Listed company buys PI firm in bid to create ABS
Personal injury firm Silverbeck Rymer is to be sold to a listed company in a £19.31m deal to create an alternative business structure (ABS).
Quindell Portfolio Plc will partner Silverbeck in providing personal injury services to the UK insurance-claim market.
Quindell, an AIM-listed “brand extension” company, announced this week that it intends to purchase Silverbeck for £10.25m cash and the issue of 120.8 million Quindell shares (at a value of £0.075 per new Quindell share). Quindell also owns medical expert witness group Mobile Doctors.
The sale is the first example of a Plc buying a law firm under the new ABS rules, and is subject to Solicitors Regulation Authority approval. Clearance is expected to take a number of months and Quindell has exclusive rights to purchase Silverbeck until 31 December 2012.
In the year to 30 April 2010, Silverbeck reported pre-tax profits of £6m, and its most recent management accounts show net assets of £8m.
Legal strategy consultant Stephen Mayson says more personal injury firms are likely to follow suit.
“It’s a very clear indication of the sort of move that the market is going to see, moving forward,” he says.
“The clear trend in the personal injury market has been towards larger and more efficient firms, and being able to finance the investment that lies behind it is a challenge for lots of law firms, so being able to attract this sort of investment is a way to do that. I think there will be consolidation in that market with larger firms but that doesn’t mean all smaller firms are going to disappear—they may find it harder to compete.”
Jim Rymer, chairman of Silverbeck Rymer says: “Quindell has a rapidly growing presence in the insurance space and we firmly believe in its non-conflict approach to working with insurers.
“Its positioning as thought leader and belief in improving margins while lowering costs for the industry sits well with our philosophies of working alongside insurers to help combat fraud and other areas of cost escalation.”
A Solicitors Regulation Authority spokesperson said it had received 80 expressions of interest in ABS, and the majority of these are now working through the stage-two bespoke application process.
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