Insolvency expert announces latest acquisition in deal worth up to £6.35m

Ric Traynor

Insolvency group Begbies Traynor has completed a deal to acquire London-based insolvency and recovery practice Alexander Lawson Jacobs (ALJ) in a move potentially worth £6.35m.

The Manchester-based group said it is initially paying £2.35m, comprising £2.1m in cash from existing resources and the issue of 296,195 new shares.

But under the terms of the acquisition, an additional £4m will become payable, in cash, subject to the business achieving financial targets in a five year period following completion of the acquisition.

Begbies Traynor said the full amount will only be available in the event of “significant growth” over the period.

ALJ is a well-established firm and is ranked as a top 20 UK insolvency practice, by insolvency appointments.

The team of 24 directors and employees will join the Begbies Traynor group and enhance its existing strong network of offices across London and the South-East.

Begbies said the acquisition is in line with its strategy to increase the scale and market share of its market-leading insolvency practice.

ALJ has a strong recent record of financial performance. In the financial year ended June 30, it reported annual revenues of £3.1m and pre-tax profits of £900,000, when reported on the same basis as the group. It had gross assets, excluding cash, of £500,000 as at June 30.

Begbies said an application has been made for the new shares to be admitted to trading on AIM from October 31, which means the group will have 127,630,936 ordinary shares in issue.

The Begbies board expects that the aggregate impact of this acquisition, and the recent acquisitions of Ernest Wilson earlier in October, and Regeneratus, in September, together with the increase in shares in issue following the placing in July, will be earnings-enhancing in the current financial year, and thereafter.

Executive chairman, Ric Traynor, said: “I am very pleased to welcome the Alexander Lawson Jacobs team to the group.

“They are an experienced team with a strong recent growth record, which will enhance our existing strong network of offices across London and the South-East.

“This acquisition is in line with our strategy to increase the scale and market share of our market-leading insolvency practice.”

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