Australia’s Shine Lawyers eyes UK acquisition

Newly-listed Australian personal injury firm Shine Lawyers has set plans to expand into UK through acquisition, following in the footsteps of its listed rival Slater & Gordon.

Queensland-based Shine Lawyers currently has over 650 staff, including 150 lawyers, in 30 offices across four states in Australia. The incorporated legal practice listed on the Australian Securities Exchange in May 2013 through its A$45m IPO (£27.2m), valuing the firm at A$155m.

In its IPO prospectus, Shine indicated that it would continue to assess the acquisition of damages-based plaintiff litigation firms within Australia and will also explore international opportunities.

The firm’s managing director Simon Morrison told The Lawyer that the UK is the market the firm will look at first for its international expansion.

“With a population of 22m, Australia is a small market. We want to look to other markets for further growth. The UK is the birthplace of common law and it is a market that’s more compatible with Australia,” said Morrison.

He added that the firm has been exploring the feasibility of entering the UK legal market since 2000 through actively recruiting lawyers to Australia from the UK.

He also noted that the UK expansion of its competitor Slater & Gordon (7 May 2013) signals opportunities for Australian specialist plaintiff litigation firms.

“We have been looking at the market for the past few years and has done due diligence on a number of firms. But at the moment we don’t have a time frame for the entry and haven’t decided on a target yet,” Morrison said.

Since its foundation in 1976, Shine has acquired more than 20 smaller firms. Its domestic acquisition criteria include ease of business model integration, value of WIP, profitability and cashflow, geographic location, track record and synergistic opportunities. Recent acquisitions have been funded through Shine’s existing debt facility. Shine has several corporate facilities with the Commonwealth Bank of Australia with a combined limit of A$31.5m.

With its previous acquisition experience and its established systems and processes, combined with the proceeds raised from the IPO, the firm hopes to replicate its success overseas.

In addition to the UK, the firm has also established ties with the US legal market. The firm has recently launched a video advertisement featuring high-profile environmental advocate Erin Brockovich, with whom Shine has a 10-year alliance agreement running until 2020. Through its alliance with Brockovich, the firm receives referrals and other opportunities from the US for class actions, environmental cases and other strategic initiatives in Australia.

As stated in its IPO prospectus, Shine’s forecasted turnover for the 2012/13 financial year, ending 30 June, is A$102m, up by 19 per cent from the A$85.5m in the previous year, and its net profit is expected to reach A$17.3m, increasing by 11 per cent from A$15.5m.

Shine’s strategy is to focus on damages based plaintiff litigation, particularly personal injury claims, and not become a full service law firm. In recent years, it has broadened its services to include professional negligence, human rights and environmental cases. These new practice areas are forecast to represent approximately 12 per cent of its revenue in 2012/13.

The firm instructed Brisbane-based McCullough Robertson as its legal advisor in the IPO, and paid A$335,000 in respect of the legal services provided by the advisor.