Fletchers owner splashes £74m on acquisitions in two years

The private equity owner of law firm Fletchers handed over £32m to buy a lead generator, it has been revealed, in a sign of the financial muscle that the new entrant to the profession is able to exert.

The annual accounts for holding company Lamed Topco show that the group bought its 100% stake in case acquisition specialist MMA Management (trading as Blume Group) for £31.95m in November 2022.

The accounts, which cover the year ended 30 April 2023, show the Blume business had £5m in identifiable net assets when it was bought. Lamed Topco, controlled by the private equity investment outfit Sun Capital Partners, paid £27.7m in cash and offered £4m worth of shares.

In the same financial year, law firms Minton Morrill and Smith Jones were bought by the group for £2.2m and £2.7m respectively.

Accounts for the previous year show that Sun Capital spent £36.7m to buy the serious injury specialist Fletchers, with £21.6m paid upfront. The group now operates two income streams: legal services and case acquisition management, employing 600 people as of last year. 

Lamed Topco said 2023 had been a ‘transitional year’ for the company with strong revenue growth offset by investment costs. Total revenues increased from £18m to £50m, but administrative expenses jumped from £20.5m to more than £49m. The group reported a loss before taxation of £3.9m.

The group said Blume made a ‘modest loss’ in the first months of trading, but it had secured access to new cases in clinical negligence and personal injury. It is understand the Fletchers annual caseload has increased from 6,700 to 10,000 – with the growth largely attributable to the Blume acquisition. While the claims company passes on work to its stable-mate, it continues to have arrangements for case acquisition with other firms. Directors of the holding company said they were ‘confident’ the business would become profitable in its first full year under new ownership.

They added: ‘We have invested significantly in future growth, both in signing more cases and recruiting more colleagues into Fletchers, and to improving our capacity and systems within Blume and its associated trading companies.’

Blume, previously known as MMA Digital, operates through two brands of its own: The Compensation Experts and The Medical Negligence Experts. Its chief executive Dez Derry stayed on with Blume as part of a wider group leadership team following the acquisition.

Peter Haden, chief executive of Fletchers Group, said at the time of the deal that it created ‘the UK’s leading medical negligence customer acquisition specialists’.

This article is now closed for comment.