DWF has continued its expansionist strategy following last year’s initial public offering (IPO), dipping into its war chest to acquire managed services company Mindcrest in a £14.2m deal announced today (29 January).
Chicago-based Mindcrest offers managed services across contract management, compliance, legal analytics, litigation and investigations for international corporates. The majority of the business’s staff are based in Pune, India, where it has operated for over 15 years, but smaller offices are spread across Chicago, New York and London. The business has expected sales of £9.2m for the 2019 financial year.
‘It’s about growth and our stated strategy of building a global managed services business,’ DWF CEO of managed services Mark Qualter told Legal Business. ‘It also de-risks it for us, as Mindcrest is a proven business and serves our global operations. The geography works for us, as we can serve the US, Europe and down into Australia.’
DWF also anticipates the acquisition will allow the firm to pursue new revenue streams and achieve cost savings of up to £2.9m for the 2022 financial year, with the business’s Pune office providing an established low-cost legal services and outsourcing location. The deal is structured so DWF will pay £1.8m in cash and £6.5m in shares which will be payable upon completion, while £5.9m will be exchanged in deferred cash. When finalised, DWF will have offices in 33 locations with an overall headcount of around 4,200.
The move is the latest in a string of post-IPO plays by the firm. In December, DWF announced the acquisition of 40-partner Spanish law firm Rousaud Costas Duran in a £42.5m deal, the firm’s largest to date. The announcement came alongside DWF’s half-year results, with revenue for the six months to 31 October growing 10% to £146.8m, of which organic growth was said to be 7%.
The firm’s first splash came earlier in May of last year, when it acquired K&L Gates’s 11-partner Warsaw office. Later in October it also brought its post-float sales pitch to Germany after opening its fourth base in the country in Düsseldorf.
However, according to Qualter, further acquisitions in the managed services space are likely: ‘During our IPO process we talked about achieving global centres. We were looking at Pune, which we have now done, and Chicago, which we have now done. We were also looking at Australia which we are working on and central Europe which we’re looking at.’