Helphire Group Plc Acquires the New Law group of companies
Further to the recent strategic fundraising which the Group completed at the end of December 2013, Helphire announces the acquisition of a leading legal firm.
The Group has agreed to acquire the New Law group of companies comprising New Law Legal Limited ("New Law") and its associated companies and partnership interests (the "New Law Group"). The requisite regulatory approvals have been received and the completion process is expected to commence on 28 February 2014.
Information on the New Law Group
The New Law Group is a group of high quality legal services firms operating primarily in the area of road traffic personal injury and providing other consumer-related services including wills and probate. The New Law Group also includes companies involved in the provision of medical reports, costs drafting and advice in relation to employment law.
The Group has worked closely with the New Law team over the past five years in the processing of personal injury claims and has been impressed with the high quality and ethical standards of their work and the integrity of their people.
Unaudited management accounts for the year ended 31 December 2013, prepared on an IFRS basis indicate that, in aggregate, the New Law Group achieved a profit before tax of £7.0 million on sales of £29.4 million. On the same basis, the aggregated net assets of the New Law Group were approximately £14.7m on that date.
During 2013 New Law has entered into a number of ABS arrangements with various insurance and fleet management partners. Helphire intends that this part of the business model will continue to be expanded in conjunction with its own strategy to develop its legal services offering to a larger customer group.
Information on the Acquisition
The consideration for the acquisition of the shares of the New Law Group will be satisfied by the payment at completion of approximately £24.5 million in cash and, subject to the achievement of EBITDA targets for the years ended 31 December 2013 and 2014 respectively, by way of the issue of new Helphire ordinary shares ("Helphire Shares") with a value of up to £10.5 million. Helphire will also acquire net external working capital debt and shareholder loans of approximately £8.2 million, most of which will be settled on or after completion.
The new Helphire Shares will be issued in tranches commencing upon the determination of the EBITDA performance for the year in question, which is expected to be during April 2014 and March 2015 respectively, at a price set by reference to the volume weighted average price of Helphire's shares in the period up to those dates. The first tranche of Helphire Shares and a proportion of the second will be subject to a 12 month lock in followed by a 12 month orderly market arrangement.
In addition to supporting the Group's strategy of widening its range of legal services the acquisition is expected to be earnings enhancing and cash generative which continues to support the Group's cash dividend policy which is to distribute as much of the Group's profits by way of dividend as it can, taking account of prevailing circumstances and other requirements or commitments.
Martin Ward, Chief Executive of Helphire commented:
"After working with New Law for many years, we are delighted to have secured a first class and well-established legal services business together with its management team. This addition to the Helphire group supports our strategic direction to broaden the scope of services we offer in related markets and we look forward to building on our more recent success".
Helen Molyneux, Chief Executive of New Law commented:
"We chose Helphire as a partner because it has established quality credentials, the right approach to business, both strategically and culturally, and a shared vision of the future. The legal services market has undergone enormous change over the last two years which has opened up new opportunities for different businesses to work together in this sector. The combination of Helphire and New Law represents a rewarding and exciting opportunity for the combined businesses."