9th Apr 2014 08:33
LONDON (Alliance News) - Fairpoint Group PLC Wednesday said it has reached an agreement to acquire Simpson Millar LLP Solicitors in a deal worth an initial GBP9 million in cash and shares, with a further earn-out consideration of up to GBP6million.
The provider of advice and solutions to financially stressed consumers said the acquisition of the consumer legal services business is part of its strategy to diversify its income streams into new sectors such as legal services. Fairpoint said the acquisition is expected to be immediately earnings enhancing on an adjusted basis.
Consideration for the proposed acquisition will be satisfied by the initial payment of GBP7 million in cash and the issue of 1.4 million new Fairpoint shares at a price of 141 pence per share, worth around GBP2 million.
A further consideration of up to GBP6 million will be payable by Fairpoint based on the financial performance of Simpson Millar for two 12-month periods ending June 2015 and June 2016. A maximum of GBP3 million will be payable in each 12 month period.
Leeds-headquartered Simpson Millar provides consumer-focused legal services with its main lines including: family, personal injury, and clinical negligence. It has over 250 employees based in 13 offices around the UK.
The proposed acquisition remains subject to approval by the Solicitors Regulation Authority. It is expected that this approval will be received, and the proposed acquisition will completed in Fairpoint's first half ending June 30.
The company said it will fund the acquisition through existing financial resources. However, to ensure appropriate funding for the enlarged group following completion, Fairpoint has credit-approved terms for a new five-year GBP20 million committed financing facility, which currently is in legal negotiations.
Fairpoint shares were trading at 140.00 pence Wednesday morning, down 2.50 pence or 1.8%.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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