During May 2023, Allegro Fund IV successfully completed the acquisition of Slater & Gordon and delisted it from the ASX. As previously reported in VPEG4’s March 2023 quarterly investor report, S+G is a leading Australian law firm specialising in the consumer law market with over 10% market share and has an almost 90-year history in providing personal injury and class action law services.
This acquisition allows Allegro to partner with and support Slater & Gordon’s management team in pursuit of growth initiatives, which leverage’s Allegro’s strong turnaround track record.
The law firm had previously been impacted by a debt-for-equity swap in 2017 following a debt-funded acquisition of UK firm Quindell, which saw hedge funds own nearly 94% of the equity before Allegro’s bid. However, Slater & Gordon has since posted a $110 million net revenue, up 37%, and a $16.7 million after-tax profit in the first half of FY23. It has also cut its net debt to EBITDA ratio from 3.2-times in the June 2022 half to 1.6-times at December 2022 end.
These improvements, combined with the limited liquidity since the 2017 recap, make the acquisition an attractive turnaround opportunity for Allegro Fund IV and their investors including Vantage Private Equity Growth 4 (VPEG4).
