13 July 2023

DSW CAPITAL PLC

("DSW Capital", "DSW" or the "Group")

(AIM: DSW)

New Licence and Corporate Recovery Service Line

DSW supports the MBO of Bridgewood Financial and takes its Fee Earners to 107

DSW Capital, a profitable, mid-market, challenger professional services licence network and owner of the Dow Schofield Watts brand, is pleased to announce that it has provided loans totalling £880,000, of which £100,000 will be a working capital loan, to support the MBO of Bridgewood Financial Solutions Ltd ("Bridgewood"), a corporate recovery business, with 10 Fee Earners, based in Nottingham. This deal takes the Group's total licensees to 23 and its Fee Earners to 107.

Bridgewood will become part of the DSW Network, rebranding as DSW Bridgewood, and DSW Capital will receive licence fee income for the use of the DSW brand. 

As licensor, DSW will receive interest income, a licence fee (based on a percentage of DSW Bridgewood revenue) and a share of its profits. The minimum contracted return from DSW Bridgewood is £130k in each of the first three years following completion. 

In addition to the 10 new Fee Earners, including three partners, the business brings a further four business development managers. 

James Dow, Chief Executive Officer, said:

"I am delighted to welcome the Bridgewood team to the DSW network. The transaction broadens and strengthens DSW's counter-cyclical offering and gives the Group its first office in the Midlands, which will help to raise the Dow Schofield Watts profile in that region, increasing the likelihood of further Fee Earners joining the Network.

"Expanding into the Midlands has been a key area of focus for the Group and the Directors are keen to develop other service lines here. Having an existing team in this location provides a platform to accelerate growth in the region, and will be a focus for recruitment, which is already connecting us with promising candidates to expand our offering in the region."

Robin Tarling, Managing Director, Bridgewood Financial said;

"The buy-out is an ideal scenario for all concerned. It enables our two other partners, Andrew Smith and Tom Grummitt, who are key members of the leadership team, to take a stake in the business and gives us the autonomy to pursue our growth plans going forward, while providing a return for our seed investors.

"Being part of the Dow Schofield Watt network will also give us access to a strong support team and bring opportunities to expand our services, including into other types of advisory work and commercial financial broking.

"It has been a smooth, timely and seamless process with DSW. They have been responsive, quick to understand our business model, and their emphasis on strong cultural synergies was critical in informing our decision to join the network."

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About DSW Capital

DSW Capital, owner of the Dow Schofield Watts brand, is a profitable, mid-market, challenger professional services network with a cash generative business model and scalable platform for growth. Originally established in 2002, by three KPMG alumni, DSW is one of the first platform models disrupting the traditional model of accounting professional services firms. DSW operates licensing arrangements with 23 licensee businesses with 107 fee earners, across eight offices in England and two in Scotland. These trade primarily under the Dow Schofield Watts brand.

DSW's vision is for the DSW Network to become the most sought-after destination for ambitious, entrepreneurial professionals to start and develop their own businesses. Through a licensing model, DSW gives professionals the autonomy and flexibility to fulfil their potential. Being part of the DSW Network brings support benefits in recruitment, funding and infrastructure. DSW's challenger model attracts experienced, senior professionals, predominantly with a "Big 4" accounting firm background, who want to launch their own businesses and recognise the value of the Dow Schofield Watts brand and the synergies which come from being part of the DSW Network.

DSW aims to scale its agile model through organic growth, geographical expansion, additional service lines and investing in "Break Outs" (existing teams in larger firms). The Directors are targeting high margin, complementary, niche service lines with a strong synergistic fit with the existing DSW Network.