The firm announced this morning that the SRA has cleared its ABS application, with LDC, which is part of the Lloyds Banking Group, about to take a minority 22.5 per cent shareholding in the business.
The deal will be formally signed off next week, bringing forward the Bolton-based firm’s plans after it initially indicated an early 2013 target date (17 September 2012).
LDC, which has a portfolio valued at £2bn, saw off Bowmark Capital to link up with Keoghs in a move that the firm says will give it the capital for strategic acquisitions as well as the spending power to add “complementary services and scale”. Keoghs said it also plans to invest in people, processes and technology infrastructure.
The 1,200-staff firm has offices in Bolton, Manchester and Coventry. It acts for more than 60 insurers, government and public sector bodies, and large corporates, handling around 40,000 claims a year.
According to The Lawyer’s estimates for 2011-12, Keoghs pulled in £47.5m in turnover – up by 15 per cent on the previous 12 months.
Following today’s announcement, the firm said it can accelerate its expansion and development of its business.
The firm’s chief executive John Whittle said: “This is an important stage in our development. Securing the support of a long-term investor like LDC enables us to accelerate our growth strategy and invest significantly for the benefit of our clients, ensuring we’re able to meet the sector’s complex, evolving requirements and improve outcomes.”
John Garner, director of LDC, added: “Keoghs occupies a position of real strength in the defendant insurance sector, with a well-earned reputation for quality and cost-effective service.
“We’re excited about the opportunity to support the firm’s continued expansion and development as an ABS in an evolving and growing market.”
The Lawyer revealed earlier this year that the firm was in exclusive ABS talks with private equity firm Bowmark Capital about taking external investment (28 April 2012).
Meanwhile, Irwin Mitchell has announced the completion of its purchase of PDP Management Services, a field agency and arrears management company (12 October 2012). The firm said it believes the deal to be the first acquisition made by an ABS.
The acquisition has now been given SRA approval, but will need a further ABS licence, following the confirmation in August of Irwin Mitchell’s five licences for its group structure (20 August 2012).