XPS Pensions Group has announced that it has agreed to acquire UK insurance consultancy business Polaris Actuaries and Consultants Limited.

The acquisition, which is expected to complete on 28 February, is being funded from the group's existing cash and available debt facilities.

Cash consideration of £23.4m will be paid on completion, of which £9m is subject to certain rights of claw-back, and a further contingent cash consideration of up to £35m will be payable in three years contingent on achieving certain business performance criteria.

The acquisition is intended to "materially accelerate" the group's plans to become a leading player in the UK insurance consulting market and, notwithstanding the group's intended investment in the business in the near term to drive growth, is expected to be immediately earnings accretive.

As part of the acquisition, Polaris will be integrated into the current XPS insurance consulting team, led by XPS head of insurance consulting, David Honour.

This is expected to create a "significant opportunity" for growth, as XPS will be able to offer a wider range of services.

The acquisition of Polaris also provides XPS with the advantage of immediate access to long-term, established relationships with master services agreements with the majority of the UK's leading insurers.

XPS was advised by Deloitte LLP on the transaction.

Commenting on the deal, XPS Pensions Group co-CEO, Paul Cuff, said: "We are delighted to have the Polaris team join us, via this attractive strategic acquisition for XPS.

"This transaction provides a direct path to the group becoming a market-leading insurance consulting provider. It is also brilliant for our people, as in time it will broaden the range of career paths available to them as we become a broader financial services advisory firm.

"We think this transaction is an excellent fit and unlocks opportunity for everyone involved."

Polaris partner and founder, Roger Houlihan, added: "On behalf of the Polaris partners, employees and contractors, I am delighted to join the XPS team, a move that will allow us to build on the success we have achieved while expanding our capabilities.

"I am extremely proud of the business we have built and am excited about the future. We are looking forward to expanding the scale of our operations as we continue to work with our clients to provide a truly market-leading service offering.

"This is a big opportunity for the Polaris team and XPS, with the backing and expertise of a larger organisation we are looking forward to providing a more comprehensive service offering to our newly combined client base."

This article was first published on our sister website, Pensions Age.

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