Alternative Business Structure (ABS) Quindell has entered negotiations to sell one of its operating divisions to Australian law firm Slater & Gordon.
Quindell, which owns a range of legal businesses, confirmed in a statement ‘it entered into exclusivity arrangements in respect of the possible disposal’ and confirmed the third party they were in talks with was Slater & Gordon. The operating division is understood to be its legal services arm.
At the end of the first half of 2014, Quindell’s legal services division – which trades under several names including The Compensation Lawyers and Compass Law – brought in £179.6m at the end of the first half of 2014 – 139% up on H1 2013.
The division’s earnings before interest, tax, depreciation and amortisation (EBITDA) grew an enormous 223% to £101m from £31.2m for the same period – more than three times the figure last year. The number of cases also increased considerably from 33,400 to 82,350, up by 146.5%, while gross sales rose by 135.7% from £79.1m to £186.5m.
Despite the substantial increase in revenues in its legal services division this summer, Quindell brought in PwC to carry out an independent review on the company’s accounting policies at the end of 2014.
The move would be beneficial for Slater & Gordon, which last summer said it looks to grow a further 8% in the UK in 2015. Its UK revenues came in at £100m (A$182.5m) for the 2013/14 financial year due to multiple acquisitions in 2014 including specialist PIL firm Nowicki Carbone and Queensland consumer law practice Schultz Toomey O’Brien with a combined estimated annual fee revenue of A$39m.
Quindell gained its ABS licence from the Solicitors Regulation Authority in December 2012, which saw the company acquire three law firms Silverbeck Rymer, Pinto Potts and The Compensation Lawyers and has since added further brands.