REG - Knights Group Hldgs - Acquisition of Langleys Solicitors LLP

Knights groupAnnouncement

31/01/2022 07:00

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RNS Number : 0563A  Knights Group Holdings PLC  31 January 2022

31 January 2022

Knights Group Holdings plc

("Knights", the "Company" or the "Group")

 

Acquisition of Langleys Solicitors LLP

 

Knights becomes top law firm in York and expands East of England presence

 

Knights, one of the UK's fastest growing legal and professional services
businesses, today announces that it has agreed to acquire Langleys
Solicitors LLP ("Langleys"), a leading independent law firm in York and
Lincoln.

 

Acquisition rationale and background

 

Langleys, established in 1890, brings a further 72 fee earners to Knights,
significantly strengthening the Group's presence in York. The acquisition will
also allow the Group to further expand its operations in the East of England
by providing entry into Lincoln, an attractive growth market for legal and
professional services.

 

The acquisition of Langleys is in line with the Group's strategy to accelerate
its organic growth through carefully targeted acquisitions which are a strong
cultural fit, with the firm's real estate and corporate offerings being
closely aligned with Knights' existing services. Langleys has particular
strength in private wealth, where there is significant growth potential.

Langleys also operates a legal aid child law (CL) business within Langleys LLP
and a volume residential conveyancing business through a subsidiary, Home
Property Lawyers Limited (HPL), which have 5 and 64 fee earners respectively.
These businesses are included in the transaction perimeter but are non-core to
Knights and as such the strategic options for them will be reviewed.

In its unaudited accounts for the year ended 31 March 2021, Langleys reported
revenue of c£14m with a corporatised PBT margin of c5%. Approximately two
thirds of revenue is in respect of the core Langleys business (excluding the
HPL and CL businesses).  Following full integration and realisation of all
synergies, the Board expects the core business to contribute a PBT margin of
c20% which, combined with a typical level of revenue churn post-acquisition,
means the acquisition is expected to be immediately earnings enhancing.

 

Terms of the acquisition

 

Under the terms of the acquisition, Knights will acquire Langleys from its
four existing equity partners ("the Sellers") on a debt free, cash free basis
for a total consideration of £11.5m subject to working capital adjustments at
the time of completion. This comprises an initial consideration of £8m, made
up of £5.25m in cash and £2.75m in 704,515 new ordinary shares in Knights,
(the "Consideration Shares"), along with deferred cash consideration of £3.5m
to be paid in equal instalments over the three years following completion. The
cash consideration will be satisfied from Knights' existing
facilities. Completion is expected to take place on 25 March 2022.

 

 

Commenting on the acquisition, David Beech, CEO of Knights, said:

 

"We are delighted to announce the acquisition of Langleys, a leading firm that
has a strong cultural fit with Knights and expertise closely aligned with our
existing services. The acquisition sees us become the leading law firm in York
and provides a strong base for organic growth in the East of England through
Lincoln, as we continue to strengthen our position as the leading legal and
professional service business outside of London."

 

Tim Cross, Partner, Langleys commented:

 

"Having built a strong reputation over a number of years, now is the right
time to join Knights, whose growth journey we have followed in York and
elsewhere across the regions. We believe Knights' scale, ambition and ability
to invest will enable us to unlock significant growth potential and we look
forward to achieving this as part of a larger Group."

 

 

- ENDS -

 

 Knights
 David Beech, CEO                        Via MHP Communications

 Numis (Nomad and Broker)
 Stuart Skinner, Kevin Cruickshank       020 7260 1000
 MHP Communications (Media enquiries)
 Andrew Jaques, Katie Hunt, Rachel Mann  020 3128 8100

07585 301464

knights@mhpc.com

Enquiries

 

Notes to Editors

Knights is a fast-growing, legal and professional services business, ranked
within the UK's top 50 largest law firms by revenue. Knights was one of the
first law firms in the UK to move from the traditional partnership model to a
corporate structure in 2012 and has since grown rapidly. Knights has
specialists in all key areas of corporate and commercial law so that it can
offer end-to-end support to businesses of all sizes and in all sectors. It is
focussed on key UK markets outside London and currently operates from 17
offices located in Birmingham, Cheltenham, Chester, Crawley, Exeter, Leeds,
Leicester, Maidstone, Manchester, Nottingham, Oxford, Sheffield, Stoke,
Teesside, Weybridge, Wilmslow and York.

 

 

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