DBAY Advisors buys 29% stake in Liverpool’s Anexo

Anexo executive chairman Alan Sellers

Private equity firm DBAY Advisors Limited has agreed to acquire a minority stake of 29% in Liverpool-based Anexo Group, the AIM-listed credit hire and legal services firm.

The news came as Anexo provided a trading update for the second half of 2020 to date.

Anexo Group offers replacement vehicles and legal services to individuals who have been involved in a “non-fault” accident.

“The group announces today that it and its controlling shareholders have entered into agreements with leading private equity firm DBAY Advisors Limited,” said Anexo in a stock exchange statement.

“DBAY has agreed to acquire a minority stake of 29.0% of the issued share capital of the Group from Alan Sellers, Samantha Moss and Valentina Slater at a price of 150 pence per share.”

Anexo shares were up about 10% to 146p on Thursday.

Sellers, who founded Anexo in 1996, will continue in his role as executive chairman. Moss will remain as managing director, Bond Turner, and Valentina Slater will remain as sales director, Direct Accident Management Limited.

DBAY has offices in the Isle of Man and London.

Anexo executive chairman Alan Sellers said: “We are delighted to welcome DBAY as a major shareholder in the group.

“They have an excellent track record of smaller company investment and we look forward to working closely with them to achieve growth across our various business divisions.”

DBAY partner and chief investment officer Saki Riffner said: “We are excited to invest in Anexo alongside Alan, who has built the business over the last 25 years, and we are looking forward to working closely with him and his team to drive the future growth of the group.”

DBAY will initially acquire 9.9% of the issued share capital of Anexo.

Following receipt of the necessary regulatory approvals from the Financial Conduct Authority and the Solicitors’ Regulatory Authority, DBAY will then acquire an additional 19.1% shareholding in Anexo.

Subject to these regulatory approvals, the second part of the transaction is expected to be completed within three months.

On current trading and outlook, Anexo said: “The group’s core businesses have continued to be fully operational following the reintroduction of a national lockdown.

“Activity levels in the Credit Hire Division (EDGE) continue to be high.

“The COVID-19 pandemic has led to a number of the group’s competitors withdrawing from the market and, as a result, Anexo has been approached by a number of high-quality introducer garages looking for new partnerships.  

“The group has taken advantage of this unprecedented opportunity to expand its introducer network; as a consequence the number of vehicles on the road during H2 2020 has consistently exceeded internal targets and, as at 10 November 2020, stood at 1,902.  

“Despite the decline seen at the start of the first lockdown in March and April 2020, the average number of vehicles on the road for FY 2020 is expected to exceed the figure for FY 2019.

“The courts remain open, as they have done throughout the year, and the group’s legal services division, Bond Turner, has continued to reach case settlements via telephone and online hearings where necessary.  

“The group is maintaining its expansion in staff numbers and the necessary supporting infrastructure and expects this investment to continue to support case settlements and cash collections into FY 2021.

“Despite the COVID-19 pandemic, which has continued to have an impact on cash collections in H2 2020, the board expects overall cash collections for FY 2020 to be ahead of the prior year.  

“The expansion of the introducer network and the corresponding increase in the number of vehicles on the road has led to the expectation that H2 2020 will be a period of cash absorption rather than cash generation.

“The group announced on 28 January 2020 that a new regional office in Leeds for Bond Turner would open during FY 2020.  

“Following delays caused by the COVID-19 lockdown, the group is now pleased to confirm that a lease has been signed and the Leeds office will become operational in the first quarter of FY 2021.  

“Staff have already been recruited and further recruitment will continue during the remainder of FY 2020 and throughout FY 2021.

“Following its most recent marketing campaign concerning the legal action against Volkswagen AG (the ‘VW Emissions Case’), the group is currently actively engaged on approximately 13,155 cases.  

“These marketing campaigns are ongoing and, as previously announced, all associated costs are expensed as occurred.  

“The group continues to explore potential emissions claims involving other manufacturers.

“The board confirms that, as stated at the release of its interim results on 13 August 2020, it expects H2 2020 underlying profit before tax (before investment in VW Emissions Case acquisition) to recover strongly from H1 2020 levels.  

“Notwithstanding the current national lockdown and the continued uncertainty caused by the COVID-19 pandemic, the group is trading in line with management expectations.”