Gordon Dadds Group PLC Acquisition of Thomas Simon Limited (2041F)

TIDMGOR

RNS Number : 2041F

Gordon Dadds Group PLC

19 February 2018

19 February 2018

Gordon Dadds Group plc

("Gordon Dadds" or the "Group")

Acquisition of Thomas Simon Limited

Gordon Dadds Group plc (AIM: GOR), the acquisitive legal and professional services business, is pleased to announce that it has completed the acquisition of Cardiff solicitors, Thomas Simon Limited ("Thomas Simon") for GBP1.875 million plus an amount related to net tangible assets.

Thomas Simon's business will be merged with and will complement that of Gordon Dadds' existing Cardiff business, trading under the Gordon Dadds name. Cardiff is the back-office hub for the Group and has had a growing front office established 5 years ago targeted at property, family and private client work and providing a "near shore" service for the rest of the Group.

Gordon Dadds' enlarged Cardiff operation will be a significant firm in the Cardiff business community and the acquisition is in line with the Company's stated strategy for acquisitions as set out in the August 2017 admission document.

The board expects that the acquisition will be earnings enhancing for the first full year, to 31 March 2019.

Summary of Thomas Simon's business

Thomas Simon is a well-established law firm whose main business areas are property (predominantly commercial), corporate, dispute resolution, private client and family. For the year ended 31 July 2016, Thomas Simon achieved unaudited profit before tax of GBP0.43 million on fee income of GBP2.09 million.

Gordon Dadds recently moved its central Cardiff client facing business into new modern offices in anticipation of further expansion. Thomas Simon's business will be merged with Gordon Dadds' business in the new offices. The support functions for Thomas Simon's business enhance the Group's back office capacity and will be merged with Gordon Dadds' own support functions.

Summary of the acquisition terms

The Group is acquiring the whole of the issued ordinary share capital of Thomas Simon for a cash consideration of GBP1,875,000 (payable as to GBP187,500 on completion and 20 quarterly instalments thereafter) plus an amount related to that realised for debtors and work-in progress, payable quarterly as realised, and other net tangible assets. The vendors of Thomas Simon have warranted that the fee income will be not less than GBP12.5 million over those five years and any shortfall will reduce the consideration on a GBP for GBP basis.

Commenting on the acquisition Adrian Biles, Chief Executive Officer of Gordon Dadds, said:

"We have been looking to expand our Cardiff front office operation so as to become a significant player in the Cardiff community and we are delighted to have been able to merge our Cardiff office with Thomas Simon's, blending different skill sets to enhance the Gordon Dadds' offering and grow the enlarged business. In addition, we should achieve economies of scale from merging the support functions over time."

"This is the fourth acquisition we have made since Gordon Dadds' successful IPO in August 2017 and each of them should enhance next year's earnings."

"We shall be focussing over the coming months on realising the benefits of these acquisitions and, in particular, on driving the cross-selling activity which grows the revenue and profitability of the existing and acquired businesses"

Rupert Thomas, Chairman of Thomas Simon, added:

"This is a rare opportunity to create a new force in the solicitor's market in Cardiff and I am looking forward to working with Adrian and his team to realise the opportunity."

FOR FURTHER INFORMATION, PLEASE CONTACT:

 
 Gordon Dadds Group plc            Via Newgate 
  Adrian Biles, Chief Executive 
  Officer 
  Christopher Yates, Chief 
  Financial Officer 
 
 Arden Partners, Nominated 
  Adviser and broker to 
  the Company 
  John Llewellyn-Lloyd 
  Ciaran Walsh                     [phone] 
 Newgate Communications            [phone] 
  Adam Lloyd                        Email: [e-mail] 
  James Ash 
 

NOTES:

Gordon Dadds Group plc is an acquisitive legal and professional services business headquartered in London with a significant back office and technology platform based in Cardiff.

The Group targets firms of all sizes and will merge the business into the Gordon Dadds brand or allow a firm to retain their identity and culture but benefit from the back-office technology platform used by Gordon Dadds, enabling the targeting of law firms seeking an alternative solution to the regulatory and investment requirements of the UK legal market.

Gordon Dadds LLP has been operating in this way since 2013, successfully integrating firms into its cost efficient platform.

Please visit www.gordondaddsgroup.com for more information.

This information is provided by RNS

The company news service from the London Stock Exchange

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February 19, 2018 02:00 ET (07:00 GMT)