Listed legal entity Quindell Portfolio has announced the acquisition of costs firm Compass Costs in a deal with a paper value of £14m.
The takeover was announced to the AIM stock exchange this morning and was secured through the issue of 80m Quindell shares – around 2% of the value of the business.
The acquisition is the latest in a series of takeovers announced by Quindell since the start of 2012, which includes three personal injury firms, a claims management company and a legal software firm.
Compass Costs, which has more than 100 staff and is headquartered in Liverpool, specialises in high-value and clinical negligence costs recovery, as well as personal injury costs recovery and litigation.
The most recently filed accounts for the firm, for the year to 31 January 2012, showed record turnover of around £6.4m and profit before tax of around £1.3m.
Quindell said it has been working with Compass Costs since October 2012 and that the operational model that will be in place following this acquisition has been running on test since the start of the current year.
Rob Terry, chairman and chief executive of Quindell, said: ‘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 1 April 2103 were also key drivers towards the acquisition.’