TORONTO, ONTARIO--(CCNMatthews - July 9, 2007) - Groupworks Financial Corp. (TSX VENTURE:GWC) ("Groupworks" or the "Company") announces that the Company has acquired all the outstanding common shares of Gallivan & Associates Student Networks Inc. ("Gallivan"). This acquisition was previously announced on July 5, 2007.
Gallivan, based in Waterloo, Ontario, is a group benefits advisory firm with 22 full time employees in offices across Canada. The acquisition substantially increases Groupworks' revenue and further strengthens the Company's position as the leading consolidator of independent benefit and pension advisory firms in Canada. Groupworks is committed to maintaining and growing Gallivan under its current brand.
The aggregate purchase price paid for Gallivan was $5,893,644, after adjusting for the assumption of certain liabilities, and was satisfied as follows; $2,228,258 paid in cash at closing, $1,221,796 satisfied by a vendor note and $2,443,590 satisfied by the issuance of 3,054,488 common shares of Groupworks issued at $0.80 per share, making the acquisition immediately accretive to Groupworks. The vendor note portion of the purchase price is subject to certain performance criteria to ensure that the purchase price is representative of sustained value and financial performance.
"We have acquired a strong and well-known national practice, which expands our client base across the country, and demonstrates our continued commitment to partnering with premier benefit and pension advisory firms in Canada." said Derrick March, CEO of Groupworks. "Gallivan has a demonstrated record in top line and bottom line growth and is at the leading edge of management best practices for our industry and we are looking forward to working with the Gallivan team to introduce these firm-wide."
John Gallivan, President of Gallivan will be joining the board of directors of Groupworks. Mr. Gallivan commented, "Based on my experience in the employee benefits business of over 20 years, I believe Groupworks has developed the most innovative business succession model to be introduced into our sector. As owners of Gallivan, this transaction crystallizes the current value of our business, and the share consideration component of the purchase price provides us with ownership in a public company and the opportunity for further capital appreciation." Mr. Gallivan also said, "Groupworks has the management experience and resources enabling us to partner with a firm that will provide the tools to take our business to the next level, give our employees excellent growth opportunities, and also provides us with the ability to maintain our personal branding that we have been building since 1991."
Mr. March further commented that, "This acquisition is more than just financially positive for our shareholders. It also provides us with a strong link to the universities and colleges in Canada and we intend to use these relationships to recruit the next generation of advisors, a significant part of our succession planning solution for our industry".
About Gallivan & Associates
Gallivan, established in 1991, provides group benefits for post-secondary students at 27 universities, colleges and technical institutes representing over 160,000 students in Canada. The firm specializes in student benefits advisory including: consulting services, communication services, customer service support and administrative services to student groups in connection with health and dental benefits.
About Groupworks Financial Corp.
Groupworks Financial Corp. is a leading consolidator of independent employee benefits and pension advisory practices in Canada whose objective is to become a national benefits and pension advisory and administration organization. The Company has been providing superior customer service and solutions-based benefits and pension consulting to Canadian businesses for over 25 years.
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. 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.
FOR FURTHER INFORMATION PLEASE CONTACT:
Groupworks Financial Corp.
(905) 470-6588 ext. 211
Groupworks Financial Corp.
(905) 470-6723 (FAX)