Redde acquires Huddersfield’s FMG in £43m deal

Redde, which specialises in accident management support, legal services, fleet management and policy fulfilment services, is acquiring the FMG group of companies, including FMG Group Holdings Limited and its subsidiary companies and partnership interests for approximately £43.2m.

The FMG Group, based in Huddersfield, undertakes outsourced fleet management, specialist rapid response and recovery management, fleet risk management and legal services. The firm’s customers include leasing companies, fleet insurers and brokers, daily vehicle rental companies, direct fleets, blue light organisations, local councils and the Highways Agency.

The acquisition will wait upon the requisite regulatory approvals being received from The Financial Conduct Authority and the Solicitors Regulation Authority. Completion is expected to occur within 3 months.

The FMG Group is being acquired from its management and a number of funds managed by Endless LLP on a debt-free basis and a normalised level of working capital.

The consideration for the acquisition of all the shares and other vendor interests in the FMG Group will comprise a number of elements, the effect of which is the payment at completion of approximately £38.2m in cash and the issue of new ordinary Redde shares with a total value of £5m.

Redde will also make a cash payment of £2.5m due to additional working capital balances on completion.

The Redde Shares will be valued at their volume-weighted daily average price for the 20 business days prior to completion and the cash consideration will be adjusted by £10,931 per day if completion occurs before (or after) 30 September 2015.

As well as widening Redde’s range of services, the acquisition is expected to be immediately earnings enhancing and cash generative, and will support the Redde’s dividend policy of distributing as much of its profits by way of dividend as it can, taking account of prevailing circumstances and other requirements and commitments.

Martin Ward, chief executive of Redde said: “The addition of FMG to the Redde group supports our strategic objective of growing earnings on a sustainable basis and broadening the scope of services we offer which are related to our core businesses. FMG is a quality business and has a strong reputation in its fields of business for serving its customers well. We have worked together in the legal services arena for a number of years and this acquisition is a further step in strengthening Redde’s proposition to its customers as we build on our recent successes”.

Andrew Cope, executive chairman of FMG, added: “This is a truly exciting day in the long history of FMG. We strongly believe that marrying FMG’s people, knowledge and innovative capacity to Redde’s long term investment and commitment to the vehicle claims industry will result in an outstanding service and technical proposition for our customers today, tomorrow and well into the future”.