TIDMGOR
RNS Number : 7236C
Gordon Dadds Group PLC
24 January 2018
24 January 2018
Gordon Dadds Group plc
("Gordon Dadds" or the "Company")
Acquisition of Metcalfes Solicitors LLP
Gordon Dadds Group plc (AIM: GOR), the acquisitive legal and
professional services business, is pleased to announce that it has
completed the acquisition of the well-established Bristol
solicitors firm, Metcalfes Solicitors LLP ("Metcalfes") for a total
basic consideration of GBP2 million, payable in cash over a five
year period. Additional consideration will also be payable in the
event that the fees generated exceed GBP20 million over the five
years following completion. The acquisition will be funded from
existing cash resources.
The acquisition demonstrates Gordon Dadds' ability to grow its
existing business through opportunistic, attractively valued deals
and will provide significant cross-selling opportunities across
divisions.
The board expects that the acquisition will be significantly
earnings enhancing in the first full year, to 31 March 2019.
Summary of Metcalfes' business
Metcalfes is a long-established firm of general practice
solicitors based in Bristol. Its largest areas of activity are
clinical negligence, property, non-volume personal injury, private
client and family and dispute resolution work from a generally high
net worth individual and corporate client base. Metcalfes recently
acquired the goodwill and certain assets of Burroughs Day LLP
("Burroughs Day") from the administrators of Burroughs Day.
Burroughs Day was another Bristol solicitors firm with offices very
close to those of Metcalfes and with a similar business mix. The
enlarged business trades as Metcalfes Solicitors and is managed by
the Metcalfes' team.
For the year ended 30 June 2017, Metcalfes had fee income of
GBP2.69 million and achieved a profit before members' profit shares
of GBP0.67 million. For the six months to 31 October 2017
(following a previous change of ownership), Burroughs Day achieved
unaudited fee income of approximately GBP2 million and a small
profit before interest and partners' profit shares.
The enlarged Metcalfes Solicitors should, the directors believe,
generate annual fee income of at least GBP4 million and the cost
base will benefit from significant overhead savings including
merged offices in Queen Square, Bristol and improved resource
management.
Summary of the acquisition terms
The total basic consideration for the business will be GBP2.02
million payable in cash, of which GBP0.28 million has been paid
upon completion with the balance payable in quarterly instalments
over five years. The vendors of Metcalfes have warranted that the
fee income of the enlarged Metcalfes' business will be not less
than GBP20.0 million over those five years and any shortfall will
reduce the consideration on a GBP for GBP basis. Additional
consideration will be payable to the vendors where such fee income
exceeds GBP20 million. The consideration for the debtors and
work-in-progress will be the amount realised therefor payable
following realisation less an allowance for the costs of
collection. The total consideration is capped at GBP6 million. This
provides a real incentive for the key Metcalfes personnel to remain
closely involved and drive growth.
Commenting on the acquisition Adrian Biles, Chief Executive
Officer of Gordon Dadds, said:
"Metcalfes is a profitable and very well regarded firm of
solicitors in Bristol with whom we have worked to integrate the
Burroughs Day business. We are confident that the enlarged business
can be developed into a significant as well as a respected and
highly profitable business under the leadership of Anthony Heath
and his team. Bristol complements Gordon Dadds' other locations and
is a fertile area for developing a high quality offering to
corporate and private clients."
"This deal closely follows the Group's recent acquisition of
White & Black Limited, a growing specialist technology
solicitors firm. We continue to have a strong acquisition pipeline
which we expect will enhance earnings and the reach of the Group
even further."
Anthony Heath, Managing Partner of Metcalfes, added:
"The opportunity to acquire the business of Burroughs Day and to
work with their team and clients is an exciting and major step
forward for Metcalfes. In addition, being a member of the Gordon
Dadds Group will enable our enlarged team to extend the range and
depth of the services we are able to offer our clients."
FOR FURTHER INFORMATION, PLEASE CONTACT:
Gordon Dadds Group plc Via Newgate
Adrian Biles, Chief Executive
Officer
Christopher Yates, Chief
Financial Officer
Arden Partners, Nominated
Adviser and broker to
the Company
John Llewellyn-Lloyd
Ciaran Walsh +44 (0) 20 7614 5900
Newgate Communications +44 (0) 20 7680 6550
Adam Lloyd Email: gordondadds@newgatecomms.com
James Ash
NOTES:
Gordon Dadds Group plc is an acquisitive legal and professional
services business headquartered in London with a significant back
office and technology platform based in Cardiff. It operates
through two distinct business channels, Gordon Dadds LLP and
Prolegal Solicitors Limited, to integrate law firms seeking to gain
scale in the UK.
Gordon Dadds:
Gordon Dadds LLP targets firms with annual fee income of
GBP10m+.
Prolegal:
Prolegal Solicitors Limited acquires and manages firms with
GBP2m - GBP10m annual fee income. These firms retain their identity
and culture and also benefit from the back-office technology
platform used by Gordon Dadds which allows Prolegal to target law
firms seeking an alternative solution to the regulatory and
investment requirements of the UK legal market.
The Gordon Dadds model offers a number of advantages to target
firms:
-- Partners are not required to borrow to fund capital
contributions and capital is built up over time out of profit
share;
-- Each partner receives as their profit share a percentage of
his or her personal billings, allowing partners to achieve a
significant uplift to what he or she might achieve in a traditional
partnership practice;
-- The Gordon Dadds model, with its clear division between
management and back office on the one hand, and client acquisition
and servicing on the other, allows partners to devote time to their
respective practice areas; and
-- Gordon Dadds Group plc's corporate structure enables partners
to acquire and retain an enduring investment in the business
through equity ownership.
Gordon Dadds LLP has been operating in this way since 2013,
successfully integrating firms into its cost efficient
platform.
Please visit www.gordondaddsgroup.com for more information.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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