Acquisition
Focus Solutions Group PLC
30 April 2002
30 April 2002
Focus Solutions Group plc acquires North American partner, MPO
Focus Solutions Group plc, ("Focus", "the Company"), a specialist in sales
automation solutions for the financial services industry, today announces the
acquisition of its North American partner, MPO Group Inc, ("MPO"), a US based
e-business solutions company. Like Focus, MPO specialises in delivering
solutions that automate the sales process for insurance companies, helping to
capture and underwrite policies. MPO's solutions are based on Focus's XML based
toolkit, goal:technology.
The initial consideration is £726,502 ($1,053,000) of which £451,777 ($653,000)
is payable in cash and the remaining £274,725 ($400,000) by the allocation of
549,449 ordinary shares in the Company, which are subject to a two year lock-in.
In addition, deferred consideration of up to £3.5million, is payable in ordinary
shares following the announcement of results for years ending 31st March 2003,
2004, 2005, on the achievement of certain performance related targets for those
financial periods. Focus has the option to pay up to 50% of the deferred
consideration in cash.
Focus believes there are significant opportunities open to the Company in North
America. By acquiring MPO at this early stage in its development, the Directors
believe that MPO's growth will generate substantial value for Focus
shareholders.
The business is being acquired from the MPO founders who have been contracted to
stay with the business for a minimum of 3 years after the acquisition. MPO
reported losses of $713,000, for the period 28th September 2000 to 28th February
2002 and net labilities of $60,000 and borrowings of $150,000 at 28th February
2002. Borrowings and losses are expected to increase by no more than $50,000 and
$100,000 respectively by completion.
It is expected that the acquisition will be earnings neutral in the year ending
March 2003 and earnings enhancing from the year ending March 2004, before the
amortisation of goodwill.
John Streets, Chief Executive of Focus, said:
"This acquisition will enable us to participate fully in the development of this
major opportunity in the North American life insurance market. It gives access
to the experience and expertise of our US partners, who have extended and
enhanced the benefits our technology can deliver. Taking this step at an early
stage in the product lifecycle will significantly increase our earnings
potential from its future development."
Tom McCahill, Chief Executive of MPO, added:
" We have already benefited from our work with the Focus innovation teams. Now
solutions based on goal:technology can be deployed from a highly motivated,
combined force. This is just the first step in jointly applying our in-depth
market knowledge to leading edge technology. I am highly enthusiastic about our
combined ability to deliver value."
For further information, please contact:
Focus Solutions Group plc 01926 468 300
John Streets
Claire Forrest
Citigate Dewe Rogerson 020 7638 9571
Chris Barrie
Sara Batchelor
Notes to editors
MPO was founded in 2000, and is managed by 3 entrepreneurs with extensive
experience of the North American life insurance industry. In May 2001, MPO
signed a partnership with Focus to develop and market solutions for the North
American life industry using Focus's core technology.
MPO's first solution, eAppCapture, was launched in November 2001. The processing
of new business applications for insurance in North America is still largely
paper- based and each state has differing legislative requirements. eAppCapture
enables North American insurance carriers to capture the complex data required
to process and complete transactions electronically, utilising the industry
standards set by ACORD, the international standards body.
In April 2002 , MPO formed a strategic alliance with Milliman USA, a leading
actuarial practise, with 1750 staff based in the US and the Pacific Rim. MPO has
integrated eAppCapture with FAST, Milliman's policy administration system,
automating the new business sales process for insurance products from
application through to administration, including electronic policy capture,
underwriting, issue and fulfilment.
In addition, MPO has signed a strategic alliance partnership with e-Nable, the
portal for MIB Group, Inc. MIB is an association owned by the leading North
American life carriers which provides a fraud prevention information service for
the North American life insurance industry. MPO has integrated eAppCapture with
e-Nable's internet- based interface to MIB, automating the capture and
validation of the medical and non-medical underwriting data required to improve
risk assessment.
Previously, the MPO founders had been major shareholders in the ECTA
Corporation, a company that developed and marketed an insurance quotation and
tax calculation system . Originally founded by Tom McCahill, the CEO of MPO,
ECTA's customers included 40 of the largest insurance carriers in the US prior
to its sale in 1998.
This information is provided by RNS
The company news service from the London Stock Exchange