West End firm Gordon Dadds has made its first strategic acquisition since its public float in August, acquiring tax advisory business CW Energy for £4m to ‘further the company’s intention to expand its tax advisory business’.
The sum of £4m will be paid equal annual installments over five years and further consideration may be payable depending on the performance of the business. According to a London Stock Exchange announcement made today (1 November), Gordon Dadds has paid £300,000 upon completion of the deal and expects the acquisition to immediately enhance earnings at the firm.
The announcement also states that CW Energy, which specialises in the oil and gas industry, has three partners and a total of six employees. In the year ending March 2016 the business lost £4,000 after remunerating its partners but the AIM announcement added: ‘If the arrangements for members remuneration had been included on the same basis as that agreed for the future, CWE’s EBITDA for the year would have been £1.3m. CWE has since then continued to trade at materially the same level.’
Adrian Biles, Gordon Dadds CEO said that since the flotation the business has received ‘a number of approaches to make acquisitions and also for lateral hires’ and has a ‘good acquisition pipeline’.
He added: ‘CW Energy is a highly regarded and highly profitable business which will enhance the group’s activities and will provide further opportunities for cross-selling services.’
The acquisition follows a busy summer for Gordon Dadds, which publicly listed in August following a reverse takeover by Work Group.
Speaking to Legal Business at the time, Biles said that there was £14m of cash on the balance sheet to fund both legal and non-legal acquisitions following the float.
Gordan Dadds posted revenues of £25m for the financial year ending March 2017, up 24% from last year’s figure of £20.2m.
According to Work Group’s announcement, since 2013, Gordon Dadds LLP has grown from £2.7m to £22.8m, equating to an annual growth rate of 71%.