Simpson Millar vendors receive £3m earn-out after hitting targets


Stock exchange: Fairpoint shares on upward curve

Stock exchange: Fairpoint shares on upward curve

The shareholders who sold national law firm Simpson Millar to Fairpoint Group plc in June 2014 have received their full £3m earn-out after the practice exceeded its first-year financial targets.

Fairpoint paid an initial £7m in cash – on a debt-free, cash-free basis – and 1.4m shares in the group. In addition, there was provision for the payment of an earn-out of up to £6m based on the financial performance of Simpson Millar for two 12-month periods ending June 2015 and June 2016, with a maximum of £3m payable in each year.

This additional consideration is payable in 50% cash and 50% shares.

In a statement released to the stock exchange today, Fairpoint said: “Simpson Millar’s financial performance has exceeded the challenging financial hurdles set for the first earn-out period ended 30 June 2015 triggering the maximum earn-out for the period.

“Accordingly, the group has today paid £1.5m in cash and issued 1,061,647 earn-out Shares at the previously agreed price of 141p per share to the vendors of Simpson Millar. The vendors will be restricted from dealing in the 1,061,647 earn-out shares issued until after 30 June 2016.

At the time of acquisition last year, the shares were priced 134p; as of this morning, they were 180p.

Fairpoint has since acquired Bristol-based family law firm Foster & Partners and, last month, Colemans-ctts, meaning legal services now accounts for 62% of the company’s revenue. It recently announced that revenue for the first half of 2015 was up 64% to £23m, with gross profit up 21% to £4.1m.

Legal services accounted for £11.3m and £1.4m of the profit, which amounted to single-digit growth compared with Simpson Millar’s performance in the first half of 2014 pre acquisition.

Fairpoint said its “mission within legal services is to make law more accessible to consumers” and as part of this it has introduced fixed fees for over 70 “legal products”.

The company told investors when issuing the results that it was in a “strong position to continue to develop the legal services platform organically and through further acquisition supported by an enlarged £25m financing facility”.




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


GEO – the impact of AI on digital marketing for law firms

GEO represents the biggest change in online business generation that I can remember. You cannot afford to stick with the same old engine optimisation techniques.


What the law can learn from fintech’s onboarding revolution

Client onboarding has always been slow. It’s not just about the paperwork and manual workflows; it’s also about those long AML checks and verifications.


Civil enforcement – progress at last with CJC report

‘When do I get my money?’ is a question that litigators acting for successful parties are used to fielding. The value of judgments is of course in the recovery made.


Loading animation