WILMINGTON PLC

M&A Activity • Jul 20, 2016

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RNS Number : 6764E

Wilmington PLC

20 July 2016

20 July 2016

Wilmington plc

Acquisition of SWAT

-     Extends presence in the accountancy training and technical support market -

-     SWAT will sit within Wilmington's Finance Division -

Wilmington plc ("Wilmington"), the knowledge leader in Risk & Compliance, Finance, Legal, and Insight announces the acquisition by its subsidiary, Mercia Group Limited, of SWAT Group Limited ("SWAT" or "the Business"), a provider of training and technical compliance support to accountancy firms in London and the South West of England.

The consideration will be settled by an initial cash payment of £2.4m and a deferred consideration payment of up to £3.0m payable in September 2018 in cash subject to SWAT achieving challenging profit targets over the two financial years ending 30 June 2018. On acquisition SWAT will have £0.5m in cash.

The consideration will be financed out of the Group's existing £65m multicurrency debt facility and the acquisition is expected to be earnings enhancing in the first full year of ownership. The acquisition of SWAT which generates 50% of its revenue from subscription based products is consistent with Wilmington's strategy of acquiring complimentary businesses with high repeat revenues and strong, cash generative income streams in the Group's key markets. The Business will form part of the Finance Division.

Background to SWAT

The Business was formed as South West Accountancy Tutors in 1976 to provide training and compliance services to practising firms of accountants across Devon and Cornwall. Since then the Business has expanded its client base and now also has offices in Plymouth and London. SWAT will work alongside Wilmington's existing accountancy business, Mercia ("Mercia"). The existing management team of SWAT, led by Adrian Gibbons and David Norris, will remain with the Business and, along with four other individuals, comprise the vendors of SWAT.

Acquisition rationale

The acquisition gives the Group a bigger presence in London, and extends the Group's business into the South West of England where Mercia has been under-represented.  The acquisition also provides Mercia with a clear opportunity to sell its technical and marketing services to SWAT's clients as well as providing access to the accountancy student training market.

Approximately 50% of SWAT's revenue is derived from training and the balance from information technical reviews and consultancy. Underlying revenue over the last three years has shown consistent growth and in the twelve months ended 31st December 2015 SWAT recorded revenue of £4.7m (1), made a profit before interest, amortisation and taxation of £0.6m (1) and had gross tangible assets of £1.9m (1).  

(1) unaudited

Commenting on the acquisition Pedro Ros, Chief Executive of Wilmington plc, said:

"SWAT is a quality business that we have been tracking for a number of years and we are delighted that it is joining Wilmington. SWAT has a very experienced management team who collectively bring a wealth of knowledge and experience in the accountancy training and technical support sectors."

Adrian Gibbons, CEO of SWAT Group Ltd said: 

"This is an exciting opportunity for SWAT to work closely with Mercia to develop and deliver support services that the accounting profession needs to successfully stay ahead in a rapidly changing world. As part of Wilmington, SWAT is looking forward to providing the best support for our clients to keep them at the cutting edge of the accounting profession."

- End-

For further information, please contact:

Wilmington  plc   Pedro Ros, Chief Executive Officer Tony Foye, Chief Financial Officer FTI Consulting Charles Palmer / Emma Appleton	020 7422 6800 020 3727 1000

Notes to Editors

Wilmington plc is the recognised knowledge leader and partner of choice for information, education and networking in Risk & Compliance, Finance and Legal as well as the Insight leader in a number of chosen industries. Capitalised at approximately £220 million, Wilmington floated on the London Stock Exchange in 1995

This information is provided by RNS

The company news service from the London Stock Exchange

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