A listed professional services firm has announced agreement on a £30m revolving credit facility - and spent some of it almost immediately on its largest acquisition to date. 

Gateley plc told the London Stock Exchange yesterday that the facility was split between Bank of Scotland and HSBC UK and would last until August 2025.

It replaces the company’s existing £8m overdraft facilities with the same banks, with interest on the loan payable at 1.95% above the daily sterling overnight index average (SONIA) benchmark rate.

Gateley said the extra borrowing will allow the firm ‘additional headroom’ to grow organically and through acquisitions.

That plan was effected straight away, as the company today announced the acquisition of multi-disciplinary firm Smithers Purslow in a deal which could eventually be worth £20m. Gateley will pay an initial £12.5m, split between 56% in shares and 44% in cash.

Gateley office shot

Gateley said the extra borrowing will allow the firm ‘additional headroom’

Source: Gateley

Smithers Purslow is a chartered surveying practice, comprising building and quantity surveyors and civil and structural engineers. It specialises in resolving high value claims for insurers, policy holders and their advisers. The business, operating from 10 offices with 130 staff, reported revenue of £11.7m and adjusted profit before tax of £2.5m for the year ended September 2021.

Rod Waldie, Gateley chief executive, said: 'This is our largest acquisition to date and is a clear demonstration of our commitment to invest and grow our market-facing platforms, as well as to continue to strengthen our resilience through diversification.'

The Gateley group has yet to declare any trading update ahead of the end of its financial year at the end of this month. Full accounts are usually announced to the stock market in May or June. Last year the group recommended dividend payments to shareholders in line with its policy of distributing up to 70% of profit after tax.

In common with other listed firms, Gateley has grown over the past year through acquisitions, bringing in chartered quantity surveyors and construction consultants Tozer Gallagher for £700,000 and IP specialist Adamson Jones for £2.5m. Adamson Jones was the eleventh business Gateley had acquired since its IPO in 2015.

Shares in Gateley Holdings plc rose 4.7% to 220p on the news.