Quindell has bought Compass Costs for £14 million as it continues its ambitious programme of growth in the claims market.
Operating as a division within Quindell Legal Services, the legal costs draftsman will provide its services across the whole of Quindell's portfolio of cases, and further enhance the group’s strength post-LASPO implementation.
"Compass Costs is already one of the UK’s largest cost draftsmen, but with the benefit of our volume, it becomes the largest,” said Rob Terry in a statement on 2 April.
“Its operation is well respected in the industry for delivering value to its clients, and is both ethical and market leading in its approach. The acquisition has been completed in line with our stated strategy of only issuing stock at a premium to current market valuation and it is expected to be earnings enhancing in the current year and significantly earnings enhancing in 2014.”
A day later, Quindell revealed that it had secured a five-year contract with RAC, which could potentially generate an annual revenue of £500m.
RAC’s seven million members will now use Quindell's end-to-end service for all personal injury claims, including medical reporting, rehabilitation, auto accident repair and vehicle hire services.
Kerry Michael, RAC's commercial director, said that the association with Quindell would enable the company to improve “the customer journey” for its members whilst “driving down the cost of claims for the industry as a whole”.
“Quindell's technology and integrated outsourcing offering is market leading and we believe offers our members and commercial partners a best of breed solution that will enhance their driving experience," he said.
As part of the deal, the RAC will be granted warrants over 250 million shares in the capital of Quindell at £0.13 per share (this equates to a value of £32.5 million), or the average trading price in the 30 days prior to a move to full LSE listing if lower, giving the company a stake in Quindell.