Legal Financers Prepare To Merge

Burford Capital

Summary: Two competing legal financing firms are preparing to join forces to create a bigger, more powerful legal financing company.

Legal financer Burford Capital Limited is planning a merge with their rival Gerchen Keller Capital LLC in a $160 million deal. Combining their firms would produce $1.2 billion in investment and commitments in an industry that continue to grow.

More and more law firms are looking to outside sources to fund litigation. Law firm structures quite often prevent them from investing in long-term litigation that requires expensive technology and data security improvements.

Burford committed $30 million to Hausfeld law firm last year to help them grown their presence in Germany. They also said they are committing $100 million in financing for a number of cases at a undisclosed law firm. Christopher P. Bogart founded Burford in 2009. He is the current chief executive but served as the general counsel for Time Warner previously. They report revenues of $103 million.

Gerchen Keller has $1.3 billion in assets raised from financial institutions, public pensions, family wealth offices, foundations, and university endowments. One of their main financing effort in a case in Britain challenging MasterCard fees. They report an income of $15.4 million this year with the operating profit at $9.1 million.

The deal is reportedly a merger of cash, shares in Burford and loan notes plus combined expertise and resources.

Do you think their merger will give them too much power in the industry? Tell us in the comments below.

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