REGINA, July 22, 2015 /CNW/
- Information Services Corporation (TSX:ISV), ("ISC" or the
"Company") today announced that the Company has entered into a
Share Purchase Agreement (the "Agreement") pursuant to which ISC
has agreed to acquire all of the issued and outstanding common
shares of ESC Corporate Services Ltd. ("ESC"), a leading
technology-enabled corporate services provider, for up to
CAD$28 million consisting of cash and
debt. ESC is a private Canadian company with offices in
Toronto and Montreal and over 4,500 clients, including law
firms, corporations and financial institutions.
ISC expects the transaction to be immediately accretive to the
Company's EPS (earnings per share). "I'm extremely pleased to
announce our agreement to acquire ESC," said Jeff Stusek, President & CEO of ISC.
"Following our announcement on July 7,
2015 of our planned investment in OneMove Technologies Inc.,
this transaction is another example of a growing business that
complements our registry services competency and extends our
geographic footprint and diversity, further supporting our
strategic growth agenda."
The Company expects to complete the transaction through a wholly
owned subsidiary using a combination of cash and debt with
CAD$21 million of the purchase price
payable on closing of the transaction and up to CAD$7 million payable in the form of a
performance-based, 12-month earn out. The transaction is expected
to close in the third quarter of 2015, subject to a number of
closing conditions, including ISC obtaining clearance for the
transaction from the Commissioner of Competition.
As a wholly owned subsidiary of ISC, ESC will continue to
provide law firms, corporations, financial service institutions,
and others with services and online custom solutions to fulfil a
wide variety of their clients' public records due diligence,
filings and corporate supply requirements in connection with public
business registries in Canada and
certain other countries.
"We at ESC are very excited about today's announcement," said
Chris Valentine, ESC's President
& CEO. "Over the past five years, we have consistently grown
the business. We are now at a point where we can benefit from the
support and opportunities available from ownership by a larger
organization like ISC."
Transaction Highlights
- Sound Business: ESC has attractive gross margins,
free cash flow, low capital expenditures and a strong market
position with major accounts. For the year ended December 31, 2014, ESC realized revenue of over
CAD$11 million.
- Growth Opportunities: The western Canadian market
remains an opportunity for ESC's business. ESC also continues to
capitalize on business process outsourcing trends driven by an
increase in regulatory and compliance mandates, particularly in the
financial services sector, and an overall drive for cost
efficiencies within its client base.
- Solid Client Base: ESC's bilingual,
multi-disciplinary customer service teams in Toronto and Montreal deliver business solutions to legal
and financial professionals, corporations and financial
institutions across Canada who
require national solutions through the use of public records.
The representations, warranties, covenants and indemnities provided
by the shareholders of ESC in the Agreement are subject to certain
time limitations, other limitations and maximum indemnity
limits.
ISC's exclusive financial advisor for the transaction is Origin
Merchant Partners.
For more information about ESC, please visit their website at
http://www.eservicecorp.ca
Conference Call
An investor conference call will be held on Wednesday, July 22, 2015 at 11:00 a.m. Eastern Time (9:00 a.m. Saskatchewan Time) to discuss this
transaction. Participants may join the call by dialing
toll-free 1-888-390-0605 or 1-416-764-8609 for calls outside
North America. Simultaneously, an
audio webcast of the conference call will also be available at the
following link http://isc.investorroom.com/events. Media are
invited to attend on a listen-only basis.
The webcast will be available for replay 24 hours after the
event until 11:59 p.m. EST on
July 31, 2015 at
http://isc.investorroom.com/events
About ISC
ISC is an experienced provider of registry and information
services for government, individuals and private sector business.
As the exclusive provider of the land titles, surveys, personal
property and corporate registries for Saskatchewan, the Company maintains and
operates these registries, which are key supporters of economic
activity in the province.
Cautionary Note regarding Forward-Looking Information
This news release contains forward-looking statements within the
meaning of applicable Canadian Securities legislation, including
statements with respect to the clearance for the transaction from
the Commissioner of Competition, the closing of this transaction
and expected timing of closing, the expectation that the
transaction will be immediately accretive to the Company's EPS
(earnings per share) and expected future opportunities for growth
of ESC Corporate Services Ltd.'s business. All statements
other than statements of historical fact are forward-looking
statements. Forward-looking information involves known and
unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those expressed
or implied by such forward-looking information. Although ISC
believes the forward-looking information contained in this release
is based upon reasonable assumptions, readers are cautioned not to
place undue reliance on forward-looking information as it is
inherently uncertain and no assurance can be given that the
expectations reflected in such information will prove to be
correct. Many factors and risks could cause our actual
results to differ materially from those expressed or implied by
forward-looking information including those detailed in ISC's
Annual Information Form, dated March 17,
2015, ISC's unaudited condensed Consolidated Financial
Statements and Notes and Management's Discussion and Analysis for
the quarter ended March 31, 2015 as
well as other documents filed by ISC with Canadian securities
regulators through SEDAR (www.sedar.com) from time to time.
Investors and others should carefully consider the above-noted
factors and risks and other uncertainties and potential
events. The forward-looking information in this release is
made as of the date hereof and, except as required under applicable
securities legislation, ISC assumes no obligation to update or
revise such information to reflect new events or circumstances.
SOURCE Information Services Corporation