Quindell to buy Accident Advice Helpline

Quindell has agreed a deal to buy no-win, no-fee specialist Accident Advice Helpline (AAH), the brand supported by consumer champion Esther Rantzen.

The acquisition agreement will see Quindell acquire ALH on or after 2 April 2013, subject to approval from the Solicitors Regulation Authority (SRA) and the Financial Services Authority (FSA).

Quindell has also entered into an exclusive partnering agreement with AAH’s parent company, Abstract Legal Holdings, to become the exclusive provider of all legal services to AAH.

Quindell has paid a non-refundable deposit of £19.75m, satisfied by the issue of 28,571,429 new shares and the payment of £14.97m in cash.

The balance of the consideration for the acquisition will be satisfied with the issue on completion of 267,800,000 Quindell shares, which will be subject to lock in arrangements ranging from 12 to 36 months.

In return, the vendors of ALH have warranted a business plan for ALH covering the 24-month period to November 2014. In the year ended 31 May 2012, ALH recorded revenues of circa £20m, EBITDA of about £5.1m and net assets of about £4.7m.

AAH provides access to justice for victims of non-fault accidents under a no-win, no-fee agreement.

The Quindell board said it is “extremely confident” that the acquisition will be “significantly and immediately earnings enhancing for the group.”

Having become the exclusive provider of all legal services to AAH, Quindell has also entered into a separate partnering agreement with The Compensation Lawyers (TCL), to provide a joint outsourcing offering to the UK insurance claims market, primarily in personal injury.

The sole source of cases for TCL, which has circa 90 staff, had been as one of the panel lawyers to ALH.

The agreement enabling Quindell Legal Services to acquire The Compensation Lawyers, which is subject to SRA and the FSA approval, is to be satisfied by the payment of £30,000 in cash and the issue of 2,200,000 Quindell shares, which will be subject to lock-in arrangements ranging from 12 to 36 months.

To fund both deals, Quindell has raised £17m through the placing of 97,142,857 ordinary shares of 1p each at a price of 17.5p.

Quindell chairman and group chief executive Rob Terry, said: “We are extremely excited to be working alongside the team at AAH.

“The addition of a proven, trusted, direct consumer channel to our business model allows us to manage claims from the full range of sources through a managed, ethical supply chain, driving down the cost of claims for the industry.

“I am confident that having such a high profile and respected brand within the Quindell stable will support our broader extension into consumer advice services, and our partnership to date has been greeted with enthusiasm by the insurance brands that we partner with.”