Bolton firm Keoghs is on track for an imminent acquisition of Plexus Law, The Lawyer understands.
A petition to wind up the business of Plexus, which is a trading entity of Parabis Law, was initially filed on 9 October. The petition was due to be heard at the Companies Court on 16 October but was subsequently withdrawn. It is understood the petition was not filed by Parabis or Plexus itself.
A Plexus spokesperson said: “This was a standard business dispute and not a noteworthy event. The dispute was resolved to both parties’ satisfaction and the petition was withdrawn.”
Plexus was unable to provide any further details of the nature of the dispute but since the petition was withdrawn Keoghs confirmed it is in talks with Parabis Group “regarding the acquisition of some of the business”.
Parabis has drafted in business advisory firm AlixPartners to restructure its business ahead of the Plexus sale.
Rumours have been circulating the market since August that Keoghs and Plexus were involved in merger talks, which would create a £145m business with a headcount of around 2,400 people.
Both firms have converted to an ABS and used the structure to receive financial backing from private investors. Keoghs adopted the structure in 2012 and used it to received investment from private equity company LDC. The investment house, which is owned by the Lloyds Banking Group, took a minority stake in the business worth 22.5 per cent of the shareholding.
Duke Street was the first private equity investor to enter the legal market in 2012 when the new ABS rules came into force, investing in Parabis. The deal was initially delayed because the Solicitors Regulation Authority struggled to cope with the high number of applications following the implementation of the Legal Services Act.
However, two years after Duke Street’s initial investment it injected a further £13m into Plexus last year. The funds were earmarked to update Plexus’ infrastructure through improving its property, technology and hiring.
Plexus has seen a fall out of lawyers in recent months including a team of 13 travel lawyers which left the firm to join Kennedys. The team included former senior partner and head of travel Claire Mulligan as well as partner Justin Collins. Mulligan took up a role as Kennedys’ head of travel and took 11 senior associates and solicitors with her to the insurance specialists.
Plexus merged with Greenwoods in 2013/14 to create a £90m firm. However, following the tie-up Plexus closed its office in Bristol, which previously belonged to Greenwoods. Following the merger two teams of former Greenwoods lawyers left Plexus to join DWF.
In May Plexus launched its second redundancy consultation in under a year. The consultation was expected to affect 80 legal secretaries and support staff and 10 lawyers. The redundancies followed news that Plexus was planning to outsource its business support service and high-volume, low-value claims work to Parabis’ office in South Africa.