Having entered the legal services market in 2014 by buying Simpson Millar, Eversheds-client Fairpoint group has added a second law firm to its holdings with the acquisition of Colemans-ctts for £9m.
The consumer-focused Colemans, which has 67 fee earners, particularly covers volume personal injury, conveyancing and travel law and owns CT Support Services and Holiday TravelWatch – fitting alongside the similarly-focused Simpson Millar with Fairpoint hoping to take advantage of economies of scale.
For the 2014/15 financial year Colemans generated revenues of £19m with pre-tax profits of £2.3m. The firm will be integrated with Simpson Millar with senior management at the firm brought into Fairpoint’s legal services team.
The £9m being paid by Fairpoint is split into a cash payment of £8m plus a further £1m issued in shares. There is also an extra £7m that will be paid out, depending on the success of the purchase, over the next two years with 50% in cash and 50% in shares.
Colemans, which had assets worth £18.4m and offices in Manchester, Kingston and Acton, is being acquired on a cash free/debt free basis. Fairpoint is using existing resources to fund the purchase that is expected to complete on 14 August and will see legal services, on a pro forma basis, make up 62% of Fairpoint’s revenues.
Colemans’ managing partner, Janet Tilley, said: ‘We share Fairpoint’s vision of a rapidly evolving consumer legal services market and are pleased that this has presented the opportunity for Colemans to become part of a larger and dynamic group, leading the transformation of this industry segment. We expect to take advantage of being part of a larger platform with a strong focus on process. We are delighted to become part of the Fairpoint Group and to join forces with Simpson Millar.’
Fairpoint’s chief executive, Chris Moat, added: ‘The acquisition of Colemans is an important step in the development of the Group’s fast growing legal services platform. It brings particular class leading expertise in the areas of volume personal injury, conveyancing and travel services and gives strong impetus to our agenda of reshaping the Group towards a broader professional services organisation.’
Fairpoint was advised on the deal by Eversheds with a team led by Alistair Cree and including employment partner Naeema Choudry.
Quindell, which made a similar play in the UK legal services market by conglomerating consumer-focused legal brands, recently sold its legal services division to Slater & Gordon in a £637m deal.