Gordon Dadds unveils first post-flotation acquisition

Biles: Deal will provide further opportunities for cross-selling services

Gordon Dadds has started making good on its promise to be acquisitive, with the recently listed law firm announcing the purchase of a corporate tax advisory business for up to £8m.

City-based CW Energy LLP (CWE) describes itself as the leading independent corporate tax consultancy to the oil and gas industry.

The deal – funded from existing cash resources – is for a total initial consideration of £4m, payable in cash over five years. More will be payable for the goodwill where CWE’s fees exceed the warranted minimum of £13m over the same period.

Additional consideration at lower rates will be payable on fees earned between the fifth and tenth anniversaries of completion. The total consideration is capped at £8m.

“These provide a real incentive for the key CWE personnel to remain closely involved,” the firm told the stock exchange.

“This acquisition is in line with the company’s strategy for acquisitions as set out in the August 2017 admission document and will further the company’s intention to expand its tax advisory business which touches all of the group’s business divisions.

“The board expects that the acquisition will be immediately earnings enhancing.”

In the year ended 31 March 2016, CWE – which has three partners and six employees – reported a loss of £4,000 after partners’ remuneration. The announcement said that if the arrangements for members’ remuneration had been included on the same basis as that agreed for the future, CWE’s EBITDA for the year would have been £1.3m.

CWE will continue to operate from its existing offices under its own name. Its administrative and support functions will move onto the Gordon Dadds Group’s systems.

“This mirrors the approach successfully adopted with the group’s successful acquisition of the Alen-Buckley LLP business [a firm of south London solicitors] in June 2017,” the announcement said.

Adrian Biles, chief executive officer of Gordon Dadds, said: “CW Energy is a highly regarded and highly profitable business which will enhance the group’s activities and will provide further opportunities for cross-selling services within the group.

“Such acquisitions ensure that Gordon Dadds is always providing a premium service which caters to all our clients’ needs.

“Since the flotation, we have received a number of approaches to make acquisitions and also for lateral hires. We have a good acquisition pipeline which will enhance earnings and the reach of the group.”

CWE managing partner Phil Greatrex added: “We believe this enhances the long term sustainability of our business. We are excited to be working with Adrian and his team to broaden our client base and develop new commercial opportunities.”

Adrian Biles will be speaking at the Legal Futures Innovation Conference on 21 November in London. See here for all the details.

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