LDC to take a minority stake in Keoghs following ABS licence

Back in September I reported that defendant insurance law firm Keoghs was expected to take external investment from private equity house LDC (part of the Lloyds Banking Group) once it had received its alternative business structure (ABS) licence.  This is now about to come to pass, with the SRA having approved the conversion to an ABS and Keoghs having agreed to sell a 22.5% stake in the business to LDC.  

It is interesting that LDC will take only a minority stake in the business – traditionally PE houses have preferred to take a majority position in target businesses, to ensure a greater degree of control. Perhaps this is the reason why Keoghs switched horses from Bowmark to LDC relatively late in the process?

Keoghs is a defendant insurance claims specialist with 1,000 employees across offices in Bolton and Coventry. Established in 1968, the firm represents insurers and councils and reported fee income of £55m in 2011.  It plans to use the investment funds to invest in technology and potentially acquire some complementary businesses.