A frenetic flurry of announcements from Quindell Portfolio show how many plates the buy and build insurance BPS provider is spinning as it gears up for legislative changes in 2013.
Quindell made its fourth equity raise (see Quindell raises another £20m, and work back), this time for £17m, which it said maintains its £80m of available working capital. It is also making its third and fourth legal services acquisitions, of ‘no-win, no fee’ lawyers Abstract Legal Holdings (ALH), and The Compensation Lawyers (TCL), adding to its other acquisitions of Silverbeck Rymer and Pinto Potts Solicitors (see here and work back). However regulatory approval is still pending.
ALH is the parent company of Accident Advice Helpline (AAH) self-styled ‘leading ethical online consumer brand providing access to justice for victims of non-fault accidents’, which has consumer champion Esther Rantzen as its ambassador. TCL is a channel partner for AAH employing 90 people. Quindell has already been working with AAH’s insurance panel via Silverbeck Rymer, and using its ICE Challenger technology platform, so they have some experience working together.
Quindell has paid a non-refundable deposit of £19.75m in cash and shares for AAH, and will pay a further 267.8m shares (c£46m at yesterday’s price) to complete the deal on or after 2nd April 2013, and subject to regulatory approval. The total price is 3.2x ALH’s revenue of £20m. Quindell said the deal will be ‘significantly and immediately earnings enhancing’ since it will be performing the legal, medical and rehabilitation services for ALH’s end customers. Smaller of the two, TCL is being satisfied with a cash and shares deal worth c£400k.
Quindell also announced it had ‘converted’ a number of previously announced outsourcing/partnership pilots, which once successfully implemented during 2013, should generate run-rate revenues of over £80m per annum, with the majority of contracts being 3 to 5 years. Quindell is working on a number of other pilots that are already delivering c£40m in revenue, but could reach £100m p.a. once converted. It said these contracts could double combined per annum run rate revenues by the end of 2014, and generate total revenues of over £1.5bn in the period over five years.
It’s hard not to be a little alarmed by the rate of activity here, or indeed the projected numbers Quindell is prepared to put out there. It needs to be careful not to over-egg the pudding.