Having just recently confirmed the sale of its defendant personal injury arm Plexus Law, legal and professional services provider Parabis Group is to be broken up and sold in a seven-part pre-pack administration process.
One of the first firms to benefit from sweeping liberalisation of the legal services market in 2012, Parabis has been placed into a pre-pack administration handled by AlixPartners, in a move is expected to save ‘all but a handful’ of the 2,000 jobs at the company.
Peter Saville, Ben Browne and Anne O’Keefe of AlixPartners were today (23 November) appointed joint administrators over a number of entities within the Parabis group. Immediately following the appointment a series of sales of the group’s legal services, rehabilitation and field services divisions took place.
The appointment of administrators was made following an ‘extensive strategic review’ conducted as the result of a period of ‘financial difficulty and significant legislative change’.
The Parabis Group has now been broken up into seven pre-pack sales with the defendant law firms bought by Parabis’ founders; while the claimant business has gone to Bristol-based Lyons Davidson.
The management of Plexus Law – the founders of the Parabis Group – has acquired Plexus Law and Greenwoods, Cogent Law, and claims management division Parabis Claims Solutions.
Lyons Davidson has taken the claimant business of Cogent Law, as well as the joint venture with Saga. Premex Services has taken rehabilitation and medical legal reporting arm, Argent Rehabilitation; Davies Group has acquired Argent’s property and liability adjusters businesses; and Examworks Investigation has taken over the claims investigations business.
Commenting on the news, Saville said: ‘The group has been in discussions with its lenders and private equity backer for a prolonged period with a view to restructuring what is a complex business operating in an increasingly challenging legislative environment.’
‘Despite the receipt of further support from its financial stakeholders, [it] was unable to resolve its cash flow issues and sought to market itself for sale. As a result of that marketing process it became apparent that in the current environment a sale of the group as a whole was not a viable option and the liabilities attached to group entities also precluded a solvent sale.’
‘A series of business and asset sales was therefore agreed with the transactions completed by way of a pre-packaged administration preserving over 2,000 jobs in more than 20 separate office locations across the UK. Throughout this complex and frequently challenging restructuring process we have been consistently impressed by the quality and professionalism of the group’s management and staff and we wish all parties success for the future.’
The series of disposals are reported to potentially raise just over £50m, less than Parabis’s £70m of debt. The MBO of Plexus Law was announced earlier this month, after talks with LB100 firm Keoghs broke down.
In 2012 Parabis Law became the first private equity-backed ABS to be licensed by the Solicitors Regulation Authority, and was seen as one of the forerunners of the new legal landscape in the UK in which firms were able to welcome outside investment.
Sarah.downey@legalease.co.uk