Corporate finance specialist snapped up for £22m

Mike Driver

A corporate finance specialist based in Manchester has been sold in a deal worth £22m.

Convex Capital, a specialist sell-side corporate finance boutique, has been acquired by a London law firm.

London based Rosenblatt expects the transaction to be immediately.

The majority of the consideration is to be paid in shares, with a maximum of 40% to be paid in cash from existing resources.

A significant proportion of the consideration is deferred on the completion of an earn-out.

Key management and employees of Convex have agreed to a long-term lock-in for shares and lengthy non-compete clauses.

The acquisition of Convex is expected to help generate a regular flow of fee-based work for Rosenblatt’s Corporate division, which is focused on commercial transactions.

Rosenblatt is looking to diversify beyond legal services, focusing on high-margin professional services companies, which will also create opportunities for the cross-referral of business.

Convex is focussed on helping companies, particularly owner-managed and entrepreneurial businesses, realise their value through sales to large corporates.

It identifies and proactively targets firms that it believes represent attractive acquisition opportunities.

Convex generated revenues of £8.7m and profit before tax of £4.3m last year.

The firm has net assets of £3.7m and no net debt. Convex was owned by its directors. All directors and employees of Convex will stay with the business.

Convex was established in 2011 by chairman Mike Driver. It has completed in excess of £1bn in transactions over the last four years and completed 13 deals in the last year alone with EBITDA margins of more than 50 per cent.

Rosenblatt also intends to use Convex’s Manchester base to create a new regional business hub.

The group will market its expanded professional services offering from the hub, which will also create the opportunity for further cost savings on back-office functions.

Nicola Foulston, chief, Rosenblatt, said: “Convex is an exciting and successful business, which shares with Rosenblatt a focus on high-margins and cash generation.
“Like Rosenblatt, it is an entrepreneurial company with a proven ability to create markets where none have existed.

“We also share a similar client base, often working with entrepreneurs. We have had the pleasure of working with Mike and the Convex team over several years and know there is a strong cultural fit between the two organisations. There is a considerable market opportunity in terms of cross-referrals of business between Rosenblatt and Convex, as well as the opportunity to expand our regional presence.”

Mike Driver, Convex chairman, said: “The combination of Convex and Rosenblatt is a fantastic opportunity to drive the development of both companies. Like ourselves, Rosenblatt builds strong relationships with entrepreneurs and business
founders.

“Working closely with Nicky and her team will expand our network to help identify future transaction opportunities. We can also increase the support that we can offer clients to ensure a successful deal. We are very excited about the future opportunities that this agreement will bring.”

Manchester law firm Freeman Fisher acted for the sellers and management of Convex Capital.

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