Duke Street makes investment in leading provider of legal and claims management services

Date: 06/02/2012

Duke Street has acquired a significant stake in the Parabis Group, the market-leading provider of legal and claims management services to the UK insurance industry. The deal values Parabis between £150m and £200m. In the year to March 2012, the Parabis Group is expected to generate revenues of c. £160m.

Completion of the transaction is subject to receiving regulatory approval from the SRA, expected in the first quarter of 2012.

Parabis provides personal injury litigation services under the trading names of Plexus Law and Cogent Law, acting for a large number of insurers in the UK. Using the expertise gained from litigating approximately 200,000 cases per year, the group has diversified its services to cover a broad range of other areas including claims management outsourcing, rehabilitation, loss adjusting, and health & safety assessment and audit.

Through its unique and innovative proactive claims handling process, Parabis has delivered demonstrable and material cost savings for its clients, which has resulted in robust and long term customer relationships with large insurers. In addition, it has pioneered claims management outsourcing in South Africa. The group’s strong innovation and expansion into new areas has helped it to deliver revenue growth in excess of 25% per annum in the last four years, with continued significant growth forecast.

In addition to its expertise in the insurance space, Duke Street has had an active interest in the legal services sector since 2006 when the LSA was first proposed. The firm’s origination efforts focused on highly automated and industrialised service providers to the private and public sectors, including the insurance industry. Parabis stood out as the most attractive platform in the market. In the subsequent years, Duke Street remained close to Parabis’s founder management team and was therefore able to secure exclusivity in an off-market deal in the first half of 2011.

Commenting on the transaction, Duke Street partner Iain Kennedy said:

“Parabis presents a unique opportunity to invest in a fast growing, dynamic and fragmented sector. The attractions of Parabis are clear: a market leader with an unrivalled track record of revenue and profit growth, a differentiated business model, and the best management team in the industry. The intention is to support management with Duke Street’s operational expertise in transforming the business from a professional services firm to a business process outsourcer, and to drive the continued consolidation of the legal services industry via Duke Street’s successful buy-and-build model.”

The Parabis management team, led by Chief Executive Tim Oliver and Commercial Director Tim Roberts, will remain with the business and continue to be significant shareholders. 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. Paul will become Chairman of Parabis on completion.

Duke Street was advised on this transaction by Deloitte and SJ Berwin.