LONDON, UK: Knights Group is among the fastest-growing professional and legal services firms has accepted to purchase Langleys Solicitors LLP, an established law firm that is independent located in York as well as Lincoln.
In the context of the acquisition Knights will purchase Langleys from its four current equity investors on a debt-free cash-free basis for a total amount in the amount of PS11.5m subject to adjustments to working capital upon the acquisition.
It is comprised of an initial payment of PS8m. It is consisting from PS5.25m as cash plus PS2.75m in 704,515 brand new ordinary shares of Knights Group, along with deferred cash considerations that is PS3.5m which will be paid out in equally installments over three years after the conclusion of the transaction.
The cash payment is financed by Knights existing facilities. The completion is expected to occur on March 25, 2022.
Langleys Solicitors, established in 1890, has brought 72 fee-earners to Knights and significantly strengthens the presence of the group in York.
This acquisition could enable the Group to expand its operations into and around the East of England by providing the opportunity to enter Lincoln which is a promising market to grow for professional and legal services..
The purchase of Langleys is in accordance with the Group’s plan to speed up its organic growth with carefully planned acquisitions that have a strong cultural connection and the company’s corporate and real estate services closely aligned with Knights existing offerings. Langleys has particular strengths in private wealth, an area where there is huge growth potential.
Langleys also runs a legal aid for children (CL) business that is part of Langleys LLP and a volume residential conveyancing company through a subsidiary called Home Property Lawyers Limited (HPL) with five and 64 fee-earners respectively. These companies are part of the transaction perimeter , but aren’t core to Knights and therefore the strategic options available to them will be evaluated.
In its accounts that were not audited for the period ending 31 March 2021 Langleys had reported a total revenue of cPS14m and a corporatised PBT profit margin of 5 percent. Around two thirds of revenues are derived from the main Langleys company (excluding those of the HPL and CL business).
After full integration and realization of all synergies Board believes that the core business will contribute an average PBT margin of 20 percent. This, in conjunction with the typical amount of revenue churn after acquisition this means that the acquisition will increase earnings immediately.
Commenting on the acquisition David Beech, CEO of Knights and Knights’ CEO, said: “We are delighted to announce the acquisition of Langleys which is a prominent firm with a solid connection to the culture of Knights and has a deep understanding that is in line with our current services. The deal will make us the top legal firm in York and will provide a solid base for organic growth within Lincoln and the East of England through Lincoln and as we work to consolidate our position as the most reputable professional and legal service provider beyond London.”
Tim Cross, Partner, Langleys Solicitors commented: “Having established a solid reputation over the past few years, this is the moment to join Knights which has seen their growth accelerate. we have been following through York and across other regions. We are convinced that Knights size and ambition as well as their ability to invest will allow us to tap into substantial growth potential, and we are looking forward to making this happen as part of the larger Group.”