Burford Capital (BUR) will buy the largest private litigation finance company Gerchen Keller Capital, significantly upscaling its business and adding investment management services. Burford will pay $160m for Gerchen Keller parent GKC via a mixture of cash, shares and three-year notes.
Predominately focused on US litigation, GKC has been branching out and is financing the £14bn UK collective action against Mastercard. Unlike Burford, GKC also provides post-settlement finance to parties involved in litigation after they have settled and are pending payment. It has $100m in outstanding post-settlement finance and $400m committed to pre-settlement investments. The acquisition will diversify Burford's revenue stream, since GKC gains performance and management fees from its four investment funds.