DAC and Beachcroft moot £175m merger

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  • margins of 18 and 19% makes them very vulnerable to increases in costs....

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  • Not quite as risky as the Clyde BLG merger, but still there will be fallout. Both firms have seen profit margins squeezed, now they are looking for safety in numbers.

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  • So, last year was all about transatlantic mergers, this one's all about domestic insurance. And next year? Law firm IPOs. Beachcroft Plc?

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  • two average firms merging just makes a larger average firm

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  • I don't think they are average firms just victims of circumstance. In this insurance sector where profit margins are falling rapidly lawyers have to be innovative to stay ahead. Beachcroft has a steady management and so does DAC, together they will make a strong team and give some of those smaller firms in the same sector something to think about.

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  • This looks like a pretty sensible response to a consolidating market. It will be imperative for Clydes and BLG to pull their merger off now and even more of an imperative for Kennedys and Holman Fenwick to bulk up. In five years there will be four major insurance brands. Any firms currently turning over less than £50m will need to work fast to secure the best merger partners.

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  • What is going on with Kennedys? Has it not overstretched itself? Surely bolt ons and mergers is the way forward,

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  • So the new firm will have 210 Partners for £175m of turnover. That explains why they are not merging with Plexus which has 50 Partners for £70m of turnover. Next....

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  • It looks like the music has stopped and Kennedys do not have a chair to sit on. Perhaps the US is their only option. As for RPC, they look increasingly irrelevant.

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  • A quality firm like RPC will benefit from this - if these mergers go ahead two of its traditional competitors in BLG and DAC will have been taken out of the market, and the mergers will create conflict issues too.

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