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."
- 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
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
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
For further information: Investor Relations Contacts: Jonathan Hackshaw, Director, Investor Relations & Corporate Communications, Information Services Corporation, 306-798-2136, [email protected]; Pamela Keck, Manager, Investor Relations, Information Services Corporate, 306-798-1136, [email protected]; Media Contact: Paula Kohl, Manager, Corporate Communications, Information Services Corporation, 306-787-8472, [email protected]