Why the Quindell Legal Services deal is important to Slater and Gordon
The Slater and Gordon strategy is to grow their UK business by c7% and to dominate the market.
QLS is important to them as it is the largest personal injury firm in the UK.
Acquiring QLS will:
1. Make S&G the largest publicly listed legal firm in the world.
2. Make S&G the largest personal injury film in the UK.
3. Prevent any other business from becoming the dominant player in the market.
4. Provide the opportunity to increase margins due to scale
Why Slater and Gordon deal is important to Quindell
a) Provides market with a valuation for the business.
b) Results in a streamlined Quindell business.
Conclusion of a deal below market value does not have to happen. QLS could continue to operate as a viable revenue generating business.
Quindell are in the driving seat with the negotiation process and the fact that one of the deals has already been indicated as being c£900m (£640m +NIHL upside) means (a) above has already been achieved.
It remains to be seen if Quindell accept or reject a Slater and Gordon offer and if other parties indicate their interest in the QLS business.