Charles Taylor to buy US insurance administrator MRM

Charles Taylor subsidiary, Charles Taylor General Agency, has agreed to buy US West Coat insurance claims third party administrator Metro Risk Management for up to $1.8m.

The company will pay $1.3m in cash on completion, expected to be 5 September, to buy MRM from Nautilus. An additional payment of up to $500,000 in deferred consideration will be paid on the third anniversary of the deal, subject to certain performance targets.

In the year to the end of December 2016, MRM - which specialises in managing workers' compensation claims in California - generated revenues of $3m and pre-tax profit of $800,000. Following completion, MRM will be consolidated into Charles Taylor's accounts for the remainder of the year ending 31 December 2017 and after transaction and integration related costs, is not expected to make a material contribution to earnings for that period.

The acquisition is expected to contribute modestly to revenue, profits and earnings in the year ending 31 December 2018 and in subsequent years.

Charles Taylor said the acquisition will enable it to support the growth of its US TPA business, CTTPA.

Chief executive officer Charles Taylor said: "I am delighted to welcome our new colleagues from MRM to Charles Taylor. This acquisition reflects our continued commitment to grow our TPA business in the USA and globally, to expand our technical expertise internationally and to strengthen our relationships with high-quality clients.

At 1024 BST, the shares were down 3.2% to 234p.