Irwin Mitchell has secured a £60m four-year finance package with an additional £30m ‘accordion’ facility with HSBC, Lloyds and Royal Bank of Scotland to fund its strategic plan to grow its business ‘substantially’.
The package, which replaces the bank’s current overdraft, includes a £30m buffer facility for further finance if required and has been agreed with HSBC’s Yorkshire corporate team as the lead provider, along with Lloyds Bank Commercial Banking and Royal Bank of Scotland.
The announcement comes after an 18-month period in which Irwin Mitchell became the first multiple-licensed ABS in the UK; announced it would open its ninth regional office in Southampton in April; and completed five acquisitions, including, most recently, Manchester-based volume legal services provider HL Interactive through debt legal services arm Ascent.
Irwin Mitchell’s most recent LLP accounts revealed that debt at the firm rose almost 25% from £13.7m to £17m at the end of last year, while cash at bank and in hand rose from £1.5m to £2.7m in the same period.
Turnover grew moderately, up around 3% from £187m to £192m, while profit available for discretionary division among members remained static at around £24m, with the average number of equity partners having jumped by 54% from 63 at the end of the 2011/12 financial year to 97.
In a statement, group chief executive John Pickering (pictured) described the financing package as a clear show of support from the firm’s banks and a demonstration of Irwin Mitchell’s strong financial position at a difficult time for other parts of the legal sector.
Pickering said: ‘The fact that we have been able to agree this facility with our banks at a time when the legal sector faces some real challenges demonstrates the strength of our business financially.
‘Our investment to date in acquisitions and recruitment has been a real signal of our intention to take advantage of the right opportunities when they arise. We will continue to seek out those opportunities.’
Chief financial officer Andrew Merrick, who joined the firm in April 2013 from airline and logistics firm Dart Group, said that the £60m package will enable the firm to invest in further growth opportunities which fit with the firm’s ‘clear strategic plan’, although the firm would not go into specifics.
‘The accordion facility is there if we need it and only if a substantial opportunity arises, but the fact we have this facility to call on is again a clear demonstration of the confidence our banking partners have in this business,’ said Merrick.
‘To commit themselves for four years is a positive sign of how well our financial position is regarded and we are now clearly well-resourced to deliver our strategic growth plan and take advantage of opportunities arising in the sector.’
Other recent acquisitions for the firm include PI firm MPH in November and also two firms through its Ascent arm – adding to the acquisition of PDP at the end of 2012. However, the firm recently lost its place on National Grid’s law firm panel for debt recovery work, replaced by Shakespeares.
Irwin Mitchell also made 15 partner-level appointments into its business legal services (BLS) division in 2013, including former Pinsent Masons disputes head Nigel Kissack, who joined as national head of commercial litigation last October. In January, Irwin Mitchell appointed tax partner Phil Berwick from Pinsent Masons and corporate partner Nick Dawson from DWF.