Biles: Endorsement of Ince deal
Listed law firm Gordon Dadds ended up raising 15% more than the minimum it hoped for from yesterday’s share placing, even though the move wiped a quarter off the company’s value.
After announcing the ‘accelerated bookbuild’ [1] at the start of the day, by the end it had completed the placing and raised £11.5m (before expenses), having said it wanted a minimum of £10m.
The aim was to give Gordon Dadds greater liquidity to continue with its acquisition strategy, having spent the £14m set aside for acquisitions that was raised when it listed in August 2017.
At 140p – the original listing price – the placing was discounted 25% from Tuesday’s closing of 189p, and as a result the firm’s share price tumbled to 143.5p by yesterday’s close.
The new shares represent 22% of the firm’s enlarged share capital, meaning existing investors’ holdings will be significantly diluted.
The price has stabilised today and, at the time of writing, had inched back up to 148.5p.
The placing is conditional upon shareholder approval and it is expected the new shares will be admitted to trading on 12 February.
Chief executive Adrian Biles said: “We are delighted to see such high-quality institutional support for Gordon Dadds.
“This is an endorsement of the recent acquisition of Ince UK and the attractiveness of our business model and strategy for investors.
“We have refined our acquisition strategy to UK firms with over £10m of annual fee income, international acquisitions which will add to the depth of our core business and smaller acquisitions which can be absorbed into existing offices, increasing the intellectual capital of the group through niche specialisms and promoting cross-selling.”
The firm told the London Stock Exchange yesterday that there were “many other opportunities in the sector” and its acquisitions pipeline included target businesses in Malta, Gibraltar, South Africa, China, Hong Kong and Bermuda.
A spokesman for the firm added: “We expect to be able to announce some transactions and partner acquisitions before the end of the first quarter.”