April 1, 2015
The deal is expected to deliver significant value for Slater and Gordon shareholders, with earnings per share expected to be greater than 30% accretive from the first full year of ownership alone. With further potential upside through the realisation of synergies, including optimising Slater and Gordon’s own claims management brand and insourcing legal costing work. The deal will also launch Slater and Gordon into the S&P/ASX 100 index.
Slater and Gordon is seeking to raise approximately A$890 million in new equity to fund the acquisition through a fully underwritten 2 for 3 pro rata accelerated renounceable entitlement offer priced at A$6.37 per share. The balance of the upfront consideration will be funded by fully underwritten bank debt. Slater and Gordon are expected to maintain its prudent capital structure within its 30-40% gearing range.
The deal is transformational for Slater and Gordon that positions them as the number one personal injury law firm in the UK and will allow Slater and Gordon to further penetrate the highly fragmented UK personal injury market. Slater and Gordon’s Market share will increase from 5% to 12% in the UK. The UK market is 5 to 6 times the size of the Australian personal injury market, and remains highly fragmented with approximately 10,000 law firms. The deal will further diversify Slater and Gordon’s sources of legal work, broadening access to claims management companies, insurers and insurance brokers.