Slater Gordon Holdings - SGH

[dingoNZ]

Announced this morning: Huge news for these guys, looking like a very bright future ahead.

FY15 Outlook:
Slater and Gordon confirms its FY15 guidance for existing operations:
- Total revenue of A$500 million (excluding announced UK acquisitions)
- Normalised EBITDA margin of 23 – 24%
- Cash from operations (as % NPAT) of >70%

Key Entitlement Offer Details:
- Fully underwritten 2 for 3 Entitlement Offer to raise approximately A$890 million
- Offer price of A$6.37 per new share (the “Offer Price”)
- The institutional component of the Entitlement Offer (“Institutional Entitlement Offer”) is accelerated

The Offer Price of A$6.37 per new share represents:
- A 10.0% discount to the theoretical ex-rights price (“TERP”)12; and
- A 15.6% discount to last closing price of $7.55

[NZSilver]

Thanks for that dingo, yeh looks good to me. Do you know how many more shares interms of. $$ they are offering to retail?

[NZSilver]

I see it now rights issue -

From MF

After months of speculation, Australia’s leading personal injury (PI) law firm, Slater & Gordon Limited (ASX: SGH), has announced it will acquire the Professional Services Division (PSD) of the UK firm, Quindell PLC.

The deal, worth $1,225 million, will see Slater & Gordon become the largest PI firm in the UK, jumping up from its rank at number three.

Quindell is believed to control 7% of the approximate $4.81 billion UK market.

In the past year, FTSE-listed shares of Quindell PLC have fallen over 76% as the group is subject to a probe into potentially poor accounting practices.

To fund the landmark deal for the PSD, Slater & Gordon will take on $375 million of bank debt and undertake an $890 million two-for-three pro rata accelerated renounceable entitlement offer.

That means, shareholders on the company’s registry as of 7pm (Melbourne time) on Thursday 2 April 2015, will have the right to buy two new shares for every three they already hold at a price of $6.37.

Slater & Gordon shares closed at $7.55 on Friday.

The deal is subject to a majority vote from Quindell shareholders, which will be held on 17 April 2015. If successful, the deal is expected to close in May 2015.

What the deal will do for Slater & Gordon

Slater & Gordon say the deal features a number of significant benefits, including:

Positioning it as the UK’s leading PI law firm
Providing channels for new business whilst complementing and extending current processes and infrastructure
Upside potential from a revival of the PSD business
30% earnings per share accretive
Potentially enabling the company for entry into the S&P/ASX 100 (Index: ^AXTO) (ASX: XTO)
In an ASX announcement this morning, Slater & Gordon’s Managing Director Andrew Grech said, “The acquisition is a transformational opportunity, and will allow Slater & Gordon to further penetrate the highly fragmented £2.5bn UK personal injury market… The combination of Slater & Gordon and PSD creates the number one personal injury law firm group in the UK…It further diversifies our sources of legal work, broadening access to claims management companies, insurers and insurance brokers.”

Following the acquisition, Slater and Gordon is expected to have gearing of between 30% and 40%, with net debt to EBITDA (earnings before interest, tax, depreciation and amortisation) of 1.9 times.

Should you buy Slater & Gordon shares?

This is a landmark deal for Slater & Gordon and its most brazen. Whilst the firm said it has reviewed 8,000 case files whilst conducting its due diligence, a number of teething issues could result from such a large acquisition over time.

Indeed, despite Slater & Gordon confirming its 2015 financial year revenue and cash flow guidance, investors should remain cautiously optimistic about the deal.

As always, before committing to take up of your offer for new shares, it’s important to maintain prudent levels of diversification within your portfolio and refrain from being heavily exposed to any one sector or company.

[dingoNZ]

Insto placement completed, shortfall price set @ $7.50, expect this puppy to go well north today. Strong insto support is always good!

[dingoNZ]

Quindell - QDD have approved the takeover of their Professional Services Division (PSD), meaning the ~₤637m acquisition will proceed pending meeting the regulatory requirements.

This is huge news for SGH, this means they will go from ~4% market share to approximately ~12% in the UK, making their the largest market player in their field. Post the consolidation of PSD, Slater & Gordon will have annual revenue over AUD$1.1 billion and EBIT close to A$200 million. It will have offices in more than 20 UK cities and employ around 5,000 people globally. Since 2007 earnings per share will have increased from 13 cents to about 60 cents, an impressive annual growth rate of 19%.

Prior to acquiring Quindell’s PSD, Slater & Gordon traded at a valuation of 17x earnings. It is now trading at only 13x earnings due to the large issue of new shares and integration risk.

Here is an article written by Milford on their history, very good piece if you've got time - http://milfordasset.com/slater-gordo...om-powerhouse/

[NZSilver]

Hopefully the quality management can integrate the very large acquisition successfully - I'm hopeful. (Fully paid for my rights) nb price dropping quickly towards right price... I think it's a winner long term. Might be time to top up even. Markets seem to be trading downwards

[NZSilver]

There ya go - below rights price....

[dingoNZ]

There ya go - below rights price....

UBS and NAB, the shorters club... I'm not to concerned, I'll happily topup along the way.

[NZSilver]

Serious uncertainty here. So below $4!!!!

[mark100]

I think this statement in the AFR says it all

"It's not a good look when a global law firm that profits off the mistakes of other corporates and relies on a reputation for accuracy admits to some serious accounting errors stretching back years."