Acquisition of Mundays LLP

Knights Group Holdings plc

("Knights", the "Company" or the "Group")

Acquisition of Mundays LLP

Knights strengthens South East presence with acquisition of independent law firm

Knights, the UK's fastest growing legal and professional services business ¹, today announces that it has agreed to acquire Mundays LLP ("Mundays"), an independent commercial law firm based in Surrey.

Acquisition rationale and background

The acquisition of Mundays strengthens Knights' presence in the South East, in line with the Group's strategy to accelerate its organic growth through carefully targeted acquisitions which are a strong cultural fit.

Established over sixty years ago in Weybridge, Mundays is a full-service independent law firm with a strong corporate, real estate and private client offering. The acquisition sees 34 fee earners joining Knights, increasing the Group's presence in the South East region which it entered in March 2020.  

In its unaudited accounts for the year ending 31 July 2020, Mundays reported revenue of £7.9m and it is budgeting revenue of £6.9m in the year to 31 July 2021, with a corporatised PBT margin of c.6%  in both years. Following full integration and realisation of all synergies, the Board expects Mundays to contribute a PBT margin of circa 18% which, combined with a typical level of revenue churn, means the acquisition is expected to be immediately earnings enhancing.

Terms of the acquisition

Under the terms of the acquisition, Knights will acquire Mundays from its six existing equity partners ("the Sellers") on a debt free, cash free basis for a total consideration of £5.3m, subject to working capital adjustments at the time of completion. This comprises an initial consideration of £3.93m, made up of £2.68m in cash and £1.25m in 289,908 new ordinary shares in Knights (the "Consideration Shares"), along with deferred cash consideration of £1.375m to be paid in instalments of £0.75m and £0.625m over the two years respectively following completion. The cash consideration will be satisfied from Knights' existing facilities.  Completion is expected to take place on 16 April 2021.

Commenting on the acquisition, David Beech, CEO of Knights, said:

"We are pleased to announce the acquisition of Mundays, a well-regarded full-service independent law firm. Having met a considerable number of their team, we can see that Mundays will have a strong cultural fit with Knights.  It brings a high-quality team of lawyers, for whom Knights offers broader opportunities within a larger, more diversified business. 

"The acquisition of Mundays further builds our position in the South East, providing a strong platform from which to recruit talented lawyers that no longer wish to commute into London, as we continue to grow our national presence."

Neale Andrews, Managing Partner, commented:

"We are delighted to join Knights, who's reputation for high quality service combined with a modern approach to legal services resonates well with our ambitious team and ethos. Having built a strong and diverse client base over recent years, we look forward to being part of a larger group with the resources to execute on ambitious growth plans, offering exciting career opportunities to our team."

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Notes

¹ Ranked number one for revenue growth over the last four years in the recently published Lawyer's Top 100 Survey

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Notes to Editors

Knights is a fast-growing, legal and professional services business, ranked within the UK's top 100 largest law firms by revenue. Knights was one of the first law firms in the UK to move from the traditional partnership model to a corporate structure in 2012 and has since grown rapidly. Knights has specialists in all key areas of corporate and commercial law so that it can offer end-to-end support to businesses of all sizes and in all sectors. It is focussed on key UK markets outside London and currently operates from 14 offices located in Birmingham, Cheltenham, Chester, Crawley, Exeter, Leeds, Leicester, Maidstone, Manchester, Nottingham, Oxford, Stoke, Wilmslow and York.