AIM-listed Quindell Portfolio is to acquire its second leading claimant personal injury (PI) law firm after reaching agreement to purchase Pinto Potts for around £14m. The deal also extends Quindell’s offering to insurers beyond PI.
Two-office Hampshire firm Pinto Potts will join Liverpool-based Silverbeck Rymer, for which Quindell is still awaiting its alternative business structure (ABS) licence, in Quindell Legal Services Ltd. It forms part of Quindell’s plan to offer insurers an end-to-end outsourced claims service.
In the meantime the pair have reached a partnering agreement to provide a joint outsourcing offering to the insurance claim market, primarily in PI but also in other consumer-related services including wills, probate, and conveyancing.
Pinto Potts has particular recognised expertise in high-value PI claims involving the more complex trauma cases, including head, spine and other serious injuries.
The acquisition is subject to approval from the Solicitors Regulation Authority and the Financial Services Authority. The consideration is £1.5m in cash on completion and a further £1.5m in around a year, together with the issue on completion of 87.5m Quindell shares, which will be subject to lock in arrangements ranging from 12 to 36 months. Quindell’s shares were valued at 12.38p on Friday, making the issue worth around £11m.
In return Pinto Potts has warranted a profit after tax of £2m and operating cash flow of £1.5m for the 12 and a half month period ending 31 August 2013.
Rob Terry, chairman and group chief executive of Quindell, said: “This agreement represents another key step in the building of our combined insurance outsourcing offering. I would like to welcome both David Pinto and David Potts to the group, where I am sure their industry expertise and experience in the sector will prove to be invaluable as we continue to grow our revenues in the personal injury space, and as we look ahead to 2013 and beyond, into other areas including wills and probate to support our broader service offering for the brands we partner.
“With the significant volume of business we already have in pilot, the board has no doubt that this acquisition will be significantly earnings enhancing from completion and will assist with our ability to scale the business to a level of growth beyond our previously stated plans.”