DWF steps in for Cobbetts
LAW firm DWF has confirmed that it is set to buy ailing rival Cobbetts in a pre-pack deal.
TheBusinessDesk.com revealed on Thursday that Manchester-based Cobbetts, which has more than 500 staff in Leeds, Birmingham, was in financial trouble with debts of £10m and was looking to appoint an administrator.
Managing Partner and CEO of DWF, Andrew Leaitherland said: “DWF’s plans to grow, in a strategic, targeted way have been clearly set out and this move supports that goal.
“I am confident that the merging of the two firms would bring genuine benefits to both and, importantly, the joint client base. There are many synergies between the two firms in terms of the sectors in which we operate and this collaboration will further strengthen our existing business. I am very much looking forward to welcoming the new team to DWF.”
DWF said the process of transferring people across to DWF will start in the next seven days if the deal is approved, but warned there would be some job losses.
Mr Leaitherland added: “The legal industry as a whole has faced significant challenges. We will do all we can to make the integration as smooth as possible, however, as you’d expect in a move of this size, there are some areas of overlap and we may have to displace people or find them alternative roles. We will work hard to support all those involved.”
The DWF statement added: “Like many businesses, Cobbetts had built an infrastructure reflecting the buoyant economy of the mid 2000s and had put in place plans to reduce costs.
“However, poorer than expected trading in November and December last year caused the firm to review its financial position and subsequently obtain an interim statutory moratorium to enable a sale of the business and its assets.
“It is believed by the members of both firms that a sale to DWF represents a solution that would secure the most favourable outcome for its creditors, members, people and clients.
“For clients this move would facilitate the continuation of service delivery and business as usual, with the same service terms they have enjoyed at Cobbetts, thereby ensuring a smooth transition for them and their business interests.”
The two firms came close to merging in the middle of 2012, but the deal was called off due to uncertain market conditions.
The addition of Cobbetts, which can trace its roots back more than 150 years, will help DWF move towards its goal of becoming a top 20 law firm by turnover. Cobbetts had fee income of around £45m last year.