TIDMGOR
RNS Number : 2151V
Gordon Dadds Group PLC
01 November 2017
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF EU REGULATION 596/2014.
1 November 2017
Gordon Dadds Group PLC
("Gordon Dadds" or the "Company")
Acquisition of business and assets of CW Energy LLP
Gordon Dadds Group PLC (AIM: GOR), the acquisitive London-based
legal and professional services business, is pleased to announce
that it has completed the acquisition of the corporate tax advisory
business and certain assets of CW Energy LLP ("CWE") for a total
initial consideration of GBP4.0 million, payable in cash over a 5
year period. Additional consideration may also be payable, and is
dependent on the performance of the business. The acquisition will
be funded from existing cash resources.
This acquisition is in line with the Company's strategy for
acquisitions as set out in the August 2017 admission document and
will further the Company's intention to expand its tax advisory
business which touches all of the Group's business divisions.
The board expects that the acquisition will be immediately
earnings enhancing.
Summary of CWE's business
CWE is a corporate tax advisory firm based in the City of
London. It was established in 1990 by a team of professionals who
had previously worked together in the corporate tax department of
one of the Big Four accounting firms. It specialises in the oil and
gas industry, working with blue chip clients, as well as advising
on other aspects of UK and international taxation.
In the year ended 31 March 2016, a loss of GBP4,000 was reported
after partners' remuneration. If the arrangements for members'
remuneration had been included on the same basis as that agreed for
the future, CWE's EBITDA for the year would have been GBP1.30m. CWE
has since then continued to trade at materially the same level. CWE
has a total of 3 partners and 6 employees.
CWE will continue to operate from its existing City of London
offices under its well established name. CWE's administrative and
support functions will move onto the Group's systems. This mirrors
the approach successfully adopted with the Group's successful
acquisition of the Alen-Buckley LLP business in June 2017.
Summary of the acquisition terms
The total initial consideration for the business will be GBP4
million in cash, of which GBP300,000 has been paid upon completion
with the balance payable in equal annual instalments over five
years. Additional consideration on a similar but not identical
basis will be payable to CWE for the goodwill of the business where
the CWE Fees (being fees of the business earned during the five
years after completion and collected) exceed the warranted minimum
of GBP13,000,000 and the consideration will be proportionately
reduced in the event that CWE Fees are less. Additional
consideration at lower rates will be payable on fees earned between
the fifth and tenth anniversaries of completion. These provide a
real incentive for the key CWE personnel to remain closely
involved. The consideration for the debtors and work-in-progress
(which had a value of GBP550,000 at 31 March 2016) will be the
amount realised therefor, payable following realisation. The total
consideration is capped at GBP8,000,000.
Commenting on the acquisition Adrian Biles, Chief Executive
Officer of Gordon Dadds, said:
"I am delighted to have completed our first acquisition after
Gordon Dadds' successful IPO in August. CW Energy LLP is a highly
regarded and highly profitable business which will enhance the
Group's activities and will provide further opportunities for
cross-selling services within the Group. Such acquisitions ensure
that Gordon Dadds is always providing a premium service which
caters to all our clients' needs."
"Since the flotation, we have received a number of approaches to
make acquisitions and also for lateral hires. We have a good
acquisition pipeline which will enhance earnings and the reach of
the Group."
Phil Greatrex, Managing Partner of CWE, added:
"We are delighted to join the Gordon Dadds group. We believe
this enhances the long term sustainability of our business. We are
excited to be working with Adrian and his team to broaden our
client base and develop new commercial opportunities."
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
Lydia Thompson
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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