Frenkel Topping acquires Cardinal Management for initial £5m payment

Professional and financial services company Frenkel Topping announced the acquisition of Cardinal Management on Monday, for a total possible consideration of £10m in cash.

The AIM-traded firm said Cardinal works closely with a number of key NHS major trauma centres (MTCs) to provide a ‘Major Trauma Signposting Partnership’ (MTSP) support service.

It said the total maximum possible consideration for the acquisition was £10m in cash, of which an initial £5m would be paid on completion.

The additional consideration of up to £5m could be due to the vendors on an earn-out basis, linked to certain “challenging” financial performance targets for the future growth and profitability of Cardinal between completion and 31 December 2025.

Frenkel Topping said the acquisition was “firmly in line” with its strategy to pursue quality opportunities in, and to drive consolidation of, the pre-settlement professional services marketplace in the personal injury (PI) and clinical negligence (CN) space.

The board said Cardinal was a “perfect” fit alongside the recent acquisitions of Forths Associates, A&M Bacon, Partners in Costs and Bidwell Henderson, and would allow further consolidation in the space, positioning Frenkel Topping as a market leader in the sector.

Cardinal is the sole commercial organisation operating in the space, with a five-year track record of contracts with the NHS, with a 100% contract renewal rate.

It was also in high demand from PI legal providers seeking multi-track cases, and provided a “clear opportunity” to expand the Major Trauma Signposting Partnership into additional MTCs within the NHS.

Through its core business, it supports litigators pre-settlement in achieving maximum damages, by providing expert witness services, and post-settlement to achieve the best long-term financial outcomes for clients after injury.

The board said the acquisition would provide a “clear and direct link” to claimants and their professional representatives at the earliest stage possible after injury or illness, introducing the portfolio of Frenkel Topping Group services in a “relevant and timely way” to its clients in the PI and CN litigation space, as well as claimants themselves.

It was also expected that the acquisition would drive future growth in the group's assets under management as successful claims and cases came to settlement.

“The acquisition of Cardinal fits exactly into our strategy of acquiring high-quality businesses in the personal injury and clinical negligence market which provide established opportunities for us to extend our reach into the sector and expand our client base,” said chief executive officer Richard Fraser.

“The timely support provided by Cardinal inside hospitals immediately after injury is absolutely crucial for injured parties to receive the best possible outcomes and we are delighted to be working with Andrew [Pemberton] to grow that level of support to more of the major trauma centres across the country.”

Frenkel Topping also said it would report results for 2021 in line with management expectations, and would provide a more detailed update in the coming weeks.

At 1247 GMT, shares in Frenkel Topping Group were down 1.91% at 77p.