Beech: Adding scale outside of London
National firm Knights yesterday announced its 24th acquisition since listing in 2018 with a £16.6m deal for Essex law firm Birkett Long that will take its annual revenues to over £200m.
Planting its flag in the county for the first time – Birkett Long has offices in Colchester, Chelmsford and Basildon – the acquisition also includes the firm’s independent financial advisory business, a first for Knights.
In the year ended 31 May 2024, Birkett Long generated revenues of £14.7m, with a corporatised profit before tax (PBT) of £1m. A team of 91 fee-earners, as well as 15 staff at Birkett Long IFA LLP, will move over.
The latter will “provide an entry point into financial advisory, which Knights has long considered a complementary service line and growth opportunity”, a stock exchange announcement said.
“Following the acquisition, post integration and full realisation of synergies, Knights expects the business to operate at a low double-digit PBT margin.
“The acquisition is expected to be immediately earnings enhancing and will take Knights’ annualised revenue to over £200m…
“The business is a strong fit culturally and operationally, given its similar private client, real estate and business service lines, giving confidence in a smooth integration.”
The selling partners will receive an initial £10m in cash, with a further £2.2m to be paid on each of the first, second and third anniversaries, subject to “certain conditions” being met. Completion is expected to take place on 13 June for Birkett Long, and later for the IFA business given the need for Financial Conduct Authority consent.
Knights chief executive David Beech said: “This deal significantly expands Knights’ presence in the South-East, adding scale in areas immediately surrounding London, and provides an entry into wealth advisory, a complementary service which has been of interest to Knights for some time.
“We are confident that without the constraints of independent ownership and building on its growth in recent years, the acquisition will deliver further organic growth in the region.”
Martin Hopkins, managing partner of Birkett Long, added: “Being part of a business of scale will allow us to build on our track record by continuing to grow revenues across both the law firm and the IFA business, allowing us to provide a broader range of services to our regional clients along with even more career opportunities for our professionals.”
In March, Knights announced its biggest acquisition to date, £30m for South-East practice IBB Law. The deal completed last month.
Knights’ share price has been becalmed over the last couple of years, with our review of listed legal businesses showing it ended 2024 at 105p, 6p lower than where it started, but it is making strides this year and closed yesterday at 150p.
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