Duke Street Capital

Duke Street Capital ("DSC") announced on Wednesday 13 April 2005 the acquisition of Benefits and Consultancy Services Group ("BCS") from Hogg Robinson - a company owned by Permira. The transaction was completed on 8 July 2005.

BCS comprises three businesses, Entegria, Paymaster and Claybrook, which provide specialist outsourcing and consultancy services, focusing on outsourced pensions payments and processing, employee benefits consulting and the provision and maintenance of pensions software.

BCS has a strong reputation and long-standing relationships with a stable and high quality client base. It has a good mix of retained and consultancy fee income and strong forecast growth. In addition, it has market-leading proprietary software, with the only operating system that is authorised for use within the UK central government pensions sector and the UK's leading actuarial software. For the period ending 31 March 2005, BCS generated income of £75.6m.

The pensions and benefits markets as a whole are increasing and demand for high quality, specialist providers is likely to remain strong as the cost and complexity of these products increases. Secondly, as companies shift from Defined Benefit to Defined Contribution schemes as a way of mitigating pension scheme deficits, a substantial increase in project work for actuarial and pension investment consultants is anticipated. Furthermore, trustees are likely to seek additional advice from independent consultants in the wake of the Myners report, increasing pensions fund deficits, and ahead of the forthcoming Pensions Bill and the consolidation of the existing tax treatment of pensions provisions into a single regime. The need for lower cost, high quality services is also driving strong growth in the Human Resources Services market, of which benefits and pensions is a large and growing part.

The senior management team will remain with the company, and work with DSC to develop the business organically and through selective acquisitions. The company is well placed to participate in the strong growth expected in the next few years in the life & pensions and benefits markets.

Canaccord Genuity acted as financial advisor to DSC.