Acquisition a natural fit for Morneau Shepell; reinforces Morneau Shepell position as clear leader in Canada
TORONTO, November 1, 2012
Morneau Shepell Inc. (the “Company” or “Morneau Shepell”) (TSX: MSI) today announced the acquisition of Mercer Canada’s pension and benefits outsourcing business, further solidifying Morneau Shepell’s leadership position in this business.
Through this acquisition, Morneau Shepell gains more than 250 employees and approximately 60 clients, including some major multi-national companies. These clients represent approximately $25 million in additional annual revenue to the Company. Some of these clients are existing Morneau Shepell clients, and some are new to the Company. “We are pleased to welcome our new clients and employees to Morneau Shepell,” commented Alan Torrie, President and CEO. “We are equally pleased to broaden our service offerings to a number of our existing clients.”
“Today’s acquisition is in line with our stated strategy to grow our business profitably through acquisitions that complement our existing service offerings or expand our market presence,” said Torrie. “This acquisition is a natural fit for our company, clearly distinguishing Morneau Shepell as the pension and benefits administration leader in Canada,” commented Torrie.
“Our goal was to ensure that the clients of our outsourcing business transition to an organization with a strong track record of outsourcing experience and leading edge technology solutions,” said Jacques Théorêt, Mercer Canada/Latin America Region regarding their selection of Morneau Shepell. “We look forward to continuing our focus on pension consulting and supporting our clients in the small pension plan third party administration segment.”
Commenting on the financial terms of the acquisition, Scott Milligan, CFO, confirmed that the assets of the business were received for no cash consideration. Morneau Shepell expects to invest between $20 million and $25 million, over a three-year period, in systems and service improvements to support the acquired clients. Excluding this investment, the transaction is expected to be accretive in 2013.
Notice of Conference Call: Thursday, November 1, 2012 at 1 p.m. ET
Management of Morneau Shepell will host an investor conference call today, Thursday, November 1, 2012, at 1 p.m. ET. The conference call is open to all those wishing to participate, with a question and answer period following senior management remarks. In order to participate in the live conference call, please call 416-695-7806 or 1-888-789-9572 (Participant code 8508656). A replay of the call will be available at morneaushepell.com.
This news release contains “forward-looking statements” within the meaning of applicable securities laws, such as statements concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Use of words such as “may”, “will”, “expect”, “believe”, or other words of similar effect may indicate a “forward-looking” statement. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties, including those described in the Company’s publicly filed documents (available on SEDAR at www.sedar.com) and in the firm’s MD&A under the heading “Risks and Uncertainties”.
Those risks and uncertainties include ability to maintain profitability and manage growth, reliance on information systems and technology, reputational risk, dependence on key clients, reliance on key professionals and economic conditions. Many of these risks and uncertainties can affect the firm’s actual results and could cause the Company’s actual results to differ materially from those expressed or implied in any forward-looking statement made by the Company or on the firm’s behalf. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements as a prediction of actual results. All forward-looking statements in this news release are qualified by these cautionary statements. These statements are made as of the date of this news release and, except as required by applicable law, the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Additionally, the Company undertakes no obligation to comment on analyses, expectations or statements made by third parties in respect of the Company, its financial or operating results or its securities.
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