Providence Service Corporation Agrees to Acquire Ingeus Limited

       Providence Service Corporation Agrees to Acquire Ingeus Limited

PR Newswire

TUCSON, Ariz., March 31, 2014

TUCSON, Ariz., March 31, 2014 /PRNewswire/ -- The Providence Service
Corporation (Nasdaq: PRSC), a leader in the management and provision of human
social services and non-emergency transportation through a variety of
government-sponsored programs, announced today that it has entered into an
agreement to acquire Ingeus Limited. Australia-based Ingeus has operations in
10 countries and four continents and is recognized as a pre-eminent
distributed workforce development company and market leader in outsourced
employability programs, operating in the social improvement, employment and
welfare services markets. The acquisition expands Providence's footprint into
new markets, diversifies its customer base, and enhances its workforce
development expertise.

Providence Service Corporation logo

Providence will acquire 100% of Ingeus for GBP £35 million (USD $58 million
based on GBP/USD exchange rate of 1.6544 as of March 27, 2014) in cash payable
at closing and restricted stock and cash with a combined value of GBP
£14,345,794 (USD $23.7 million) subject to a vesting schedule of four years.
To the extent certain thresholds and performance hurdles are met during the
five-year period following closing of the transaction, Providence could also
pay up to GBP £75 million (USD $124 million) in the form of contingent
earn-out payments. The transaction is anticipated to be accretive to earnings
per share in 2014 and is expected to close in the second quarter of 2014,
subject to customary regulatory approvals and closing conditions. 

Ingeus generated revenue and adjusted EBITDA for the twelve months ended
December 31, 2013 of GBP £209 million, or USD $345 million, and GBP £34
million, or USD $56 million (based on AUD/GBP exchange rate of 0.5562 and
AUD/USD exchange rate of 0.9202 as of March 27, 2014), respectively. Revenue
and adjusted EBITDA have grown at compounded annual growth rates of 26.6% and
18.7% over the last three years, respectively. In 2013 Ingeus generated over
70% of its revenue in the United Kingdom, with the majority of other revenue
coming from France and Saudi Arabia.

"Ingeus is a good match for Providence, with strong management, deep client
relationships and a proven track record of delivering high-quality services,"
said Providence CEO Warren Rustand. "Ingeus complements our existing
businesses, both strategically and culturally, and shares our core values,
focus on integrity, and commitment to customer-centered care through
innovation. Importantly, because there is no overlap of current clients,
there will be significant opportunity for sharing of expertise."

"We welcome a talented Ingeus team to Providence, and look forward to helping
them continue to build upon their success," said Providence Chairman Chris
Shackelton. "From a financial perspective, this transaction exceeds the high
standards we set for acquisitions and should create substantial value over the
coming years. With the upfront consideration representing less than 40% of
the total potential acquisition cost and the remaining consideration tied to
performance thresholds, we are confident we have aligned incentives towards
generating cash flow and value for our shareholders. Given Providence's
strong balance sheet and free cash flow generation, this transaction should
not limit our capacity to pursue additional opportunities that meet our
strategic criteria and enhance long-term shareholder value."

"We couldn't be more excited about joining the Providence platform," said
Ingeus founder and Managing Director Therese Rein. "I am delighted to have
found a partner that shares our commitment to excellence with integrity.
Ingeus has an ongoing commitment to expanding our operations so as to assist
more people to realize their potential. Providence will provide the financial
underpinning and complementary knowhow which will enable us to fully achieve
our goals. We expect the scale and collective capabilities of the combined
businesses will enhance our service delivery and open doors for winning new
business."

Rustand continued, "This transaction will provide compelling long-term
opportunities both internationally and domestically. Over time, it will
increase Ingeus' service capabilities in the United Kingdom and its other
markets, while also expanding Providence's capabilities in the United States
and Canada. As part of Providence, Ingeus will be better positioned to
compete for government contracts and continue its track record of expanding
into new markets. Furthermore, it benefits Providence by providing a
foundation for entering complementary business lines."

The Ingeus management team will be joining Providence and will continue to run
the company's operations, bringing extensive experience in global government
services to the Providence platform and a proven history of successful
delivery. Ingeus' founder, Therese Rein, will continue to lead the business
and will report directly to Providence's Chief Executive Officer, Warren
Rustand.

Wells Fargo Securities served as exclusive financial advisor and Sheppard,
Mullin, Richter & Hampton LLP and Paul Hastings LLP served as legal counsel to
Providence in connection with the transaction. Investec served as exclusive
financial advisor and Herbert Smith Freehills LLP served as legal counsel to
Ingeus.

Conference Call

Providence will host a conference call Tuesday, April 1, 2014 at 9:00 a.m. EDT
(6:00a.m. PDT/MST) to discuss the details of the Ingeus acquisition.
Interested parties are invited to listen to the call live over the internet
at http:///investor.provcorp.com. The call is also available by dialing (800)
299-8538 (USA) or (617) 786-2902 (non-USA) and by using the passcode 10902288.
A replay of the teleconference will be available on
http://investor.provcorp.com. A replay will also be available until April 8,
2014 by dialing (888) 286-8010 or (617) 801-6888 and using passcode 88486288.

About Providence Service Corporation

Providence is a Tucson, Arizona-based company that provides and manages
government sponsored human services and non-emergency transportation services.
It offers: (1) non-emergency transportation management services to state
Medicaid programs, local government agencies, hospital systems, health
maintenance organizations, private managed care organizations and commercial
insurers, as well as to individuals with limited mobility, people with limited
means of transportation, people with disabilities and Medicaid members (2)
home- and community-based counseling services, which include home-based and
intensive home-based counseling, workforce development, substance abuse
treatment services, school support services and correctional services; (3)
foster care and therapeutic foster care services; (4) not-for-profit managed
services comprising administrative support, information technology and
accounting and payroll services; and (5) case management, referral and
monitoring services. Providence is unique in that it provides and manages its
human services primarily in the client's own home or in community based
settings, rather than in hospitals or treatment facilities and provides its
non-emergency transportation services through local transportation providers
rather than an owned fleet of vehicles. The Company provides a range of
services through its direct entities to approximately 56,300 clients, with
approximately 15.8 million individuals eligible to receive the Company's
non-emergency transportation services.

About Ingeus Limited

Established in 1989, Ingeus is a Brisbane, Australia-based provider of
back-to-work and health and well-being services to long-term unemployed
people, people with disabilities/health conditions, single parents, young
people, mature aged people/workers and refugees and migrants in Australia, the
United Kingdom, France, Germany, Sweden, South Korea, Switzerland, Poland,
Saudi Arabia and New Zealand. It offers increasing participation services,
such as eliminating vulnerability, creating employment, advocating diverse and
flexible workplaces, strategies for the aging population, decent lasting jobs
in the emerging green industry, career progression and advancement and
intervention to prevent the risk of long-term unemployment. The company also
provides enhancing well-being services, including assisting people to remain
in or return to work, building resilience, fostering safe and healthy
workplaces, helping governments and employers to address workplace absenteeism
and working alongside employment advisors to ensure that the holistic needs of
individuals are met to work with conditionality. Further, the company provides
services for skills and lifelong learning, including skills for the most
disadvantaged, understanding skills in demand, practical earning and learning,
career counseling and organizational development. Ingeus is a market leader in
the UK Department of Work and Pensions' Work Programme, a pioneer of the
employment services market in France, a market leader for both employment and
outplacement services in South Korea and the first entrant and a market leader
across employment services programs in Saudi Arabia. The company employs
staff in excess of 2,500 across more than 160 delivery sites throughout 10
countries.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Words such as "believe,"
"demonstrate," "expect," "estimate," "forecast," "anticipate," "should" and
"likely" and similar expressions identify forward-looking statements. In
addition, statements that are not historical should also be considered
forward-looking statements. Readers are cautioned not to place undue reliance
on those forward-looking statements, which speak only as of the date the
statement was made. Such forward-looking statements are based on current
expectations that involve a number of known and unknown risks, uncertainties
and other factors which may cause actual events to be materially different
from those expressed or implied by such forward-looking statements. These
factors include, but are not limited to the global credit crisis, capital
market conditions, the implementation of the healthcare reform law, state
budget changes and legislation and other risks detailed in Providence's
filings with the Securities and Exchange Commission, including its Annual
Report on Form 10-K for the fiscal year ended December 31, 2013. Providence is
under no obligation to (and expressly disclaims any such obligation to) update
any of the information in this press release if any forward-looking statement
later turns out to be inaccurate whether as a result of new information,
future events or otherwise.

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SOURCE The Providence Service Corporation

Website: http://www.provcorp.com
Contact: Company, Robert Wilson - Chief Financial Officer, 520/747-6600; or at
Cameron Associates, Alison Ziegler 212/554-5469; or Media, Elliot Sloane/Dan
Zacchei - Sloane & Company, 212/486-9500
 
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