PROPOSED SALE OF PROFESSIONAL SERVICES DIVISION
Initial cash consideration and further contingent cash consideration
Substantial return of capital to Shareholders to follow
Following Disposal, the Group will focus on insurance related technology businesses
Quindell plc (AIM: QPP.L) announces that it has today entered into a conditional sale and purchase agreement to dispose of the Professional Services Division ("PSD") to Slater and Gordon Limited ("SGH") for an initial cash consideration of £637 million and further contingent cash consideration payable in respect of the future settlement of its clients' noise induced hearing loss ("NIHL") cases ("Disposal"). In addition, the Company will, as soon as practicable, post a Circular relating to the Disposal and a notice convening a General Meeting of the Company to be held on 17 April 2015 to approve the Disposal.
In view of the size of the PSD relative to the Group, the Disposal will result in a fundamental change in the business of the Company for the purpose of Rule 15 of the AIM Rules and it is therefore conditional upon the approval of Shareholders, amongst other matters.
The Board also announces a clear strategy for the Group should the Disposal complete. Quindell will be focused on its range of technology businesses with strong growth potential, disposing of non-core businesses and returning proceeds to Shareholders.
Highlights
· £637 million to be paid in cash at completion;
· Deferred cash consideration of 50 per cent share of net fees from the settlement of NIHL cases transferred on completion (as at 29 March 2015, the Company was acting for clients in respect of approximately 53,000 NIHL cases);
· Majority of cash proceeds from the Disposal to fund substantial return of capital to Shareholders, expected in the second half of 2015 - precise amount of any distribution to Shareholders has not yet been determined but the Directors expect that, in aggregate, the initial tranche will be up to £500 million (representing in excess of £1 per share); further cash distributions dependent on the deferred cash consideration, business disposals of non-core businesses and underlying performance;
· Following the Disposal (if completed), Quindell will comprise a range of insurance related technology businesses with strong growth potential; and
· The Board will take appropriate action to deliver shareholder value from non-core assets.
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