REG - XPS Pensions Group - Acquisition of Polaris Actuaries & Consultants Ltd

XPS PensionsAnnouncement

24/02/2025 07:00

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RNS Number : 1796Y  XPS Pensions Group PLC  24 February 2025

This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.

24 February 2025

XPS Pensions Group plc

("XPS" or the "Group")

Acquisition of Polaris Actuaries and Consultants Limited

A material acceleration of XPS Group's diversification strategy

XPS Pensions Group plc, is pleased to announce that it has entered into an
agreement to acquire the entire issued share capital of Polaris Actuaries and
Consultants Limited ("Polaris"), a highly regarded UK insurance consultancy
business with a blue chip client base, (the "Acquisition"). The Acquisition
will materially accelerate the Group's strategy of becoming a leading player
in the fragmented UK Insurance Consulting market.  The Acquisition is
expected to complete on 28 February 2025.

 

Polaris was established in 2015 with the strategy to provide insurance clients
with high quality actuarial and technical services, supporting them on complex
financial, risk and regulatory projects. Today, Polaris is at the forefront of
its field, providing a range of services from large scale, multi-disciplined
transformation programs to specialist project support for some of the UK's
largest insurance companies.

 

Polaris will be integrated into the current XPS Insurance Consulting team,
which is focused on high impact, strategic advice, consulting on
transformational change at the initiation stage of large scale projects.
Polaris specialises in using a flexible workforce to lead the delivery stages
of such projects, and as such is a highly complementary business. The
combination will create a significant opportunity for growth as XPS will now
be able to offer a full range of services from a strategic consultancy at the
front end through to on-the-ground implementation.  Polaris also offers XPS
the advantage of immediate access to long term, trusted relationships with
established Master Services Agreements with majority of the UK's leading
insurers.

 

The enlarged XPS Insurance Consulting team will be well positioned to deliver
meaningful and reoccurring revenue within XPS with a senior team of five
highly experienced partners (including the three Polaris partners), led by
David Honour, with combined insurance industry experience of 100+ years.  The
end addressable market is large, with UK insurers collectively spending well
over £1bn p.a. on external support in maintaining and growing their
businesses.

 

Cash consideration of £23.4 million will be paid on completion (of which £9m
is subject to certain rights of claw-back) and a further contingent cash
consideration of up to £35.0 million will be payable in three years
contingent on achieving certain stretching business performance criteria. The
acquisition is being funded from the Group's existing cash and available debt
facilities.  In the year ended 31 December 2024, Polaris generated revenue of
£17.7 million ((1)) at approximately 25% ((1)) normalised adjusted EBITDA
margin. Notwithstanding the Group's intended investment in the business in the
near term to drive enhanced growth, the Acquisition is expected to be
immediately earnings accretive.

 

XPS were advised by Deloitte LLP on the transaction.

 

((1)       ) From unaudited management accounts

 

Paul Cuff, Co-CEO of XPS Pensions Group, said:

 

"We are delighted to have the Polaris team join us, via this attractive
strategic acquisition for XPS.  We have highly complementary skills and
together we can provide the full range of services that insurers need as they
address opportunities and challenges in their own thriving market.  This
transaction provides a direct path to the Group becoming a market-leading
Insurance Consulting provider.  It is also brilliant for our people, as in
time it will broaden the range of career paths available to them as we become
a broader financial services advisory firm.

 

The strong existing relationships we have with Polaris are important, with our
head of insurance consulting David Honour having known the partners of Polaris
for many years after working with them in prior roles.  We think this
transaction is an excellent fit and unlocks opportunity for everyone
involved."

 

Roger Houlihan, Partner and Founder of Polaris, said:

 

"On behalf of the Polaris partners, employees and contractors, I am delighted
to join the XPS team, a move that will allow us to build on the success we
have achieved while expanding our capabilities. I am extremely proud of the
business we have built and am excited about the future. We are looking forward
to expanding the scale of our operations as we continue to work with our
clients to provide a truly market-leading service offering. This is a big
opportunity for the Polaris team and XPS, with the backing and expertise of a
larger organisation we are looking forward to providing a more comprehensive
service offering to our newly combined client base.

 

Importantly, the core values and approach that has made Polaris successful
will remain unchanged, our values closely align to XPS's enabling us to
continue to deliver exceptional results for our customers and provide exciting
opportunities for our team."

 

About Polaris

 

Polaris Actuaries and Consultants Limited is a leading and trusted provider of
insurance, risk and regulatory consulting services. Polaris specialises in
actuarial consulting providing high quality actuarial and technical services
to insurance clients in the UK, and supporting them on complex financial, risk
and regulatory and actuarial change programs.

 

For further information, contact:

 

XPS Pensions
Group
+44 (0)20 3978 8626

 

Snehal Shah, Chief Financial Officer
 

 

Canaccord Genuity (Joint
Broker)                                 +44
(0)20 7523 8000

 

Adam
James
 

George Grainger

 

Deutsche Numis (Joint Broker)
+44 (0)20 7260 1000

 

Stuart Skinner

Kevin Cruickshank

 

Camarco (Media
Enquiries)
+44 (0)20 3757 4980; xps@camarco.co.uk

 

Gordon Poole

Rosie Driscoll

Phoebe Pugh

 

Notes to Editors:

 

XPS Group is a leading UK consulting and administration business specialising
in the pensions and insurance sectors. A FTSE 250 company, XPS combines
expertise and insight with advanced technology and analytics to address the
needs of over 1,400 pension schemes and their sponsoring employers on an
ongoing and project basis. We undertake pensions administration for over one
million members and provide advisory services to schemes and corporate
sponsors in respect of schemes of all sizes, including 83 with assets over
£1bn. We also provide wider ranging support to insurance companies in the
life and bulk annuities sector.

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