IPO for professional services business

DSW Capital which owns Dow Schofield Watts, has raised £5m in an IPO as it plans to grow its presence and offering.

The flotation gives the company a market capitalisation of £21.4m, based on a share price of 100p.

DSW Capital, which has an office in Leeds, operates a platform business model that provides a flexible and autonomous alternative to traditional accounting and professional services firms.

It currently has 19 licensee businesses which trade primarily under the Dow Schofield Watts brand, with 82 fee earners, with additional offices in Daresbury, Manchester, London, Reading and Aberdeen.

The deal is designed to support the company’s vision for the Dow Schofield Watts network to become the most sought-after destination for ambitious, entrepreneurial professionals to start and develop their own businesses.

For the year ended 31 March 2021, DSW Capital generated operating profit of £1.7m and operating cash flow of £0.8m.

The funding from the IPO will be used to scale the business through organic growth, geographical expansion, additional service lines and invest in ‘break outs’ – existing teams in larger firms.

The directors are targeting high margin, complementary, niche service lines with a strong synergistic fit with the existing Dow Schofield Watts network.

James Dow, CEO and co-founder of the group, sold no shares in the IPO and will hold c.14.5% of the group when trading begins on AIM on 16 December 2021. Combined, the directors will hold 24.5%.

Dow said: “We are delighted to announce our IPO and admission to AIM, which are important milestones for DSW Capital.

“The successful fundraise will support our strategy to capitalise on the substantial growth opportunities presented in the changing UK accounting market and our vision to become the most sought-after destination for ambitious, entrepreneurial professionals to start and develop their own businesses.

“The success of our model is demonstrated by the rapid rise of the DSW Network up the sector rankings.

“We believe our new quoted company status will help raise the profile of DSW further, enabling us to accelerate the growth of our Network.”

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