Ince's UK offices acquired by Gordon Dadds in pared-down takeover
Firm's international network excluded from revised £27m deal
January 02, 2019 at 06:58 AM
4 minute read
Gordon Dadds has completed a deal to acquire Ince & Co's UK assets for £27.3m in a pared-down takeover that does not include the firm's international offices.
The takeover – the value of which has been revised down from an earlier estimate of £34m – marks the end of a long and complex journey that has seen Ince transform from a private, traditional business to a public entity as part of the listed Ince Gordon Dadds.
The £27.3m consideration comprises a £12.3m payment to settle Ince's capital and current account balances – down from an earlier estimate of £9.1m – and an expected £15m goodwill payment "equivalent to a percentage of the turnover generated in the first three years by the Ince partners joining Gordon Dadds".
The revised deal will no longer be classified as a reverse takeover, as had been originally proposed in October last year, and does not include Ince's affiliate international offices in Germany, Greece, Dubai, Singapore and Hong Kong.
However, those bases have agreed to enter into new network arrangements with Ince Gordon Dadds and will continue to trade as Ince & Co.
Ince's Shanghai and Beijing practices are included in the acquisition as they are part of the UK limited liability partnership; however, the firm's four French bases in Paris, Marseille, Monaco and Le Havre have been excluded from the deal altogether.
Former Ince partners and other shipping partners in the French market have told Legal Week that the firm's lawyers in the country are currently assessing their options, with talks over moves to new firms thought to be under discussion.
Ince Gordon Dadds said it had not been able to reach agreements with the international offices ahead of the 31 December target date for the merger, and that obtaining local regulatory approvals for any such arrangements would not have been possible.
As to the reasons for the revisions to the deal, managing partner Adrian Biles (pictured) told Legal Week: "As Mike Tyson said, everyone's got a plan until they're punched in the face. You've got to be flexible and nimble in such a deal."
Biles said that at this stage he "did not know" what would become of the France offices, adding that "international networks are complicated, unwieldy animals".
Gordon Dadds listed on AIM last year via a reverse takeover of marketing company Work Group. Ince's 24 UK equity partners will all join the newly combined firm, and will be held to an 18-month lock-in. According to Ince's latest financial results, the assets being acquired generated fees of £30.5m in the year ending 30 April 2018.
Gordon Dadds is funding the deal with a new three-year term loan of £6m and a three-year revolving £6.5m credit facility.
Having suspended its shares in September with a view to seeing the Ince acquisition through, Ince Gordon Dadds resumed trading today (2 January).
Alongside the announcement of the deal, the firm has also published the unaudited financial results for Gordon Dadds for the six months to 30 September 2018. Following a series of acquisitions during the last financial year – including corporate tax consultancy CW Energy and fintech specialist White & Black – revenues rose by 56% to £20.1m, while operating profits were up 23% to £4.3m.
The combined firm's strategy for the next 12 months will centre around integrating the two firms, which Biles described as a "100% focus". Biles added that the combined firm would look to make the most of Ince's international footprint, which he said was a "large part of why we wanted to do the deal".
"There is a lot of work to do, but the IT is done, the new website has been launched, we're integrating the IT and moving our people from our Covent Garden office to the Aldgate office this weekend – so we'll mostly be under one roof by next week."
Separately, Gordon Dadds litigation partner Dean Nicholls has left the firm to join Memery Crystal. Nicholls had spent the last four years as a partner in the firm's litigation and dispute resolution team, after a long career at now-collapsed Harris Cartier.
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