Δείτε εδώ την ειδική έκδοση

Quindell to shuffle board after unit sold to Slater & Gordon

British insurance claims processor Quindell announced a shake-up of its board after it confirmed it was selling its professional services arm to Slater & Gordon, the Australia-listed law firm, for about £700m.

Robert Fielding, Quindell's chief executive, will move to the Australian company should the sale complete, Four other directors, Laurence Moorse, Robert Bright, Robert Burrow and Vice Admiral Robert Cooling, will resign upon or shortly after completion.

David Currie, the interim non-executive chairman, will become a non-executive director, being replaced by Richard Rose, and Jim Sutcliffe, a consultant, will no longer join the board.

Slater & Gordon said it would pay an upfront consideration of £637m for the division and an earn-out based on the performance of the professional services division's legacy noise-induced hearing loss cases.

Quindell said in a separate statement that there were approximately 53,000 of these cases.

The London-listed company said it expected to return £500m of the proceeds from the sale to shareholders. Its share price was up 25 per cent at 172p shortly after London trading started.

Mr Currie said the deal was "an important landmark for Quindell, delivering significant value for investors from part of our business".

"We are confident that this transaction, our clear strategy and the actions we are taking will enable us to move forward with renewed purpose," he added.

The deal marks a recovery for Quindell, which some market participants had suggested was running out of cash late last year when it commissioned PwC to investigate its weaker than expected financial results. Its market capitalisation was £609m on Friday, compared with a peak of more than £2bn a year ago.

Quindell said on Monday that PwC had identified "certain of the accounting policies" adopted by the company were "largely acceptable but were at the aggressive end of acceptable practice". As a result, the company said it would adopt "more conservative policies" for the year ended December 31 2014.

Andrew Grech, Slater & Gordon's managing director, said the acquisition "is a transformational opportunity, and will allow Slater and Gordon to further penetrate the highly fragmented £2.5bn UK personal injury market".

The Australian company said on Monday it would raise A$890m (US$688m) in fresh equity to fund the acquisition and would fund the balance of the deal with bank debt.

The combination creates the number one personal injury law group in the UK, Mr Grech added.

Slater & Gordon, one of the world's first publicly traded law firms, has been expanding aggressively in the UK, mostly handling "no win, no fee" personal injury claims. In its home territory, it has a record of bringing class actions. The UK accounted for nearly half its A$418m revenues last year and its market capitalisation on Friday was £795m.

Quindell's board has recommended shareholders vote in favour of the deal, which is expected to close in May, conditional on a majority vote of approval.

Slater & Gordon said it had already secured irrevocable commitments representing 15 per cent of Quindell's issued share capital.

Quindell's professional services division - which mainly handles the legal and other aspects of car insurance claims - accounts for almost 90 per cent of its revenues and profits. Slater & Gordon's acquisition values the unit at about seven times its earnings before interest, depreciation, taxation and amortisation.

Quindell said that after the sale the company would consist of a "range of technology businesses", including insurance claims management systems and an insurance brokerage.

Quindell's overall valuation has still fallen since a short selling attack led by Gotham City Research a year ago.

Gotham published a dossier of allegations about its profitability and corporate governance. The Aim-quoted company became a cautionary tale for London's junior stock market, becoming entangled in various scrapes including a misdescription of a directors' share sale as a purchase.

Its joint broker Canaccord Genuity and its public relations adviser Redleaf Polhill both resigned last year.

Quindell's shares have recovered in recent months, after it disclosed in January that it had entered into negotiations with Slater & Gordon over the sale of its legal services division, although they remain sharply lower than a year ago.

The group's founder Rob Terry is unlikely to benefit greatly from the deal, having reduced his shareholding below the disclosable threshold of 3 per cent following his ousting as chief executive late last year.

The professional services unit had revenues of £177m in the three months to September 2014.

Quindell's other division, "digital solutions", provides black boxes for use by motor insurers.

Citi and Greenhill advised Slater & Gordon, with Rothschild acting for Quindell.

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation

ΣΧΟΛΙΑ ΧΡΗΣΤΩΝ

blog comments powered by Disqus
v