REG - Knights Group Hldgs - Acquisitions of St James Law and Baines Wilson

Knights groupAnnouncement

02/05/2023 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230502:nRSB9835Xa&default-theme=true

RNS Number : 9835X  Knights Group Holdings PLC  02 May 2023

2 May 2023

Knights Group Holdings plc

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

Acquisitions of St James Law Limited and Baines Wilson LLP

Strengthens Knights' presence in the North, providing entry into Newcastle and
Carlisle

Knights today announces that it has agreed to acquire St James Law Limited
(trading as St James' Square), a Newcastle-based commercial law firm, and
Baines Wilson LLP (Baines Wilson) an independent law firm headquartered in
Carlisle.

St James' Square

St James' Square is an independent full service commercial law firm located in
Newcastle, the financial centre of the North East of England. The acquisition
brings 23 fee earners to Knights and provides entry into Newcastle, an
important strategic location which complements the Group's existing Teesside
presence. The business also currently includes a debt recovery business
(accounting for just under 20% of company revenues); strategic options for
this business, which is considered non-core to Knights, will be reviewed
following completion.

In its unaudited accounts for the year ended 31 December 2022, St James'
Square reported revenue of £2.4m and a corporatised PBT margin, excluding the
debt recovery business, of circa 5%. Accounting for a typical 20% revenue
churn post-acquisition, the Board expects the acquisition to be immediately
earnings enhancing, with St James' Square expected to contribute an adjusted
PBT margin of circa 15% post synergy savings.

Under the terms of the acquisition, Knights will acquire St James' Square from
its four existing owner-managers, two employees and an investor on a debt
free, cash free basis, for a total consideration of £1.75m. This comprises an
initial cash consideration of £0.5m, with deferred payments of £1.25m to be
paid as £0.7m on the first and £0.55m on the second anniversary following
completion in each case subject to the satisfaction of certain conditions.
Completion is expected to take place on 16 June 2023.

Baines Wilson

Baines Wilson, which was founded in 1999, has grown into one of the leading
commercial law firms in the North West of England. Operating primarily out of
Carlisle, with an additional smaller office in Lancaster, Baines Wilson is a
specialist business law firm, offering Corporate, Real Estate, Dispute
Resolution and Employment services. The acquisition provides entry into
Carlisle, the financial and business focal point of Cumbria, and brings 27 fee
earners to Knights.

In its unaudited accounts for the year ended 31 March 2023, Baines Wilson
reported revenue of £3.2m and a corporatised PBT margin of circa 20%.
Accounting for a typical 20% revenue churn post-acquisition, the Board expects
the acquisition to be immediately earnings enhancing, with Baines Wilson
expected to contribute an adjusted PBT margin of circa 25% post synergy
savings.

Under the terms of the acquisition, Knights will acquire Baines Wilson from
its five existing equity partners on a debt free, cash free basis, for a total
consideration of £3.37m. This comprises an initial cash consideration of
£2.35m, with deferred cash consideration of £1.02m to be paid as £0.34m on
the first, second and third anniversaries following completion in each case
subject to the satisfaction of certain conditions. Completion is expected to
take place on 2 June 2023.

The cash consideration for both acquisitions will be satisfied from Knights'
existing bank facilities.

Both acquisitions align with Knights' strategy to bolster its future organic
growth through selective, considered acquisitions. They provide access to new
important regional markets and platforms for further growth through the
recruitment of local talent and potential bolt-on acquisitions. Post
completion, Knights will have five offices in the North West and two offices
in the North East of England, which alongside Knights' three existing offices
in Yorkshire, strengthen the Group's presence and brand reputation across the
North.

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

"We are delighted to announce the acquisitions of St James' Square and Baines
Wilson, which provide us with entry into two important strategic growth
markets in the North of England and complements our existing presence in the
region. Strong cultural fit with Knights is a key criteria in our M&A
strategy, and both firms are well aligned with the St James' Square senior
team already very well known to our Teesside team. In addition, both operate
in key centres in their respective regions, providing significant organic
growth opportunities through the recruitment of high-quality  talent."

Paul Monaghan, Managing Partner, St James' Square commented:

"We are excited to be joining Knights, whose reputation and reach will allow
us to enhance our client service offering and ability to recruit from
Newcastle's deep pool of talent. We already have strong relationships with the
well-respected Knights team in Teesside and look forward to working together
more closely to capitalise on the significant market opportunity in the North
East of England."

Sean Logue, Partner/Head of Partnership, Baine Wilson commented:

"Having grown to become one of the leading firms in the North of England, we
are thrilled to be joining Knights, a firm which champions client service and
shares our vision. As part of a larger group, offering a wider range of
services and scale, we are confident that we will be able to accelerate our
growth in Carlisle, Lancaster and the surrounding region."

- ENDS -

Enquiries

 Knights
 David Beech, CEO                                Via MHP Communications

 Numis (Nomad and Broker)
 Stuart Skinner, Kevin Cruickshank               020 7260 1000
 MHP Group (Media enquiries)
 Katie Hunt, Eleni Menikou, Rob Collett- Creedy  020 3128 8147

07736 464749
                                                 knights@mhpgroup.com

 

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 23
offices located in Birmingham, Brighton, Bristol, Cheltenham, Chester,
Crawley, Exeter, Leeds, Leicester, Lincoln, Maidstone, Manchester, Newbury,
Nottingham, Oxford, Portsmouth, Sheffield, Southampton, Stoke, Teesside,
Weybridge, Wilmslow and York.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  ACQBCGDUSBGDGXB