payment of up to €3.0m. The latter
is expected to be paid in two parts at the end of March and June 2008.
For the year ended 31 December 2007, Escrow Europe’s accounts
are expected to show, before application of NCC Group accounting
policies including deferred income, revenue of over €2.3m, earnings
before interest and tax of €0.8m, including in the region of €1.0m of
annual recurring revenues and net assets of not less than €623,000.
On
31 December 2007, Escrow Europe, with NCC Group’s approval, acquired
the escrow contracts of Getronics PinkRoccade, a Netherlands IT
services provider, providing further annual recurring revenues of
approximately €300,000.
NCCGroup expects that the business should
contribute over €1.0m of profits on revenues of €2.5m in its first 12
months of NCC Group ownership.
Escrow Europe, which was
established in 1989, is based in Amsterdam, Netherlands, with a
subsidiary in Munich, Germany, and franchised sales operations in
Switzerland, Belgium, Sweden, South Africa and Israel. It currently
employs 10 people and has a client base across all sectors of the
market including Delta Lloyd Group, a major financial services provider
in the Netherlands and Logica CMG.
The operation will be managed
within NCC Group’s Escrow Solutions division. It will provide
increased potential for developing existing European accounts and offer
clients an improved account management service in their native
languages. The policy of maintaining a neutral stance favouring
neither licensees nor suppliers and providing mandatory testing of
escrow deposits complements the Group’s independent status and position
as a ‘trusted advisor’ to its clients. The company will trade as
“Escrow Europe, an NCC Group Company.”
The Escrow Europe
operational management team is staying with the business. The Group
expects to benefit from their knowledge and experience of the European
escrow market.
Rob Cotton, NCC Group Chief Executive, said:
"This
exciting earnings enhancing acquisition is an important step in
strengthening our international position as the world's largest escrow
provider and increases both the number of businesses and software
applications protected by one of our escrow solutions.
"Research
shows that, whilst 97% of organisations depend on business-critical
software applications, only 18% protect all of these with escrow
solutions. NCC Group is well placed to inform and educate clients on
the risks and increase their level of IT assurance by protecting more
applications with comprehensive escrow solutions."
Enquiries
NCC Group (www.nccgroup.com)
Rob Cotton, Chief Executive
Paul Edwards, Group Finance Director
Today: 020 7457 2020
Thereafter: 0161 209 5432/5200
College Hill
Adrian Duffield/Rozi Morris
020 7457 2815/2803
Category: Latest News
