The world’s first listed legal practice, Australia’s Slater & Gordon (S&G), is to enter the UK market after agreeing to buy national law firm Russell Jones & Walker (RJW) for £53.8 million, it was announced to the Australian Stock Exchange today.
The deal is subject to the Solicitors Regulation Authority granting an alternative business structure licence.
All of RJW’s principals will continue to work in the new business and are becoming shareholders in S&G.
S&G will incorporate a wholly owned subsidiary company in the UK, Slater & Gordon UK Ltd, to manage its operations here. RJW chief executive Neil Kinsella will become chief executive of S&G’s UK business. All senior RJW management will continue in their current roles.echo adrotate_group(14, 0, 0, 0);
S&G is paying £36.4 million in cash – of which £8.8 million will be deferred for up to two years subject to performance milestones and £10.3 million will be used on completion to repay bank debt of the RJW partnership – and the issue of £17.4 million in Slater & Gordon shares, which is subject to restraints on sale for a minimum period of four years post completion.
RJW has around 425 staff across 10 locations, and about 60% of its revenue is in personal injury litigation. It also has a strong employment law practice and a growing practice in family law. The acquisition includes RJW’s Claims Direct brand.
Slater & Gordon is forecasting that for the 2013 financial year, the first full year in the Slater & Gordon group, RJW’s revenue will be £53m, with earnings before interest, tax depreciation and amortisation (EBITDA) of £10.9m.
Slater & Gordon managing director Andrew Grech said: “The UK market is inherently attractive to us because of its size and its jurisdictional similarities to Australia which the recent changes
bring even closer into line.
“We have the huge advantage of having a five-year head start in operating in a listed environment and we can bring that experience to the UK through a kindred firm in RJW which has the business structure and the people to exploit that advantage.”
Mr Kinsella said: “Slater & Gordon is the ideal partner for us. We share similar histories and business ethos and we have spent the past 12 months, while negotiations have been underway, collaboratively developing a strategy to make the most of the changes taking place in the UK from a legal regulatory and legal services market perspective.
“Slater & Gordon publicly listed five years ago, which gives us a five-year head-start on any UK firm considering this option.
“We have jointly identified the opportunities that will come as a result of the changes in the UK market and have already benefited from sharing our knowledge. The potential to share technology and have greater resources to retain and attract additional talented people will underpin our future success.”
Mr Kinsella said that one of the things that “positively differentiates” RJW is that Claims Direct provides an “additional and valuable route to the UK market”. He explained: “That gives us a lot more flexibility to shape the overall business to best suit the new market dynamics.
“Our ambition is to become known as the most trusted brand for personal legal services in the UK. Joining forces with a leading and innovative law company will give us a lead on all of our competitors.”
The cash component of the consideration for the acquisition will be funded from the Slater & Gordon debt facility, which has been increased to A$160m (£108m) to cover the transaction and to provide headroom to fund the continued growth of the Australian business.
Subject to regulatory approval, the transaction is expected to be completed in early April. The business will trade as ‘Russell, Jones & Walker part of Slater & Gordon Lawyers’ from that date.
- Andrew Grech will be the keynote speaker at the next Legal Futures Conference, to be held in London on 23 April. Tickets will be available later this week