Listed law firm The Ince Group is to make a major diversification play by buying corporate adviser and stockbroker Arden Partners for £10m to expand its multi-disciplinary service to clients.
Arden has been at the forefront of advising on law firm flotations and indeed was the broker and nominated adviser on the listing in 2017 of what was then Gordon Dadds, now Ince, and has advised it since.
The pair told investors that there was “a compelling strategic and financial rationale” for the deal.
“The enlarged group will benefit from a significantly expanded client list and will be able to offer a broader range of services across all client relationships.
“Arden currently holds a list of over 40 retained public corporate clients, where there is little existing overlap with Ince, representing a clear opportunity for cross-selling of legal, consulting and corporate advisory services.
“Ince acts for over 1,000 corporates across public and private markets both in the UK and internationally. Many of these will consider fundraising and require corporate finance advice…
“The acquisition has the potential to increase the deal flow to the Ince legal services business significantly, especially in capital markets work.”
Ince said the deal would accelerate the growth of its corporate finance division, which was formally launched recently, and enhance its private client offering with Arden’s work for high net-worth clients.
Further, the acquisition “will provide a strong precedent for future add-on acquisitions in the wider legal and professional services sectors”, with the announcement describing both the legal and small cap investment banking markets as “highly fragmented”.
The deal is to be effected by means of a court-sanctioned scheme of arrangement. Under the terms of the acquisition, Arden shareholders will receive seven Ince shares for every 12 Arden shares.
Based on Ince’s Wednesday’s closing share price of 53p, the acquisition will value Arden shares at 31p, a premium of 41%. Upon completion, Arden shareholders will own approximately 21.6% of Ince’s enlarged issued share capital.
Adrian Biles, chief executive of Ince, said: “My team and I have been working with Donnie Brown and the Arden team since 2017 and we have developed a strong relationship of mutual respect.
“This deal is driven by client need. Clients in the UK and overseas are telling us that they want to streamline their advisory relationships whilst being able to access the London capital markets. This deal brings best in class professional services and investment banking together.”
Donald Brown, chief executive of Arden, added: “This deal is an important strategic development as it secures Arden’s position as an attractive adviser and broker able to offer a wider range of services and access to a larger client base as a result of being part of a more diversified entity.
“At the same time, this deal provides an ideal home for our loyal and talented employee base, many of whom are familiar with Ince as a result of our long-standing business relationship.”
Ince said it “anticipated cost saving synergies” of approximately £1m a year within three years, but no more than 1% of the workforce would be affected.