TORONTO, ONTARIO--(Marketwire - March 2, 2009) - Groupworks Financial Corp. ("Groupworks" or the "Company") (TSX VENTURE:GWC) announces that the Company has closed its previously announced transaction with People Corporation detailed in the filing statement (the "Filing Statement") dated January 27, 2009 filed on the SEDAR website at sedar.com. The Filing Statement provides disclosure on the acquisition of People Corporation, pursuant to a share exchange agreement dated December 31, 2008. People Corporation is the parent of operating companies HealthSource Plus Inc. and People First HR Services Ltd.
The transaction is expected to increase the Company's annual revenue and EBITDA to approximately $20 million and $2.3 million respectively and strengthen Groupworks' position as the leading consolidator of the independent benefit and pension advisory firms in Canada. Groupworks is committed to maintaining and growing HealthSource Plus and People First HR Services under their current brands.
The purchase price for the transaction is approximately $6.25 million, satisfied by the issuance of 15,831,930 common shares of the Company and the issuance of non-interest bearing vendor take-back notes in the aggregate amount of approximately $2.3 million to be paid by the Company over a 5 year period.
Laurie Goldberg, CEO of People Corporation has joined the board of directors and has been appointed to the role of CEO of Groupworks. John Gallivan continues as President of the Company and a member of the board of directors.
About People Corporation
People Corporation via its wholly-owned subsidiaries, HealthSource Plus Inc. and People First HR Services Ltd., delivers strategic HR consulting service including: employee benefit consulting, third party administration, wellness programs, and other HR services including recruiting and career transition services to help its clients recruit, reward and retain the best people in their respective industries. People Corporation serves over 500 Canadian corporations with tens of thousands of employees and has over $100 million of funds under administration. Overall, it employs approximately 100 professionals and support staff through the three subsidiaries with offices in Toronto and St. Catharines, Ontario plus Montreal, Quebec and Winnipeg, Manitoba. The Winnipeg office also serves as its corporate head office.
About People First HR Services Ltd. ("People First")
Based in Winnipeg and established in 2000, People First is the largest and fastest growing full-service HR consulting firm in Manitoba providing a wide range of human resource products and services with a unique strategic orientation.
About HealthSource Plus Inc. ("HSP")
HSP is one of the fastest growing employee benefits firms in Canada. HSP is a reseller of insurance products and a provider of third party administration services with a primary focus on providing employee benefits to employers on an Administration Services Only ("ASO") model. ASO can enable employers to reduce the cost of providing benefits by self-insuring a greater portion of risk through administrative services only (ASO) arrangements. Health and dental benefits and even short-term (STD) benefits can be provided on an ASO basis in Canada. HSP has over 50 employees which work to provide employee benefits arrangement to approximately 300 companies. HSP assumes no underwriting risk as all insurance policies are underwritten by traditional insurance companies. HSP was formed in 1992 and is based in Toronto with offices in St. Catharines, Montreal and Winnipeg.
About Groupworks Financial Corp.
Groupworks Financial Corp. is a leading consolidator of independent employee benefits and pension consulting practices in Canada. The Company's objective is to become a national benefits and pension advisory and administration organization, building on the success of its acquisitions of Gallivan & Associates, Buffett Taylor, The Investment Guild and its recent acquisitions of White Willow Benefits Consultants and People Corporation.
The independent pension and benefits network across Canada is estimated at over 1000 independent brokers representing over $1 billion in annual revenue.
This news release contains "forward-looking information" within the meaning of applicable securities laws, such as information concerning anticipated future events, results, circumstances, performance or expectations that are not historical facts. Use of words such as "may", "will", "expect", "believe", or other words of similar effect may indicate forward-looking information including the impact of that transaction on our earnings and cash flow, and the anticipated benefits of the transaction. This information is not a guarantee of future performance and is subject to numerous risks and uncertainties, including those described in our publicly filed documents (which are available on SEDAR at www.sedar.com). Those risks and uncertainties include: our ability to maintain profitability and manage growth; strong competition from other advisors and changes in the current legislation could result in significant competition from the banking industry; failure of information systems and technology; dependence on key clients; seasonality of revenues and the resulting possible impairment on working capital; reliance on key professionals; additional financing may be required and may not be available under terms favourable to us; there can be no assurance that any suitable future acquisition will be available to us or that, if available, the terms of the acquisition will be favourable to us; and a change in general economic conditions. Many of these risks and uncertainties can affect our actual results and could cause our actual results to differ materially from those expressed or implied in any forward-looking information made by us or on our behalf. Given these risks and uncertainties, investors should not place undue reliance on forward looking information as a prediction of actual results. All forward-looking information in this news release is qualified by these cautionary statements. This information is made as of the date of this news release and, except as required by applicable law, we undertake no obligation to publicly update or revise any forward looking information, whether as a result of new information, future events or otherwise. Additionally, we undertake 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.
Non GAAP Financial Measures
EBITDA, which is defined as earnings (loss) before interest, taxes, dividends, depreciation and amortization, is not a financial measure recognized by Canadian generally accepted accounting principles ("GAAP") and does not have a standardized meaning prescribed by GAAP. The Company believes that this Non-GAAP financial measure provides meaningful information on the Company's performance and operating results. Readers are cautioned that EBITDA has no standardized meaning as prescribed by GAAP and may not be comparable to similar measures presented by other companies. Further, readers are cautioned that EBITDA should not replace net income or loss or cash flows from operating, investing and financing activities (as determined in accordance with GAAP), as an indicator of the Company's performance.
FOR FURTHER INFORMATION PLEASE CONTACT:
Groupworks Financial Corp.
(905) 470-6723 (FAX)