Acquisition of Cheshire employment group ‘transforms’ AIM-listed group
Employment consultancy Ellis Whittam has been bought by safety specialists Marlowe in a £59m deal that sees the exit of founder Mark Ellis and investor LDC.
Ellis Whittam provides outsourced employment law, HR and health and safety services. It supports more than 3,300 UK organisations via a fixed-fee subscription model.
The business employs 180 people at its headquarters in Aldford, near Chester, and at sites in Glasgow and London.
Marlowe is an AIM-listed business created five years ago to acquire and grow market-leading service businesses. The £200m-turnover group provides safety and regulatory compliance, including health and safety, occupational health, and fire safety.
The deal is on a cash-free, debt-free basis, and Marlowe has launched a £30m share placing to help fund the deal.
Alex Dacre, chief executive of Marlowe, said the deal “transforms our scale and capabilities” in employment law, HR compliance and health and safety advisory.
He said: “Ellis Whittam is a major step in strengthening our position as the UK leader in regulated safety and compliance services to organisations of all sizes.”
Ellis founded the company in 2004, aged 37, giving up his equity partnership and position as head of employment law at Aaron and Partners to follow his entrepreneurial vision.
The business grew steadily and established a market-leading reputation. In September 2016 LDC took a large minority stake, with its “significant investment” being used to accelerate organic growth.
The group has grown its annual revenues from below £9m to £16.6m in that time. In the year to August, it recorded adjusted EBITDA of £4.4m.
Speaking exclusively to TheBusinessDesk.com. Ellis said: “It’s been a great journey, it’s been a lot of fun actually. We have built a great reputation and business.
“I have been very careful to leave the business in good hands. Gavin Snell is a brilliant CEO and Andy Gunson is a brilliant CFO.
“Marlowe buys good businesses and continues to invest in them. The reason I selected Marlowe was because of the opportunity it presented for the business and my colleagues.”
The group appointed Clearwater International and had planned to “do something in about a year’s time” but some off-market approaches accelerated the timeline.
“We ended up going earlier because of the demand for the business,” he said.
Ellis will shortly “hang up my boots and move on to new challenges”, in line with the plan he had in mind when LDC came on board.
He said: “My plan is to do nothing for a couple of months but I have a few irons in the fire, including more work in the third sector – I’m a trustee of Cheshire Connect – as well as some angel investing.”
But he remains enthusiastic and is “really excited about the opportunity for the business” that being part of Marlowe presents, although it will be “business as usual” for the company.
He said: “I am most proud of the team of people we have built – their hard work, their determination, their focus and belief in quality.
“Our values about integrity, honesty and quality are why we have been successful.”
The acquisition is subject to FCA consent and is expected to complete next month.
Richard Ibbett, investment director at LDC in Manchester, said: “We’ve enjoyed working alongside Mark, Gavin and the team to support the growth of Ellis Whittam and many of our portfolio companies have appreciated their professional support as they became EW clients. We look forward to watching the business continue its success and wish the team all the best as part of Marlowe plc.”
Marlowe was advised by a team from Fieldfisher’s North West office, led by corporate partner David Bowcock, Adam Jones and Charlotte Round, as well as Rothschild and Grant Thornton. Ellis Whittam and LDC were also advised by DWF Law and KPMG.