Following failed merger talks with Maclay Murray & Spens, Addleshaw Goddard is making another play for the Scottish market, seeking to acquire HBJ Gateley‘s three Scottish offices in Aberdeen, Edinburgh and Glasgow.
Both firms confirmed the discussions today (14 November), and said in a statement the merger was subject to approval by both partnerships, which will reach a decision in coming weeks.
HBJ Gateley, which is not part of the English PLC due to rules around Alternative Business Structures in Scotland, had turnover of £21.9m in in 2015/16, making it the eighth biggest Scottish firm.
On Friday (11 November) Gateley confirmed that the relationship between the English and Scottish businesses would end in May next year. Gateley Plc and HBJ Gateley first joined forces in 2006.
A spokesperson for Gateley said: ‘Gateley Plc in England and HBJ Gateley in Scotland have announced today that their long-standing business relationship will come to an end in May next year. Until then, both firms will continue to work together in the best interests of all clients.’
Added to Addleshaws’ top-line revenue of £201.8m in 2015/16, the deal has the potential to create a business worth around £220m, which is unlikely to propel Addleshaws much further up the LB 100. However the firm has been clear that it wants to make £250m in fee income by the financial year 2017/18, which a HBJ Gateley takeover would help achieve.
Addleshaws managing partner John Joyce said: ‘A combination would deliver on both firms’ aspirations for improved client and sector offerings across the whole of Great Britain. We are culturally aligned and bringing both businesses together will enhance each firm’s bench strength, give greater flexibility and provide a more robust platform from which to establish stronger market positions across core practice areas and in the financial services and real estate sectors in particular.’
Addleshaws has long wanted a presence in the Scottish market, with merger talks between the firm and Maclays called off in February this year.
In May, the firm turned to the US for a potential merger partner, and is believed to be in talks with Virginia-based Hunton & Williams.
According to the latest AmLaw 100, Hunton & Williams has 696 lawyers and 167 equity partners across 19 offices in the US, Europe and Asia. In 2015 it posted gross revenue of $528m, a 7% drop on 2014.
Top 25 UK firm Addleshaws saw a turnaround this financial year, after a period dominated by internal discord, management changes and falling revenues. The last year saw the firm post revenue growth of 12%, up from £171m in 2013/14 to £193m – the highest levels since 2007/08. Profits per equity partner (PEP) was up 26% to £491,000.
Read more in: ‘Better together? – Those Anglo-Scots unions in focus‘