Law firm-cum-technology company Quindell claims to be a “very different company” following the sale of a large part of its business.
As well as the sale, other developments at Quindell include the appointment of three non-executives, one of whom is the former Conservative party leader Michael Howard. Last year the company boasted a market capitalization of almost $4.6 billion before it became a target for shortsellers, writes Henry Mance for The Financial Times.
Sale follows a turbulent year
In that time the company decided to abandon previous plans to join the London Stock Exchange, forced out its founder Robert Terry and unwound a series of acquisitions. Now the company has announced that it has sold its legal claims business, as well as some technology operations, to Australian law firm Slater & Gordon.
The sale has been approved by the Financial Conduct Authority and the Solicitors Regulation Authority. Quindell’s website crashed following the announcement of the news.
Quindell is set to receive $975 million in cash, as well as a share of future profits arising from industrial deafness insurance claims. The company says that it will return $681-765 million to shareholders this year, and will also stash $76.5 million in an escrow account in case of future liabilities.
Quindell’s new board members bring fresh expertise
As well as Lord Howard, the other new non-executives are David Young, who used to work for Barchester Group, and Tony Illsley, who sits on the board of the UK National Lottery operator, Camelot. Robert Bright, Robert Burrow and Robert Cooling with leave the board, along with Quindells’s chief financial officer Laurence Moorse.
The company’s new chairman, Richard Rose, stated that the board had “the skills necessary to guide Quindell as it begins life as a very different company”.
Some shareholders have complained that they could not properly judge the benefits of the sale due to the fact that the company has not yet released financial results for 2014. These results are expected to be published before the end of June. Quindell is still discussing how to adjust past financial performance after finding some accounting methods that were “not appropriate.”
Shares in the company almost doubled in value over the past six months, and Quindell’s market capitalization stands at $975 million. The company claims that it will change its name after a turbulent 12 months.