REG - Frenkel Topping Grp - Acquisition of Cardinal Management Limited

Frenkel ToppingAnnouncement

10/01/2022 07:05

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RNS Number : 8422X  Frenkel Topping Group PLC  10 January 2022

Frenkel Topping Group plc

("Frenkel Topping", the "Company" or the "Group")

Acquisition of Cardinal Management Limited

"A highly strategic acquisition which fits perfectly within, and which will
materially compliment, the overall strategy and platform of the Group and
consolidates Frenkel Topping's market leading position in the Personal Injury
& Clinical Negligence sector"

Frenkel Topping (AIM: FEN), a specialist professional and financial services
firm focused on asset protection for clients, is delighted to announce that it
has acquired the entire issued share capital of Cardinal Management Limited
("Cardinal") (the "Acquisition"). Cardinal works in close partnership with a
number of key NHS Major Trauma Centres ("MTCs") to provide a Major Trauma
Signposting Partnership ("MTSP") support service.

The total maximum possible consideration for the Acquisition is £10.0 million
in cash, of which an initial £5.0m (which is subject to adjustment following
a completion accounts process) will be paid on completion. The additional
consideration of up to £5.0m may become due to the sellers of Cardinal on an
earn-out basis linked to certain challenging financial performance targets
relating to future growth and profitability of Cardinal between completion and
31 December 2025. Further details on the financial terms of the Acquisition
are set out below.

Transaction Rationale

The Acquisition is firmly in line with the Company's strategy to pursue
quality opportunities in, and to drive consolidation of, the pre-settlement
professional services marketplace in the Personal Injury (PI) and Clinical
Negligence (CN) space.

Cardinal fits perfectly alongside the Group's recent acquisitions of Forths
Associates, A&M Bacon, Partners in Costs and Bidwell Henderson and allows
the consolidation of the space further, positioning Frenkel Topping as a
market leader in its sector.

Cardinal is the sole commercial organisation operating in its space and has a
5-year track record of contracts with the NHS with a 100% contract renewal
rate. Cardinal is also in high demand from PI legal providers seeking quality
multi-track cases and provides a clear opportunity to expand the Major Trauma
Signposting Partnership (as further explained below) into additional Major
Trauma Centres within the NHS.

Through its core business, Frenkel Topping Limited, it supports litigators
pre-settlement in achieving maximum damages, by providing expert witness
services, and post-settlement to achieve the best long-term financial outcomes
for clients after injury.

The Acquisition provides a clear and direct link to claimants, and their
professional representatives, at the earliest stage possible after injury or
illness, introducing the portfolio of Frenkel Topping Group services in a
relevant and timely way to its clients in the PI and CN litigation space as
well as claimants themselves. It is also expected that the Acquisition will
drive future growth in the Group's Assets Under Management as successful
claims and cases come to settlement.

At each of the MTSP sites, Cardinal has selected a legal panel  which
comprises law firms who provide the highest quality of care and service to
patients, providing significant opportunity for the Group to further
strengthen its relationships with PI and CN departments within law firms
nationally.

Further detail on Cardinal Management Limited

Cardinal Management Ltd was established in 2015 by Andrew Pemberton (Managing
Director and majority shareholder). It is an independent organisation
providing trauma patients and their families with much needed help and support
whilst in hospital. The core of Cardinal's work is within the NHS, where
Cardinal is integral to helping Major Trauma Centres improve levels of care
and long-term outcomes for patients by facilitating early access to welfare,
legal, rehabilitation and financial support.

Cardinal currently has a presence in 7 NHS Major Trauma Centres, of which
there are 27 across the country, giving significant scope to grow and expand.

The Major Trauma Signposting Partnership is a scheme initially developed by
Cardinal and St George's University Hospitals NHS Foundation Trust.  MTSP
went live in January 2016 with the aim of testing the impact of early advice
and guidance from Citizens Advice (formally the "CAB") and Rehabilitation
Advisers on the quality of care and longer-term outcomes for patients, the NHS
and our wider society, which has been adopted by 7 other MTCs.

The MTSP provides advice on a range of issues including employment, finance,
education, housing, and compensation. A Cardinal-employed Major Trauma Advisor
(MTA) works within the MTC to meet with patients at their bedside to provide
free advice and support to patients and their families.

Cardinal has a strong team of 19 people, 14 directly employed and all led by
Andrew Pemberton, who will remain in place as Managing Director following
completion of the Acquisition.

 

As set out in the Company's strategy, the focus is to ensure the Company has
as many touch points as possible in the PI and CN space. The Acquisition
provides this on the basis that the Company will have an ability to help
clients and patients as soon as they have suffered severe trauma and serious
injury when they arrive at hospitals and can assist them at the initial stages
of assessment with a view to ensuring the best possible outcome, care and
financial compensation. This drives a number of key revenue opportunities for
the Company as the Acquisition is expected to link into the wider buy and
build strategy and the Company's previous acquisitions and existing product
offering and ultimately driving growth in AUM.

 

The Acquisition is expected to be immediately earnings enhancing contributing
to the FY 2022 financial year outturn.

 

Further details of the Acquisition

 

The Company has agreed to acquire Cardinal from Andrew Pemberton and Sarah
Pemberton (the "Sellers") for a total consideration of up to £10.0 million in
cash as follows:

 

·       £5.0m paid in cash on completion of the Acquisition (subject
to a post-completion adjustment following a completion accounts process); and

·       up to £5.0 million paid in cash based on the EBITDA of
Cardinal for the financial years ending 31 December 2023 and 31 December 2025.

The earn-out payments are subject to the continued profitability and growth of
Cardinal along agreed performance criteria.

For the year ended 31(st) March 2021, Cardinal generated revenues of £0.9m,
reported a £0.3m profit before tax and with £1m net assets on the balance
sheet as at 31(st) March 2021.

Trading Update

The Company is pleased to confirm that it will report results for the year
ended 31 December 2021 in line with management's expectations and will provide
a more detailed update in the coming weeks.

Richard Fraser, Chief Executive Officer of Frenkel Topping Group, said:

"The acquisition of Cardinal fits exactly into our strategy of acquiring
high-quality businesses in the personal injury and clinical negligence market
which provide established opportunities for us to extend our reach into the
sector and expand our client base.

 

The timely support provided by Cardinal inside hospitals immediately after
injury is absolutely crucial for injured parties to receive the best possible
outcomes and we are delighted to be working with Andrew to grow that level of
support to more of the Major Trauma Centres across the country.

 

Andrew cares deeply about supporting patients and NHS teams inside trauma
centres and I have been greatly impressed by his approach to developing the
MTSPs. I very much look forward to welcoming Andrew and Cardinal into the
enlarged business and continuing the outstanding work they do.

 

Andrew Pemberton, Managing Director of Cardinal Management Limited, said:

"I am exceptionally proud of the work the MTSP does both in terms of the
patients it helps and the assistance it brings to front line NHS staff.  Over
the last five years we have provided bedside advice and support to more than
5,000 trauma patients and facilitated more than £120m in personal injury
compensation awards. Our existing relationship with the Frenkel Topping
Charitable Foundation demonstrates how the two organisations can, by working
together, ensure the long-term stability of the service and provide a home
from which the service can develop longer term to help even more patients turn
what has been a very bad day, into a better one."

 

Further information Frenkel Topping, Cardinal & the Frenkel Topping
Charitable Foundation

 

In November 2021, the Frenkel Topping Charitable Foundation made a charitable
donation to create a fund for Major Trauma Advisors inside MTCs to spend on
practical and emotional support for patients immediately after traumatic
injury.

 

Funded by Frenkel Topping Plc and Cardinal Management, the charitable fund
gives MTSP advisers access to 'same-day' cash to provide immediate assistance
to the patients most in need.

 

With assistance from NHS and Citizens Advice colleagues, Major Trauma Advisers
at Addenbrooke's Hospital, Cambridge, King's College and St George's in
London, Royal Sussex County Hospital in Brighton, University Hospital,
Coventry, the Manchester Royal Infirmary and Royal Manchester Children's
Hospital, will identify patients who have suffered serious injury and need
urgent help to manage the practical daily challenges that come with the
recovery from a serious injury.

 

For further information:

 Frenkel Topping Group plc                                       www.frenkeltoppinggroup.co.uk (http://www.frenkeltoppinggroup.co.uk/)
 Richard Fraser, Chief Executive Officer                         Tel: 0161 886 8000

 finnCap Ltd (Nominated Advisor & Broker)                        Tel: 020 7220 0500
 Carl Holmes/James Thompson/Milesh Hindocha (Corporate Finance)

 Richard Chambers (ECM)

This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (596/2014/EU) as it forms part of UK domestic law
by virtue of the European Union (withdrawal) act 2018 ("MAR").

About Frenkel Topping Group:

The financial services firm consists of Frenkel Topping Limited, Ascencia
Investment Management, Obiter Wealth Management, Equatas Accountants, Forth
Associates, A & M Bacon Limited and Partners in Costs Limited.

The group of companies specialises in providing financial advice and asset
protection services to clients at times of financial vulnerability, with
particular expertise in the field of personal injury and clinical negligence.

With more than 30 years' experience in the industry, Frenkel Topping has
earned a reputation for commercial astuteness underpinned by a strong moral
obligation to its clients, employees and wider society, with a continued focus
on its Environmental, Social and Governance (ESG) impact.

Through its core business, Frenkel Topping Limited, the firm supports
litigators pre-settlement in achieving maximum damages, by providing expert
witness services, and post-settlement to achieve the best long-term financial
outcomes for clients after injury. It boasts a client retention rate of 99%.

The Group's discretionary fund manager, Ascencia, provides financial
portfolios for clients in unique circumstances. In recent years Ascencia has
diversified its portfolios to include a Sharia-law-compliant portfolio and a
number of ESG portfolios in response to increased interest in socially
responsible investing (SRI).

Obiter provides a generalist wealth management service - including advice on
Savings and Investments; Tax planning; Life Insurance; Critical Illness and
Income protection; Endowment advice and Keyman Insurance, with a particular
specialism in financial advice on pensions and pension sharing orders for the
clients of divorce and family lawyers. Obiter applies the same core principles
of honesty, transparency, responsibility and reliability to individuals,
regardless of background or situation.

In 2019, Frenkel Topping launched its accountancy arm, Equatas, to assist
clients with tax planning and move closer to providing a full end-to-end
service under the Group brand, improving the experience for clients and
maintaining the Group's standards throughout the client journey.

In 2020 Frenkel Topping acquired Forth Associates, a specialist forensic
accounting services business which assists in financial and legal disputes.
The acquisition makes Frenkel Topping the largest independent provider of
financial expert witness reports to the claimant marketplace.

Earlier in 2021 Frenkel Topping acquired A & M Bacon Limited a leading
costs specialist in local government and Court of Protection, and Partners in
Costs Limited who specialise in civil litigation claims, including personal
injury (ranging from catastrophic injury to clinical negligence), professional
negligence, commercial claims and court of protection costs.

Later in 2021, costs consultants, Bidwell Henderson. joined the Frenkel
Topping Group of businesses. One of the UK's largest professional legal
services companies specialising in both legal aid and inter partes law costs
drafting, legal cashiering and costs training services, Bidwell Henderson are
the go-to legal aid costs agency for drafting cost case plans where
significant high-costs are involved in large scale and complex legal cases.

For more information visit:  www.frenkeltoppinggroup.co.uk
(http://www.frenkeltoppinggroup.co.uk/)

 

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