Private equity house Duke Street has acquired a majority stake in the Parabis Group, the parent company of insurance litigation law firms Plexus Law and Cogent Law.

The deal, agreed in December, values Parabis at between £150m and £200m and is subject to approval from the Solicitors Regulation Authority (SRA), which is expected later this month. Under the terms of the deal all assets will be transferred into a new holding company, which will operate as an Alternative Business Structure (ABS) providing both legal and non-legal services.

Duke Street, which has a majority share of just over 50%, intends to keep its investment in the business for up to five years, after which it will consider a number of exit routes.

In the meantime the investment will be used primarily to fund acquisitions. Parabis and Duke Street are already in talks with several law firms with revenues of between £10m-£30m in relation to possible acquisitions, expecting to close at least one deal in 2012.

Parabis, which is expected to generate revenues of around £160m in the year to March 2012, provides personal injury litigation services via its Plexus and Cogent Law arms, and acts for a large number of insurers in the UK.

As well as personal injury litigation, the group also has a number of separate non-legal arms which handle claims management outsourcing, rehabilitation, loss adjusting, and health & safety assessment and audit work.

Parabis Group's combined legal operations, known as Parabis Law, house around 400 lawyers, including 60 partners as well as 600 paralegals. The group worked with the SRA as part of a trial of the new alternative business structures licensing process ahead of last October's implementation of the Legal Services Act.

The Parabis management team, led by chief executive Tim Oliver (pictured) and commercial director Tim Roberts, will remain in their roles, while Duke Street operating partners Paul Lester, former chief executive of VT Group, and Bob Scott, former group CEO of Aviva, will join the Parabis board as non-executive directors. Lester will become chairman of Parabis on the deal's completion.

Duke Street said Parabis stood out as the most attractive platform in the market. Partner Iain Kennedy said: "We went round the market talking to all the major players but Parabis really is the standout firm. No one else had the scale, growth rate and creative management team. They have really been at the forefront of innovation."

"We are already in discussions with other law firms and suppliers to the insurance claims industry about further deals. Parabis has grown revenues by 25% per annum for the last four years and we want to help them continue to grow. For that the business needs strong operational and financial investment."

SJ Berwin took the lead role for Duke Street on the deal with a team led by City corporate partner Tim Wright and corporate finance partner Ed Harris, while Squire Sanders London-based corporate head William Downs acted for Paribas. Hogan Lovells advised the banks – which comprised RBS, Lloyds, Santander and Ares – with a team led by City finance partner Stuart Brinkworth.

Brinkworth told Legal Week: "The deal is interesting because it is the first-ever leveraged buyout of a law firm, the first real private equity investment of size. I think it's fairly unique in that way. Any first-time deal in a sector is always difficult to put together so it was challenging and everyone was very pleased when it got signed."

The news comes after the Legal Services Act, which came into force on 6 October last year, opened up the legal market to outside investment.

Australia's Slater & Gordon, the world's first publicly listed law firm, acquired UK personal injury specialist law firm Russell Jones & Walker in a £53.8m deal,, while Liverpool-based personal injury law firm Silverbeck Rymer was also recently taken over by software and outsourcing firm Quindell Portfolio in a deal valued at £19.3m.