Liverpool law firm set for £19m takeover in Legal Services Act first

Liverpool’s Silverbeck Rymer is set to be acquired by software and outsourcing firm Quindell Portfolio in one of the first takeovers of a law firm under the Legal Services Act, reports Post.

The deal, which requires approval by the Solicitors Regulation Authority (SRA), will create a combined insurance claims outsourcing operation.

The proposed acquisition, which values the personal injury specialist law firm at £19.3m, involves £10.25m in cash and the issue of up to 120.8 million Quindell shares at 7.5p per share.

Silverbeck will be combined with Quindell’s claims and ‘Mobile Doctors’ businesses to provide a joint outsourcing offering to the UK insurance claims market.

Silverbeck, which posted profits before tax of approximately £6m for the 2010-11 financial year, already provides business to Quindell’s insurance outsourcing operations.

The acquisition will be one of the first instances in the UK of a legal practice being acquired by a quoted plc and will require approval from the SRA. This is expected to take a number of months, so Silverbeck has granted Quindell the exclusive right to acquire it until 31 December 2012, even in the event that a higher valued bid is received, to allow time for the process to complete.

Silverbeck Rymer chairman Jim Rymer said: “We see significant benefits in being part of the enlarged group. Quindell has a rapidly growing presence in the insurance space and we firmly believe in its non-conflict approach to working with insurers.”

Rob Terry, chairman and chief executive of Quindell said: “We are delighted to have reached an agreement, which represents a significant opportunity for everyone involved. Quindell will provide Silverbeck Rymer with the opportunity to grow through giving access to the group’s industry contacts and technology expertise, whilst partners and shareholders can share in the benefits of participating as holders of Quindell’s equity.

“Silverbeck Rymer is a robust business and performs well in its own right; however, the combination of Quindell, Silverbeck Rymer and Mobile Doctors together represents a significant opportunity for us to address the issues faced by the insurance industry within one of its three key areas of claims leakage – personal injury.”

The takeover, the first of its kind under the new Legal Services Act regime, comes after a similar deal in 2001 which saw the £7m acquisition of West End music specialist law firm Statham Gill Davies by AIM-listed business services group Tenon.

The ground-breaking deal saw all the law firm’s non-contentious lawyers join Tenon as paid employees. Due to Law Society rules, Statham Gill was required to hive off its litigation department to run as a separate, unrelated business taking certain administrative services from Tenon under a service agreement.

Post is a sister title of Legal Week.

For more on the Tenon deal, see Tenon buys Mayfair law firm in UK first and Who wants to be a millionaire?