TIDMKGH
RNS Number : 0615S
Knights Group Holdings PLC
04 November 2019
4 November 2019
Knights Group Holdings plc
("Knights", the "Company" or the "Group")
Acquisition of Emms Gilmore Liberson ("EGL")
Knights enters Birmingham with acquisition of a full-service
independent law firm
Knights Group Holdings plc, one of the UK's fastest growing
legal and professional services businesses, today announces that it
has acquired the entire issued share capital of Emms Gilmore
Liberson ("EGL"), a full-service independent law firm in
Birmingham.
Acquisition rationale and background
This acquisition takes Knights into a new key market outside
London, in line with the Group's strategy to accelerate its organic
growth through carefully targeted acquisitions which enhance the
core business strengths and are considered a strong cultural
fit.
Founded in 2011, EGL is an independent full-service law firm
with a commercial focus which will further extend Knights' existing
corporate, dispute resolution, real estate and private client
service offering. The acquisition will bring an additional 28 fee
earners to the Group. The move into Birmingham also sees Knights
expanding to nine offices outside London, realising one of its key
targets set at the time of IPO.
In its unaudited accounts for the year ending 31 March 2019, EGL
reported revenue of circa GBP4m with a corporatised PBT* margin of
circa 15%. Following integration, including the delivery of cost
synergies, the Board expects EGL to deliver a PBT margin of
approximately 20%. The acquisition will be immediately earnings
enhancing.
Terms of the acquisition
Under the terms of the acquisition, Knights will acquire EGL
from its four existing shareholders ("the Sellers") on a debt free,
cash free basis for a total consideration of GBP4.7m. This
comprises an initial consideration of GBP3.034m, made up of
GBP1.367m in cash and GBP1.667m in 515,057 new ordinary shares in
Knights (the "Consideration Shares"), along with deferred cash
consideration of GBP1.667m to be paid over two years, subject to
conditions being met. Excess cash balances in the business will
also be distributed to the Sellers. The cash consideration will be
satisfied from Knights' existing facilities. In addition,
restricted stock awards in respect of 30,904 new shares will be
issued to EGL's four salaried partners upon completion and will
vest subject to those salaried partners remaining in employment
with Knights one year after completion.
Application has been made to the London Stock Exchange for the
admission of 548,914 new ordinary shares to trading on AIM. Of
these shares, 545,961 represent the Consideration Shares and 2,953
reflects the issue of new ordinary shares issued to two former
Knights employees following the exercise of their SAYE scheme
options. Admission of the new shares is expected to take place at
8.00am on 5 November 2019. The Company's total issued share capital
following admission will consist of 73,875,075 ordinary shares of
0.2 pence each with one voting right per share. This figure may be
used by shareholders as the denominator for the calculations by
which they will determine if they are required to notify their
interest in, or a change to their interest in, the share capital of
the Company under the FCA's Disclosure and Transparency Rules.
Commenting on the acquisition, David Beech, CEO at Knights,
said:
"We are delighted to have entered the Birmingham market today
with the acquisition of EGL, which is one of the few
well-established, full-service independent firms in the city.
"As our fifth acquisition since listing in June 2018, we are
delighted to build on our strong momentum with the new team
providing us with an exciting platform from which to grow our share
in this new market, through both lateral hires and bolt on
acquisitions."
Stephen Gilmore, partner of EGL, added:
"Since formation in 2011, we have grown EGL's client base and
team rapidly. Our high calibre team's focus on providing a
commercial but personal service to clients is closely aligned to
the Knights culture and model. We look forward to continuing to
deliver on our ambitious growth plans in Birmingham as part of a
larger Group."
*PBT has been referenced as it provides a truer reflection of
profitability than other profit metrics post introduction of
IFRS16.
Ends
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Enquiries
Knights
David Beech, CEO via MHP Communications
-----------------------
Numis (Nominated Adviser and Broker)
Stuart Skinner, Kevin Cruickshank, Michael
Burke +44 20 7260 1000
-----------------------
MHP Communications (Media enquiries)
Andrew Jaques, Katie Hunt, Rachel Mann +44 20 3128 8794
knights@mhpc.com
-----------------------
Notes to Editors
Knights is a fast-growing, legal and professional services
business, ranked within the UK top 100 largest law firms by
revenue. Knights was one of the first law firms in the UK to move
from the traditional partnership model to a corporate structure in
2012 and has since grown rapidly. Knights has specialists in all of
the key areas of corporate and commercial law so that it can offer
end-to-end support to businesses of all sizes and in all sectors.
It is focussed on key UK markets outside London and currently
operates from nine offices located in Birmingham, Cheltenham,
Chester, Derby, Leicester, Manchester, Oxford, Stoke and
Wilmslow.
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END
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