PRIVATE EQUITY firm Duke Street has become the first investment house to take a stake in the UK’s legal sector, buying a majority stake in Parabis Group – the parent company of two insurance litigation firms.
Duke Street’s investment, which means it owns just over 50 per cent of Parabis, values the company at £150m-£200m.
Parabis, which trades through companies including Cogent Law and Plexus Law, applied for alternative business structure (ABS) status when investment in the legal sector was liberalised through the Legal Services Act 2007, which came into force last year.
Duke Street has been widely expected to make an investment in the legal sector since the Act was first proposed.
The private equity house’s operating partner, Paul Lester, will become chairman of the Parabis Group on completion of the deal, which is expected to be approved by the Solicitors’ Regulatory Authority (SRA) by the end of March.
He will be joined on the board by ex-Aviva chief executive Bob Scott, another Duke Street operating partner, with the current Parabis management – chief executive Tim Oliver and commercial director Tim Roberts – remaining at the firm.
The £50m investment, which is part funded by a consortium of banks including RBS, Lloyds, Santander and Ares, will primarily be used for acquisitions, the firms said yesterday.
The SRA revealed yesterday that since it started accepting applications for firms to register as ABS, it has received more than 100 requests from firms looking to be licensed.
“The number of applications is very interesting and encouraging,” said SRA chief executive Antony Townsend. “I was on record at the end of last year as saying that we expected much lower numbers of applications.”
MEET THE ADVISERS
TIM WRIGHT
SJ BERWIN
SJ Berwin private equity partner Tim Wright is advising Duke Street on its investment in Parabis Group, building on a long-standing client relationship with the investment house.
Wright has previously assisted Duke Street on its leveraged buyout of Burton’s Food, its £76.9m offer for British dentistry operator Oasis Healthcare and its secondary buyout of The Original Factory Shop.
He also advised Duke Street on its sale of pension and employment benefit group Xafinity to Advent International in 2010.
The bank consortium that provided funding for the deal was advised by Stuart Brinkworth, an ex-SJ Berwin partner who joined Hogan Lovells in 2010.
Brinkworth has previously advised the banks in relation to Exponent’s £121m purchase of the BBC Magazine business, including the acquisition of the Radio Times.
