ABS pioneer Parabis Group has been broken up and sold off as part of a pre-pack company administration.
In a statement released this afternoon, the company confirmed the deal will save more than 2,000 jobs in more than 20 offices across the UK.
Parabis was one of the first alternative business structures to attract private equity investment, in 2012. Owner Duke Street confirmed earlier this year that it has written down a £21m investment in the company.
Parabis then confirmed that a consortium of private individuals, led by the company’s founder Andrew McDougall, was in exclusive talks to buy defendant personal injury firm Plexus Law.
Plexus Law Limited, led by one of the Parabis founders Andrew McDougall, will purchase the defendant businesses formerly known as Plexus Law and Greenwoods, as well as consumer law division of Cogent Law and claims management vehicle Parabis Claims Solutions.
Trading under the Plexus Law brand, the insurance firm will employ more than 1,000 people. As well as McDougall, who will be chief executive, former Parabis directors Tim Roberts, Hilary Yeo and Nick Addyman will also take on management roles.
National firm Lyons Davidson will purchase some of the claimant division of Cogent Law and the Parabis joint venture with Saga Law. The remainder of the Cogent Law business is being sold to Merseyside firm Carpenters Law.
The rehabilitation and medical legal reporting division, formerly trading as Argent Rehabilitation, will be sold to Premex Services Limited.
Sky News has reported that the sales would raise around £50m in total and go some way to clearing the group’s debts, estimated at £70m.
Peter Saville, Ben Browne and Anne O’Keefe, of business-advisory firm AlixPartners Services UK LLP (AlixPartners), were today appointed joint administrators over the entities.
Saville said: 'The group has been in discussions with its lenders and private equity backer for a prolonged period with a view to restructuring what is a complex business operating in an increasingly challenging legislative environment.
'Despite the receipt of further support from its financial stakeholders, the group was unable to resolve its cash flow issues and sought to market itself for sale.
'As a result of that marketing process it became apparent that in the current environment a sale of the group as a whole was not a viable option and the liabilities attached to group entities also precluded a solvent sale.'
According to Parabis accounts filed last December, income fell from £12.1m to £8.9m the year to 31 March 2014, with profits down from £8.5m to £5.1m.