Management Consulting Group PLC Sale of Kurt Salmon US healthcare business (9110D)
July 12 2016 - 3:20AM
UK Regulatory
TIDMMMC
RNS Number : 9110D
Management Consulting Group PLC
12 July 2016
12 July 2016
Sale of Kurt Salmon US healthcare business
Sale of the non-core healthcare consulting business will allow
MCG to focus on
Kurt Salmon's market leading international retail and consumer
goods practice
MCG today announces that it has entered into an agreement for
the sale of the healthcare consulting business of Kurt Salmon in
the United States to ECG Management Consultants. The cash
consideration payable on completion of the sale is expected to be
approximately $12.0 million (equivalent to approximately GBP9.2
million). A further $1 million of consideration is deferred and
contingent on post completion performance.
MCG is expected to receive net cash proceeds, excluding deferred
consideration, of approximately $10.4 million (equivalent to
approximately GBP8.0 million) after the deduction of estimated
transaction costs of $1.6 million (equivalent to GBP1.2 million).
The net proceeds will be subject to tax. MCG will use the net
proceeds after tax for general corporate purposes.
The Kurt Salmon healthcare business provides management
consulting services to major hospital groups and healthcare
organisations throughout the United States. The profit before tax
attributable to the Kurt Salmon healthcare business for the year
ended 31 December 2015 was GBP0.7 million (Group: loss before tax
GBP3.7 million). The gross assets of the Kurt Salmon healthcare
business at 31 December 2015 were GBP4.3m, excluding goodwill.
The Kurt Salmon business which will be retained by MCG following
the disposal comprises the international consulting practice
focusing on clients in the retail and consumer goods sectors, and
currently principally operating in the United States, Canada, the
United Kingdom, Germany, Japan and China. Kurt Salmon is an
established international brand and a leading management consulting
firm addressing clients in the retail and consumer goods sector.
The Kurt Salmon business which will be retained by MCG represented
approximately 80% of the revenues of the continuing operations of
Kurt Salmon as a whole for the year ended 31 December 2015.
The business which is being sold does not generate synergies
with the larger retail and consumer goods practice of Kurt Salmon
and as part of the MCG group its potential for investment is
limited. The disposal provides an opportunity for the Group to
concentrate on the retained business of Kurt Salmon, which is
wholly focused on clients in the global retail and consumer goods
sector, and Alexander Proudfoot. The disposal is subject to
customary closing conditions, but is expected to complete by the
end of July.
The disposal is expected to generate a one-off IFRS loss before
tax of approximately GBP15 million, principally as a result of the
write off of goodwill held in the consolidated balance sheet of the
Group which will be allocated to the business being sold. The Group
profit and loss account will also include non-recurring expenses
relating to the disposal, including in relation to the
restructuring of certain non-US healthcare consulting operations
which are not part of the sale. The Board believes that the
disposal will not be accretive to earnings per share. The disposal
will strengthen the financial position of the Group by increasing
the level of cash resources available to the remaining
businesses.
Nick Stagg, Chief Executive, commented:
"The sale of the healthcare practice, which follows the sale of
the French and related operations of Kurt Salmon in January 2016,
will allow MCG to focus on the Kurt Salmon business serving the
retail and consumer goods sector, where it is a market leader, as
well as the ongoing recovery in Alexander Proudfoot. MCG is in a
strong financial position, debt free, and now well placed to
promote profitable growth in its more focused continuing
operations."
For further information please contact:
Management Consulting Group PLC
Nick Stagg Chief Executive 020 7710 5000
Chris Povey Finance Director 020 7710 5000
FTI Consulting
Victoria Foster
Mitchell / Ben
Atwell 020 3727 1000
ECG Management Consultants
Chief Executive
Gary K. Edmiston Officer 858 436 3220
Susan Arnold Marketing Director 303-841-7774
Notes to Editors
Management Consulting Group PLC (MMC.L) provides professional
services across a wide range of industries and sectors.
It comprises two independently managed practices: Alexander
Proudfoot and Kurt Salmon, which both operate worldwide. Alexander
Proudfoot helps clients to embed disciplined execution in their
operations to achieve growth targets, revenue and profit goals.
Kurt Salmon provides consulting services to clients in the retail
and consumer goods sector. For further information, visit
www.mcgplc.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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