Frenkel Topping announces £1.48m acquisition of costs consultants business

Salford-based Frenkel Topping Group has acquired Bidwell Henderson Costs Consultants for £1.48m.

Bidwell Henderson is based in Alfreton, Derbyshire, and Newcastle upon Tyne.

AIM-listed financial services group Frenkel Topping said it will pay £740,000 in cash at the time of the acquisition, £370,000 on the first anniversary and £370,000 on the second anniversary.

The sellers, Mark Bidwell, Rebecca Bidwell and Ann Delaney, will receive an earn-out of 2.5x the EBITDA generated in the year to December 31, 2023, over £296,000 capped at £2m, providing certain targets are met.

Frenkel Topping said the acquisition is firmly in line with the company’s strategy to pursue quality opportunities in, and to drive consolidation of, the pre-settlement professional services marketplace in personal injury (PI) and clinical negligence.

Bidwell Henderson has, over the past seven years, built a leading legal aid costs agency in England and Wales. It holds a market leading position in drafting high cost case plans which are required when significant costs are involved in large scale and complex legal cases.

The company covers specific areas of law such as complex public and private family, housing, judicial review, Court of Protection, abuse and clinical negligence cases. In addition, Frenkel Topping said Bidwell Henderson challenges the traditional legal aid costs firm model and has built its success on developing ancillary services in legal aid processing, legal cashiering and costs training.

As a result, Bidwell Henderson is highly integrated into law firms’ back-office systems. So, while litigation is transactional, the business model deployed by Bidwell Henderson means the nature of the revenues are of a repeat/recurring nature.

Given the close links Bidwell Henderson has to law firms, Frenkel Topping said this represents a clear opportunity for it to offer its other services such as expert reports in addition to the court of protection work and traditional legal costing that both the group and Bidwell Henderson undertake.

In addition, a number of legal aid funded cases result in large awards to claimants, so Bidwell Henderson offers the prospect of access to additional meaningful opportunities to secure assets under management (AUM) for Frenkel Topping, which said the acquisition is cash generative and is expected to be immediately earnings enhancing following completion.

It added that the company’s strategy is to ensure it has as many touch points as possible in the PI and Clinical Negligence space to capture as many revenue opportunities as possible, which the acquisition provides.

Bidwell Henderson was first established in 2014, currently employs or retains 55 people across two offices and specialises in high cost case plans and claims, and legal aided matter where an inter partes costs order is successfully ordered.

For the year ended March 31, 2021, Bidwell Henderson generated revenues of £1.56m, reported a £0.4m profit before tax and £0.4m net assets on the balance sheet as at March 31, 2021.

The sellers will remain within the group, to further enable Frenkel Topping to develop and maximise the cross-selling and up-selling opportunities the acquisition offers, in addition to driving forward Bidwell Henderson’s core cost consultancy practice within the group.

Richard Fraser, Frenkel Topping chief executive, said: “I am delighted to welcome Bidwell Henderson to the group. Over the past seven years Mark, Ann and Rebecca have built a leading legal costs consultancy and were well known to the group prior to discussions around the acquisition.

“This acquisition is in line with our strategy of maximising touch points in the PI and Clin Neg space with the added benefit of being able to sell Frenkel Topping services into existing Bidwell Henderson clients and look to further the AUM growth of the group.”

Rebecca Bidwell, director of Bidwell Henderson, said: “We could not be more delighted to become part of the Frenkel Topping Group.

“Bidwell Henderson is a growing business providing an array of legal services to lawyers. We have strategic and ambitious plans for the future.”

She added: “Becoming part of the Frenkel Topping Group will help us achieve those goals quicker and provide additional opportunities for our team. With the help of our bespoke and comprehensive in-house training programme and our exceptional team members, we are looking forward to bringing new opportunities to the market and being able to support more lawyers.”

Frenkel Topping also announced today that it will publish its interim results for the six months ended June 30, 2021 on September 20, 2021.