Law firm Horwich Farrelly takes on private equity investment

Ronan McCann, CEO of HF

HF, specialist legal advisors in the insurance and commercial sectors has received “a significant strategic investment” by CBPE, a UK based private equity firm, subject to regulatory approval.

The deal will see CBPE, which stands for Close Brothers Private Equity, acquire a minority stake in HF (previously known as Horwich Farrelly), providing capital to accelerate HF’s ambitious growth strategy and invest in further technology-driven legal services.

CBPE also see potential for HF to make “targeted acquisitions”.

Structured as a limited company, one of a small number of law firms that has done so, HF has an all-employee share scheme giving every employee part ownership of the business.

In this new deal with CBPE, the HF team will roll over the majority of their investment, but CPBE bought a stake in the business from staff shareholders. A spokesman for the firm declined to put a price on the investment cheque. 

The business made pre-tax profits of £4.1m on turnover of £51.5m in the financial year to December 2023, the last accounts posted.

Its client portfolio includes 19 of the Top 20 insurance companies.

Since 2022, HF has grown its service offering organically as well as through lateral key hires and acquisitions and has invested in technology.

The Manchester-headquartered HF also has offices in Leeds, Sheffield and Liverpool, as well as other locations around the UK.

In May TheBusinessDesk.com reported that HF secured a £12m funding package from NatWest to “underpin HF’s mission to grow turnover, building on its solid foundations and reputation in the legal and insurance sectors.”

Ronan McCann, CEO and Managing Partner at HF said: “Our continued growth over the past few years has naturally attracted interest from outside investors. However, it was always crucial for us to work with an organisation whose values and culture align with ours, making CBPE the perfect partner for us.  We’re excited to be stepping into the future with them, their proven track record in the professional services and financial services markets and dynamic approach will fast forward our ability to grow and invest in our innovative technology, our service offering and our people.”

Richard Thompson and Naveen Passi (Partners of CBPE) commented: “HF is an outstanding business led by a very strong management team. The business transitioned from a partnership to corporate in 2021. Under Ronan’s leadership, the business has built a client centric growth focused culture. HF is differentiated through its ability to combine highly technical ‘lawyer led’ services and trusted advice with a technology led approach to higher volume work. We are backing the business to continue its strong organic growth, further investment in technology and targeted mergers and acquisitions to expand its service offering. We are very excited about partnering with management over the next phase of HF’s growth.”

HF were advised by Jonathan Boyers and Patrick Simpson of Alvarez and Marsal, their corporate finance advisors, and by Addleshaw Goddard the legal advisors.

Boyers told TheBusinessDesk.com: “We loved working with the HF Team on sale of a stake in the business to CBPE. We wish the team there well and we are confident that we will see that business go from strength to strength. It’s the fourth Professional Services deal that A&M Corporate Finance have advised in this year and Legal Services in particular is a sector where we expect more activity in 2025.”

The Addleshaw Goddard team advising on the deal included Katie Parker and Beth Nixon from the Private Equity Group, together with Jon Cheney and Benedict Sanderson from the Professional Practices Group. The team has advised on a series of significant transactions within the sector, including the secondary buyout of Cooper Parry announced last week.

Katie Parker said: “Following a longstanding relationship advising HF we are thrilled to have advised on this transformative transaction, which will drive the next stage in what has been impressive growth to date. Working together across all of our market leading practices, we are uniquely positioned to advise on the intricacies of deals in this sector and we are proud to be trusted by fellow professionals to navigate the unique dynamics involved in these types of transactions.”

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