Quindell Plc (LON:QPP) announced that its shareholders approved the agreement to sell its Professional Services unit to the Australian law firm, Slater & Gordon during a general meeting today.

Quindell Plc QPP

Slater & Gordon agreed to acquire Quindell’s Professional Services unit for A$1.2 billion ($928.1 million). The acquisition price is equivalent to a multiple of 6.9x in earnings before interest and tax, which is almost twice the 3.5x to 4.5x target acquisition multiple for Quindell.

Quindell will receive an upfront payment of £637 for its Personal Services unit from the Australian law firm. The further deferred cash consideration will be due on fees from the unit’s legacy noise-induced hearing loss claims.

Quindell plans to return substantial capital to shareholders

The British technology and outsourcing company said a majority of the proceeds from the sale of its Professional Services unit will be used to fund a substantial capital return to shareholders. Quindell plans to return capital to shareholders in the second half of this year. The company said the amount of the initial capital return will be around £500 million or more than £1 per share.

Quindell said any subsequent capital returns will be dependent on the deferred cash consideration from the settlement of the noise-induced hearing loss cases handled by the professional services unit. The company is expecting to receive 50% of the net fees from approximately 53,000 cases.

The British technology and outsourcing company added that further cash distributions will also depend on its underlying business performance and sale of non-core assets.

Quindell deal: A big step for Slater & Gordon to penetrate UK’s personal injury market

Market observers considered the acquisition as a big step for Slater & Gordon to penetrate the personal injury market in the United Kingdom. The Australian law firm estimated that the transaction would increase its market share in UK’s personal injury market to 12% from 5%.

Slater & Gordon believed that combining the firm with Quindell’s Personal Services unit will create a leading personal injury firm in UK. The deal will also allow the firm to diversify its sources of legal work further.

Quindell’s agreement with Slater & Gordon is still subject to the approvals of the Solicitors Regulation Authority and UK Financial Conduct Authority.