Gateley uses share power to acquire tax incentives business

Listing: shares part-finance deal

Listing: shares part-finance deal

Gateley has made its first acquisition as a listed company, using shares to finance part of the £2.7m purchase of specialist tax incentives advisory business Capitus.

The business, which is to be renamed Gateley Capitus, made a £593,000 profit on a £1.38m turnover in its last financial year, and Gateley said it expected the acquisition to “be immediately earnings enhancing”.

Gateley is paying £1.6m in cash, along with 1.1m shares. The firm’s share price has stayed pretty steady since listing last June at 95p, and was up 3% in early trading today to 103.5p.

Established in 1997, Capitus advises institutional and professional investors on their commercial property transactions, and has offices in London, Warwickshire, Northern Ireland and the Republic of Ireland.

Gateley said there were estimated to be around £96bn of ‘unclaimed’ allowances in the UK, while recent changes to tax legislation would lead to “further increased demand” for expert advice.

It told the stock exchange: “The acquisition of Capitus is consistent with Gateley’s growth strategy to acquire businesses offering complementary professional and other specialist services to clients in Gateley’s target markets. Capitus has developed a strong blue chip client base of national and global companies which provide regular, repeat business.

“The addition of Capitus to the Group also provides Gateley with expertise in a range of tax incentives, opening up attractive and growing markets and diversifying the Group’s income streams. A number of new business opportunities have already been identified within the Group’s existing real estate and tax practices.”

Gateley Capitus will operate as a wholly owned subsidiary, overseen by an operating board made up of senior management from both businesses.

Gateley CEO Michael Ward said: “Capitus is a recognised and highly respected tax incentives advisory business and I am particularly excited by the additional expertise and cross referral opportunities the business will bring to the group.”

In a statement, Capitus’s founders, Kevin Meyer and Aubrey Calderwood, said: “It provides us with an excellent platform for our continued growth and allows us to expand the range of services that we offer. We have, for some time, realised that having access to high quality legal expertise, particularly in the areas of real estate, construction and tax, would enhance the quality of services that we can offer our clients.

“Our tie up with Gateley, which we believe to be the first between an RICS regulated firm and a full service national law firm, gives us access to this expertise and provides us with many additional commercial opportunities. We are confident that this shall help us achieve our aim of becoming the number one fiscal incentives practice in the UK.”

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