Slaters plans triple buyout while Plexus-Greenwoods tie-up set to create £90m defendant insurance business

Slater & Gordon and Parabis have both unveiled major plans for UK expansion this week, in the latest examples of consolidation in the tightly fought UK personal insurance (PI) market.

Australia-listed Slaters, which last year entered the UK through the £53.8m takeover of Russell Jones & Walker (RJW), is set to continue its push into the market with the proposed A$35.5m (£23.4m) triple acquisition of UK firms Simpson Millar, Goodmans Law and the PI practice of Taylor Vinters.

Slaters has agreed terms on the three purchases, with the deals expected to be completed between August and December, while the firm is also expecting to make further acquisitions over the next six to 18 months.

The firm, which is led by managing director Andrew Grech (pictured), has forecast international revenues of A$290m (£190m) for 2013, with the acquisitions set to push the size of its UK business to around £48m by the end of the calendar year. 

Slaters last year took in UK turnover of £23.5m, with the addition of Simpson Millar set to add around £15m and Goodmans roughly £4m. 

According to its website, Taylor Vinters' PI team comprises 20 lawyers, although the firm declined to comment further, citing disclosure rules from the Australian Securities Exchange.

Slaters, which in 2007 became the world's first publicly listed law firm, is planning to raise $63.9m (£41.9m) in equity to fund the UK growth via an underwritten placement and a share placement plan, with this funding power handing the firm a key advantage over UK market rivals. 

Former Weightmans managing partner Patrick Gaul said: "This signals a big shift in the UK personal legal services market and underlines Slater & Gordon's intention to build critical mass and become a really major player in PI over the next five years. 

"It can raise money at a time when most firms are short of cash, which is a major advantage at a time of market change."

Knights managing partner David Beech agrees: "Slater & Gordon clearly intends to grow its business in the UK having started with RJW. [UK chief executive] Neil Kinsella is not only able to grow by acquisition, but also has the capital and firepower to do it from his listed parent. How can partnerships without capital compete? They can't."

Meanwhile, Parabis-owned Plexus Law is set to merge with insurance dispute resolution firm Greenwoods in a deal that will create a £90m defendant insurance litigation business. Greenwoods, which focuses on catastrophic loss claims, pure insurance coverage, major property damage and construction liability claims, has turnover of roughly £24.5m.

Plexus is part of the Parabis Group, which last year sold a majority stake in its business to private equity house Duke Street, handing it a war chest of around £50m to fund ambitious expansion plans.

Parabis, which also owns insurance litigation firm Cogent Law, last year took in total turnover of £108m. The firm claims the Plexus-Greenwoods merger will create a £90m defendant insurance business, with total turnover for Parabis Law standing at £150m, placing it just outside the UK top 20.

DWF managing partner Andrew Leaitherland observed: "It's a good move for both firms given consolidation within the industry generally.

"The ownership structures of the two firms are neatly aligned, which makes this type of transaction more feasible. As always, the primary issue will be stakeholder support – clients and people need to be fully bought in to the offering."