TORONTO, Aug. 7, 2019 /CNW/ - Morneau Shepell Inc. (TSX:MSI) ("Morneau Shepell" or the "Company"), the leading provider of technology-enabled HR services that deliver an integrated approach to well-being, today announced that it has closed the previously announced acquisition of the stand-alone, large market, health and defined benefit ("DB") pension plan administration business of Mercer in the United States. Of the total purchase price of approximately US$57 million, approximately US$40 million was paid in cash at closing through use of the Company's revolving credit facilities. The balance will be paid over the next year, subject to certain post-closing adjustments.
"We are pleased to welcome the very talented employees joining us with this acquisition and our new clients that we look forward to supporting and bringing exceptional service to their employees," said Stephen Liptrap, President and Chief Executive Officer, Morneau Shepell. "This acquisition is in line with our strategic plan of which U.S. expansion is a critical component."
The Company anticipates that this acquisition will represent approximately 12 per cent of Morneau Shepell's annualized revenue. In addition, the Company expects Adjusted EBITDA margins will be slightly diluted in the short term.
With this transaction, Morneau Shepell will add approximately two million participants, further solidifying Morneau Shepell as a leading provider of administration of health and DB pension plans across the continent.
About Morneau Shepell
Morneau Shepell is the leading provider of technology-enabled HR services that deliver an integrated approach to well-being through our cloud-based platform. Our focus is providing everything our clients need to support the mental, physical, social and financial well-being of their people. By improving lives, we improve business. Our approach spans services in employee and family assistance, health and wellness, recognition, pension and benefits administration, retirement and benefits consulting, actuarial and investment services. Morneau Shepell employs almost 5,000 employees who work with some 24,000 client organizations that use our services in 162 countries. Morneau Shepell is a publicly traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit 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", "anticipate" or other words of similar effect may indicate a "forward-looking" statement. Forward-looking information in this news release includes anticipated future earnings, margin growth and annualized revenue, expectations regarding future profitable growth and the other benefits expected to be obtained as a result of this acquisition. The Company believes the expectations reflected in such forward-looking information are reasonable, but no assurance can be given that these expectations will prove to be correct. As such, these forward-looking statements should not be unduly relied upon.
Forward-looking information herein is based on various assumptions and expectations that Morneau Shepell believes are reasonable in the circumstances. No assurance can be given that these assumptions and expectations will prove to be correct. Those assumptions and expectations are based on information currently available to Morneau Shepell, including information obtained from third-party sources, and the historic performance of Morneau Shepell's businesses and the acquired business. Such assumptions include anticipated financial performance, current business and economic trends, business prospects, currency, exchange and interest rates, cost estimates, Morneau Shepell's ability to obtain financing on acceptable terms and Morneau Shepell's ability to achieve cost-efficiencies and cross-selling anticipated to achieve expected synergies, and are subject to the risks and uncertainties set forth below. Readers are cautioned that the preceding list of assumptions is not exhaustive.
These forward-looking 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 sedar.com). 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 Company'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 Company'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.
SOURCE Morneau Shepell Inc.
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