TIDMFEN
RNS Number : 4557N
Frenkel Topping Group PLC
01 February 2021
1 February 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
Frenkel Topping Group plc
("Frenkel Topping", the "Company" or the "Group")
Acquisitions of A & M Bacon Limited and Partners in Costs
Limited
Frenkel Topping (AIM: FEN), the specialist independent financial
advisor and asset manager focused on asset protection for
vulnerable clients, is pleased to announce that it has acquired the
entire issued share capital of A & M Bacon Limited ("A & M
Bacon") (through the purchase of its holding company) and Partners
in Costs Limited ("PIC") (through the purchase of its holding
company and the purchase of shares directly in PIC) (the
"Acquisitions"). A & M Bacon is a firm of civil and commercial
litigation costs specialists and PIC is one of the UK's leading
costs law specialists with costs lawyers and costs consultants.
The combined total maximum consideration is GBP9.0 million of
which GBP5.0 million is payable in cash and GBP0.9 million through
the issue of 2,000,000 ordinary shares of 0.5p each in the Company
("Ordinary Shares") on completion (the "Initial Consideration") and
a further GBP3.1 million deferred consideration (the "Deferred
Consideration") is payable in cash in two tranches on 31 January
2022 and 31 January 2023. Further details on the financial terms of
the Acquisitions are set out below.
Transaction Rationale
The Acquisitions are 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 personal
injury and clinical negligence. Both PIC and A & M Bacon are
leading specialist cost firms.
In addition to certain cost synergies, the claimants these two
companies provide services to, will naturally benefit from the
additional services that Frenkel Topping offer, such as welfare
benefits assessments, trust advice in conjunction with forensic
accounting and expert witness services throughout the entire
timespan of a claim.
Bringing PIC and A&M Bacon into the wider Group will enhance
the Company's chances of winning the AUM mandate in the result of a
successful claim. This concurs with the Group's strategy to give
financial advice to recipients of large personal injury/clinical
negligence awards and to manage the damages within the Group's
discretionary asset management business.
As set out in the Company's strategy, the focus is to ensure the
Company has as many touch points as possible in the personal
injury/clinical negligence space in order to capture as many
revenue opportunities as possible.
The Acquisitions are cash generative and will be immediately
earnings enhancing following completion.
About PIC and A & M Bacon
PIC was established as Northern Costing in 1996 and incorporated
in 2001 with an office in Doncaster and fee earners nationwide.
They currently employee 52 staff and specialise in civil litigation
claims, including personal injury (ranging from catastrophic injury
to clinical negligence), professional negligence, commercial claims
and court of protection costs. In the year ended 30 April 2020, PIC
had revenues of GBP3,640k, generated GBP734k profit before tax and
reported GBP2,629k net assets as at 30 April 2020.
A & M Bacon was incorporated in 1999 and is based in
Doncaster. They currently employee 12 staff. They are a leading
costs firm dealing with commercial litigation, immigration claims,
planning disputes, ATE premium recovery and personal injury claims
for both defendants and claimants. In the year ended 31 March 2020,
A & M Bacon had revenues of GBP1,064k, generated GBP191k profit
before tax and reported GBP707k net assets as at 31 March 2020.
There will be a number of synergies when these two businesses
are combined within Frenkel Topping that will drive an increase in
normalised EBITDA going forwards.
Reuben Glynn and Teresa Aitken will remain with the Group in
their roles, with Reuben Glynn as Chief Executive of A&M Bacon
and Teresa Aitken as Chief Executive of PIC. They have extensive
experience in civil and commercial litigation costs. As
shareholders in the Company, they will be fully incentivised to
drive the future growth of the business.
Consideration for the Acquisitions
The Company has agreed to acquire PIC and its holding company
(TMA Holdings Limited) from Teresa Aitken, and Bacon Legal
Consulting Limited, the holding company for A & M Bacon, from
Reuben Glynn (the "Sellers") for a total consideration of GBP9
million.
Initial Consideration of GBP5.9 million:
-- GBP5 million paid in cash at the time of the Acquisition
(subject to a post-completion adjustment following a completion
accounts process)
-- GBP0.9m payable with the issue of 2,000,000 Ordinary Shares
at the average rolling share price for the last 30 days up to 29
January 2021, being 45p.
Deferred consideration of GBP3.1 million is payable in cash in
two tranches on 31 January 2022 and 31 January 2023.
Admission
Application will be made by the Company for 2,000,000 Ordinary
Shares to be admitted to trading on AIM ("Admission"). It is
expected that Admission of the new Ordinary Shares will occur on or
around 8:00 a.m. on 5 February 2021. These Ordinary Shares will be
subject to lock-in arrangements for the next two years.
Total Voting Rights
Following the Admission, the total number of Ordinary Shares in
the Company will be 113,157,349 . There are 3,105,708 shares held
in treasury and thus the total number of voting rights in the
Company are 110,051,641 (the "Figure"). This Figure may be used by
shareholders as the denominator for the calculations by which they
will determine if they are required to notify their interest in, or
a change to their interest in the Company under the FCA's
Disclosure Guidance and Transparency Rules.
Richard Fraser, Chief Executive Officer of Frenkel Topping,
said:
"The acquisitions fit exactly into our strategy of acquiring
high-quality businesses in the personal injury and clinical
negligence market and builds on the successful acquisition and
integration of Forths last year . I have known Reuben and Teresa
for many years and have been greatly impressed with what they and
their team have built, and I very much look forward to welcoming
them into the enlarged business. These acquisitions will further
strengthen our offering and drive the continued growth of Frenkel
Topping."
Reuben Glynn, Chief Executive Officer of A & M Bacon,
said:
"I am extremely excited to join the Frenkel Topping Group.
A&M Bacon have become the leading costs specialist in local
government and Court of Protection.
Unfortunately, last year we lost our founder Michael Bacon after
a short illness. Michael was a true legal cost legend. Michael
would have wholeheartedly supported this opportunity.
Together with Frenkel Topping I am looking forward to providing
the highest level of service to Professional deputies and their
protected parties."
Teresa Aitken, Chief Executive Officer of PIC, said:
"The client remains the centre of everything we do at PIC. As a
team we are excited to be on board with the Frenkel Topping Group
to ultimately ensure that together the injured client receives a
seamless service.
We're particularly looking forward to getting involved and
helping to shape the knowledge hub through training and
opportunities to young adults to achieve their potential as well as
the Frenkel Topping charitable foundation for those individuals who
through life experience are unable to access damages to help them
deal with life's challenges.
Together, as a Group were keen to make a real difference to our
society."
For further information:
Frenkel Topping Group plc Tel: 0161 886 8000
Richard Fraser, Chief Executive www.frenkeltopping.co.uk
Officer
Elaine Cullen-Grant, Chief Financial
Officer
finnCap Ltd Tel: 020 7220 0500
Carl Holmes / Giles Rolls (Corporate
Finance)
Tim Redfern / Richard Chambers (ECM)
About Frenkel Topping Group:
The financial services firm consists of Frenkel Topping Limited,
Ascencia Investment Management, Obiter Wealth Management, Equatas
Accountants and Forth Associates.
The Group 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.
For more information visit: www.frenkeltopping.co.uk
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END
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