Yorkshire law firm to be acquired
LAW firm Simpson Millar is to be acquired by a debt management group for up to £15m.
Lancashire-based Fairpoint will pay an initial consideration of £9m in cash and shares, with a further earn-out consideration of up to £6m payable in cash and shares based on the financial performance for two years ending June 2016.
Leeds-headquartered Simpson Millar provides consumer-focused legal services with its main lines including: family, personal injury, and clinical negligence. The 150-year-old firm has more than 250 employees based in 13 offices around the UK.
The law firm has a strong track record of growth and profitability with revenues rising more than 40% between 2009 and 2013. In the financial year ended June 30, 2013 Simpson Millar generated consolidated revenues of £16.9m. It had consolidated gross assets of £10m as at June 30, 2013 and near term operating performance is underpinned with a strong pipeline of work in progress.
Chorley-based Fairpoint said the acquisition is in line with its strategy to diversify its income streams into new sectors such as legal services and that it would accelerate the growth of the group and immediately enhance earnings.
Simpson Millar will continue to be run by the current management team using its existing trading brands and operating as a business unit within the Fairpoint Group.
Fairpoint has also announced enlarged financing facilities to fund its future growth, with credit approved terms for new five year £20m financing facilities, which it said are currently in legal negotiation.
Chris Moat, chief executive of Fairpoint, said: “The proposed acquisition of Simpson Millar presents us with an opportunity to accelerate the diversification of our income streams into the legal services market place, in line with our stated strategy.
“Simpson Millar has already made significant progress in developing a powerful consumer offering, through the combination of strong legal skills with the innovative application of technology and legal processes. Our shared vision and approach is a solid basis upon which to further develop the consumer-focused legal services business and to help buyers of legal services make their money go further. Overall, the acquisition is expected to accelerate the growth of the Group and deliver enhanced earnings.”
Peter Watson, managing partner of Simpson Millar said: “We see this as a really innovative move in the market, which will allow us to reach more customers, continue to improve our value proposition for customers and to leverage each other’s capabilities in areas such as strategy, marketing, the efficient delivery of professional services at scale and business acumen. Together, we are considerably stronger and better placed to help more consumers with their legal requirements, offering both excellent customer service and great value for money.”
In the 12 months to the end of December Fairpoint saw revenues slip 5% to £28.4m while pre-tax profits fell from £10.5m to £5.9m.
The business said the difference was largely down to £4.3m of “exceptional revenue” last time and on an adjusted basis – taking into account amortisation and exceptionals – profits were up 7%, from £7.6m to £8.1m.
