Former Dragon’s Den investor James Caan (pictured) has announced that his private equity company is to invest in a regional commercial firm.

Caan’s company Hamilton Bradshaw will invest an undisclosed sum in Staffordshire-based Knights as it applies to become an alternative business structure.

The entrepreneur, whose company has an annual turnover of more than £500m, will join the Knights board once the application is approved by the Solicitors Regulation Authority.

The commercial firm is the first of its kind in the UK to attract private equity investment since the Legal Services Act came into force last year.

Knights has 23 partners and 150 staff operating from three sites, but has ambitions to become a top 100 UK firm and provide a cheaper alternative to commercial firms in London for a corporate client base.

Caan, chief executive of HB, said: ‘The legal sector is undergoing significant change and consolidation.

‘Knights is an excellent firm which has proven management and financial backing to scale its business and position itself in the top 100 UK law firms. I am very focused on people-based businesses and Knights stood out as a business with a highly talented team.’

The business has been led since October 2011 by David Beech, who said he met with several potential investors before choosing an equity partner.

Beech added: ‘What stood out about HB was the fact that they don’t just bring capital, they also bring an incredibly talented team on board who will support our business to achieve its ambition to become a leading regional law firm and cost solution to London.’