Quindell adds £14m Compass Costs to NW portfolio

LEGAL, insurance and telecoms outsourcing group Quindell Portfolio has made its fourth North West acquisition in the last two years.

In an all-share £14m deal the AIM-listed company is buying Prescot-based legal costs consultancy and costs drafting firm Compass Cost Consultants.

The deal follows the purchase of Liverpool based Intelligent Claims Management and law firm Silverbeck Rymer, and Blackpool’s AI Claims.
 
The terms of the latest deal have been satisfied by the issue of 80 million Quindell shares representing approximately 2% of the Hampshire-based group’s shares.

The shares are subject to lock in of between 12 and 36 months from the date of issue.

As already one of the largest costs practice in the UK with 100 people in Prescot , Compass Costs operates across a broad range of legal case types, specialising in high value and clinical negligence costs recovery, as well as personal injury costs recovery and litigation.

Compass will operate as a division within Quindell Legal Services.

Rob Terry, chairman and chief executive of Quindell said: “Compass Costs is already one of the UK’s largest cost draftsmen, but with the benefit of our volume, it becomes the largest.

“Its operation is well respected in the industry for delivering value to its clients, and is both ethical and market leading in its approach. The acquisition has been completed in line with our stated strategy of only issuing stock at a premium to current market valuation and it is expected to be earnings enhancing in the current year and significantly earnings enhancing in 2014.

“Compass Costs operates in such a specialist area, that we could not expect to grow ourselves organically in such a short period of time, particularly as we continue to take on more of our own volume, This, combined with taking into account the proposed Ministry of Justice costs reforms and introduction of LASPO from April 1 2103 were also key drivers towards the acquisition.”

Phil Hodgkinson, chief executive of Compass Costs said:”With our detailed understanding of the legal services market it is clear to the board and shareholders of Compass Costs that Quindell has a winning formula, is gaining significant blue chip clients and has been undervalued by the market.

“As a result, we are very happy to accept our consideration based on shares at 17.5pand look forward to sharing in the benefit of the share price correction that we believe will occur once the Quindell model is more fully understood.”

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