Knights expands East of England presence with £11.5m deal


Cross: Significant growth potential 

Listed law firm consolidator Knights announced its 16th acquisition in three and a half years yesterday and adding Lincoln to its locations in an £11m deal.

It is buying York and Lincoln firm Langleys, which had revenues of £14m in its last financial year and a profit-before-tax margin of 5%, a figure Knights said it expected to increase to 20% following full integration.

The deal means 72 new fee-earners for Knights, but the future of 69 others – 64 who work in Langleys’ volume residential conveyancing business, Home Property Lawyers Ltd, and five in its legal aid child law team – is uncertain.

In its stock exchange announcement, Knights said: “These businesses are included in the transaction perimeter but are non-core to Knights and as such the strategic options for them will be reviewed.” They represent about a third of Langleys’ revenues.

Knights said Langleys’ real estate and corporate offerings were “closely aligned with Knights’ existing services”, while there was “significant growth potential” in its private wealth focus.

The new Lincoln presence also fits Knights’ strategy of targeting secondary legal locations. It already has an office in York.

Langleys’ four equity partners are being paid an initial £8m – made up of £5.25m in cash and £2.75m in shares – along with deferred cash consideration of £3.5m to be paid in equal instalments over the next three years. Completion is expected to take place on 25 March.

Knights chief executive David Beech said: “The acquisition sees us become the leading law firm in York and provides a strong base for organic growth in the East of England through Lincoln, as we continue to strengthen our position as the leading legal and professional service business outside of London.”

Langleys partner Tim Cross said: “Having built a strong reputation over a number of years, now is the right time to join Knights, whose growth journey we have followed in York and elsewhere across the regions.

“We believe Knights’ scale, ambition and ability to invest will enable us to unlock significant growth potential and we look forward to achieving this as part of a larger group.”

Earlier this month, Knights reported that its revenue increased by 29% to £60m in the six months to 31 October 2021.

Of this increase, £9.1m came from the four acquisitions completed in the previous six months, with £4.4m (9%) relating to organic growth.

Its gross margins increased to from 46.4% to 48%, with underlying profit before tax up 26% to £7.6m. But the underlying profit before tax margin fell slightly to 12.6%.




Leave a Comment

By clicking Submit you consent to Legal Futures storing your personal data and confirm you have read our Privacy Policy and section 5 of our Terms & Conditions which deals with user-generated content. All comments will be moderated before posting.

Required fields are marked *
Email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Blog


Keeping the conversation going beyond Pride Month

As I reflect on all the celebrations of Pride Month 2024, I ask myself why there remains hesitancy amongst LGBTQ+ staff members about when it comes to being open about their identity in the workplace.


Third-party managed accounts: Your key questions answered

The Solicitors Regulation Authority has given strong indications that it is headed towards greater restrictions on law firms when it comes to handling client money.


Understanding vicarious trauma in the legal workplace

Vicarious trauma can happen to anyone who works with clients who have experienced trauma such as domestic or other violence, child abuse, sexual assault, torture or being a refugee.


Loading animation