XPS Pensions Group (LSE:XPS), the UK pensions consulting and administration business, has agreed to acquire the trade and assets of Austin Professional Resourcing (APR) for up to £16.3m in total consideration, adding an established actuarial consultancy with relationships across most of the UK's top 10 insurers.
The deal is structured in three tranches: £3.3m payable on completion, a further £3m non-contingent cash payment due by 31 March 2027, and up to £10m in contingent earnout payments across years two and three, subject to stretching performance criteria.
APR, founded in 2006, employs more than 70 client-facing actuarial professionals and generated revenues of £10.7m in the year ended 31 March, placing the total deal at less than 1x revenue on a headline basis.
XPS will fund the acquisition from existing cash and available debt facilities, with completion expected on or around 31 July.
The strategic pull is APR's foothold in general insurance, a segment XPS did not previously serve at scale; APR counts over 20 general insurers among its clients in a market XPS estimates at approximately £1.5bn annually.
XPS expects the acquisition to be earnings enhancing in the first full year of ownership, with return on invested capital exceeding the group's cost of capital by year three.
"We have doubled our total addressable market to £6bn+ in the space of less than two years," said Paul Cuff, Co-CEO of XPS Group, citing the combination of strategic acquisitions and senior recruitment since the group began its diversification drive.
