Defendant firm Plexus Law has put itself up for sale after the breakdown of a deal to inject extra investment.

In a statement released yesterday, the Leeds-headquartered firm said investor support had been withdrawn after talks over extra backing ended.

Owners of the firm, which employs around 700 people working from six offices in England and one in Scotland, will now seek a merger or sale of all or part of the business to raise fresh funds.

The statement said Plexus had successfully agreed additional funding from its investors in March 2023, which was needed for what it described as the ‘ongoing impact of serious financial irregularities’ discovered by management after the business was acquired in 2019.

The terms of the new investment were subject to a number of conditions but after a period of negotiation the firm was unable to meet these.

‘As a result, investor support has been withdrawn,’ said the firm. ‘Up until this point, the business’ underlying trading has been running in line with its forecast.

‘In these circumstances, we are now looking to raise fresh funds for the firm from a new investor. This may involve a sale or merger of part or all of the business with another firm.

‘We are incredibly grateful to our dedicated employees who continue to work tirelessly to achieve the very best outcomes for clients. We are committed to ensuring those high standards are upheld throughout this current process.’

Plexus Law is one of the biggest firms in its field, handling more than 50 clients from the public sector and working with four out of the top 10 motor insurers.

The firm was part of the private equity-owned Parabis Group, which went into administration in 2015. Plexus was bought by a consortium of private individuals representing the original founders of the business.

In 2019, private equity investor Origin Equity purchased a £15m shareholding in Plexus Law, promising to help the business exploit advances around data management, analytics and next generation case management processing. Plexus chief executive Fiona Scott said at the time that the firm was ‘cash-rich’ and ‘overdraft free’.

According to its most recently-published accounts, Plexus Legal LLP, which owns Plexus Law, posted revenue of £48.9m for the year ended 31 March 2021 – an annual fall of 14%. Profit for the year before members’ remuneration and profit shares slumped from £4.9m to £1.8m.

Cost-saving measures had already begun in 2021, with staff numbers cut by 8% and the business spending around £535,000 on redundancy payments.

Accounts for 2021/22, due by 31 March this year, have yet to be filed with Companies House.

Plexus said today it could not confirm whether any posts would be at risk from the investment being pulled, but the protection of jobs and client service were ‘priorities’ throughout this process.

 

This article is now closed for comment.