Quindell to buy top claims management company and third law firm for £70m

Injury claims: AAH model will survive April 2013 reforms, says Quindell

AIM-listed Quindell Portfolio has continued its acquisition spree by agreeing to buy leading claims manager Accident Advice Helpline (AAH) for £70m – the first major deal involving a claims management company ahead of the referral fee ban next April – as well as yet another law firm

It is initially an exclusive partnering agreement that means Quindell is now the exclusive provider of all legal services to AAH – which will be a major blow to AAH’s panel firms. One of those firms, The Compensation Lawyers (TCL), is separately being bought by Quindell.

Quindell – which is building an end-to-end outsourcing proposition for insurance companies which it says reduces claims costs significantly – will in turn benefit from “certain revenue and profits of AAH and working with AAH’s existing legal panel members to provide legal services where capacity requires”, according to a statement issued today.

In addition, the pair have entered into an agreement enabling Quindell to acquire Abstract Legal Holdings – AAH’s parent company – on or after 2 April 2013 subject to approval from the Solicitors Regulation Authority and the Financial Services Authority. Quindell is still awaiting its alternative business structure licence after agreeing to buy two law firms: Silverbeck Rymer and Pinto Potts.

Quindell has paid a non-refundable deposit of £19.75 million towards the AAH deal, satisfied by the issue of 28.6m new shares and £15m in cash. The balance of the consideration will be satisfied with the issue on completion of 268m Quindell shares – worth around £49m on the current share price – which will be subject to lock-in arrangements ranging from 12 to 36 months.

In return, Abstract’s owners – Darren Werth, chairman of the Claims Standards Council, and Laurence Beck – have warranted a business plan covering the 24-month period to November 2014. In the year ended 31 May 2012, ALH recorded revenues of around £20m, EBITDA of £5.1m and net assets of £4.7m.

Having become the exclusive provider of all legal services to AAH, Quindell has entered into a separate partnering agreement with TCL – a law firm based in the same north-west London offices as AAH – in providing a joint outsourcing offering to the insurance claims market. Prior to today, the sole source of cases for TCL, which has around 90 staff, had been as one of AAH’s panel firms.

The acquisition will be satisfied by £30,000 in cash and 2.2m Quindell shares – worth £407,000 at the current share price – which will be subject to lock-in arrangements ranging from 12 to 36 months.

Quindell said that AAH – which was established in 2000 – “uses a no-win, no-fee model that is consistent with the models that will survive post the legislative changes due to come into effect in April 2013”.

It continued: “Quindell has already been working as part of the AAH panel through its relationship with Silverbeck Rymer, and during this period has validated the quality of the pack preparation, the level of anti-fraud screening conducted, provided key parts of its ICE Challenger Technology platform and ultimately validated AAH’s overall value to the group.

“Quindell therefore sees working with Accident Advice Helpline as a great opportunity to ensure that those claims submitted directly by the consumer are channelled through a managed and ethical process such as Quindell’s, and in so doing lower the cost of claims for the industry as a whole.

“Furthermore, when combined with the additional revenues that will be earned by the group as a result of the combination of the two businesses, the board is extremely confident that this acquisition will be significantly and immediately earnings enhancing for the group when taking into consideration both the profit of Abstract and the profit that will be made by the group by performing the legal, medical and rehabilitation services its consumers require.”

In order to fund the cash element of the transactions, and reserve existing funds to support organic growth in 2013, Quindell has today raised £17m through placing 97m shares.


Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.


Shocking figures suggest divorce lawyers need to do more for clients

There are so many areas where professional legal advice requires complementary financial planning and one that is too frequently overlooked is on separation or divorce.

Is it time to tune back into radio marketing?

How many people still listen to the radio? More than you might think, it seems. Official figures show that 88% of UK adults tuned in during the last quarter of 2023 for an average of 20.5 hours each week.

Use the tools available to stop doing the work you shouldn’t be doing anyway

We are increasingly taken for granted in the world of Do It Yourself, in which we’re required to do some of the work we have ostensibly paid for, such as in banking, travel and technology

Loading animation