Staffordshire-based Knights has dipped into its IPO ‘war chest’ again, acquiring Leicester’s largest law firm in a multi-million pound deal.
It marks Knight’s second buyout since its £103.5m listing on the Alternative Investment Market (AIM) in June – the largest UK firm listing to date – with a deal for Manchester independent Turner Parkinson announced shortly after floating.
Today’s acquisition (9 October), Spearing Waite, gives Knights a new hub in Leicester and adds 59 fee earners, bringing its total to 450 across the country. In the financial year ending March 2018, Spearing Waite generated £7.1m in revenue, with £3.2m in distributable profits to partners.
Knights purchases the interests of Spearing Waite’s four equity partners for cash consideration of £5.35m and nearly 100,000 new shares in Knights, as well as deferred consideration of £800,000 paid over the next three years. Knights will also discharge up to £2m in debt and grant stock awards up to £265,000, meaning the overall deal will cost up to £8.5m.
The deal went live on 1 October, with Spearing Waite keeping its branding for ‘a short transitional period’ before being officially relaunched as Knights on 1 January 2019.
Knights chief executive David Beech (pictured) told Legal Business that Spearing Waite was an attractive proposition due to its core strengths in real estate, corporate and litigation. He added: ‘Most important for us was cultural fit. We want to integrate businesses as well as we can, not have disparate businesses around the country.’
Beech said the buyout was ‘right in the sweet spot’ of the firm’s acquisition strategy. This comes after the firm announced in June that it wanted to use its floating proceeds to land three buyouts by 2020. He added: ‘It’s a great example of what we are wanting to do. We’re pleased to have got it done, but now we have some work to do to integrate them well.’
Last month, fellow-listed firm Gordon Dadds announced a surprise move for struggling Ince & Co, in a tie-up which will create a £114m firm. If the move passes partnership votes, it will create the UK’s largest listed law firm.
