Law Firms

Knights expands into North East with acquisition of law firm

The acquisition comes in line with Knights’ strategy to ‘accelerate’ its organic growth through ‘carefully targeted acquisitions which are a strong cultural fit’

Knights, a legal and professional services business in the UK, has announced that it has agreed to acquire Archers Law LLP (Archers), an independent law firm based in Stockton-on-Tees. 

The acquisition sees 38 fee earners joining Knights and it will be Knights’ 17th location, expanding the legal services’ presence into the North East region which is reportedly one of the largest markets outside of London for legal and professional services in the UK. 

The acquisition of Archers is in line with the group’s strategy to “accelerate” its organic growth through “carefully targeted acquisitions which are a strong cultural fit”.

In its unaudited accounts for the year ended 31 March 2021, Archers reported revenue of £4m with a corporatised PBT margin of circa 20%. 

Knights said that, following full integration and realisation of all synergies, the board expects Archers to contribute a PBT margin of circa 30%. Combined with a typical level of revenue churn post-acquisition, Knights said the acquisition is expected to be immediately earnings enhancing. 

Under the terms of the acquisition, Knights will acquire Archers from its four existing equity partners on a debt free, cash free basis for a total consideration of £5.2m, subject to working capital adjustments at the time of completion. 

This comprises an initial consideration of £3.7m, made up of £2.1m in cash and £1.6m in 395,060 new ordinary shares in Knights. The cash consideration will be satisfied from Knights’ existing facilities and completion is expected to take place on 26 November 2021. 

David Beech, CEO of Knights, said: “We are delighted to announce the acquisition of Archers, a leading law firm in Teesside which further expands our footprint into the North East, a region currently undergoing significant public and private investment. 

“The acquisition allows us to build on the existing strong presence we have established in Yorkshire in recent years and provides a compelling platform for future organic growth in the North East, as we cement our position as the leading legal and professional services business outside London.” 

Chris Todd, partner at Archers said: “After over a century of growth to become one of the leading law firms in Teesside, we are delighted to join Knights, whose culture is closely aligned to ours. 

“We look forward to executing on the significant growth opportunities in the North East as part of a larger group, which will allow us to offer greater resources and capabilities to our clients in the region and beyond.”

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