Insider's October Deal of the Month
Sam Metcalf discusses the £60m acquisition of Stoke-on-Trent-based Davies Group as Insider's latest deal of the month.
"The success of Stoke’s Davies Group has led to the ownership of the company going to London, and into private equity hands," says Metcalf, editor of Midlands Business Insider.
"London PE house Electra Partners has moved quickly to snap up the claims management provider for £60m – a price that may well prove to be a bargain."
Davies Group manages more than 125,000 claims each year, equating to £500m of insurers indemnity spend. It operates from 19 UK locations, including its Riverside Park headquarters in Stoke.
The company was acquired in a management buyout in 2008, backed with £8.6m from private equity firm LDC.
Over the past three years, the group has more than doubled its profitability to £8.4m and increased its number of employees from 400 to 600.
Law firm Osborne Clarke advised LDC and the management team on the transaction.
Robert Wood, lead partner on the deal, said: "This is a great transaction for Osborne Clarke to have been involved in. As everyone will be aware, market conditions over the last two years have not been easy. Despite that, the tangible growth achieved by the management team of Davies Group, with LDC's support, is very impressive.
"This demonstrates the benefits that private equity can bring to a business and, indeed, the wider economy, even during more challenging stages of the economic cycle."
"This deal is testament to the great work of Charles Crawford, chief executive of Davies Group," added Metcalf. "Since he joined in 2009 he has invested in people and expanded the company’s range of services. Electra should prove to be the perfect partner as Crawford looks to further grow the business."
