Stock exchange listed company Fairpoint Group today announced it has acquired established personal injury firm Colemans-CTTS in a deal valued at an initial £9m.
The group, which entered the legal market with the acquisition of national firm Simpson Millar last year, will increase headcount by around 200 and add 67 fee earners through the move.
Fairpoint was founded as a specialist in personal debt advice and debt management plans, but the acqusition means legal services will now account for 62% of group revenues.
The Colemans deal, which includes subsidiaries CT Support Services Ltd and Holiday TravelWatch Limited, is for an initial £8m in cash and the issuing of 755,516 shares, valued at £1m. Up to £7m more will be paid based on the performance of the firm in each of the next two years, half in cash and half in ‘earn-out’ shares.
Both the initial shares and the earn-out shares will be subject to a 12-month lock-in from the date of issue.
Chris Moat (pictured), chief executive of Fairpoint, said the acquisition of Colemans is an important step in the development of the group’s legal services platform.
'It brings particular class leading expertise in the areas of volume personal injury, conveyancing and travel services and gives strong impetus to our agenda of reshaping the group towards a broader professional services organisation,’ he added.
Colemans was founded in 1984 and has offices in Manchester, Kingston and Acton. In the financial year ending April 2015, the firm recorded estimated revenue of £19m and pre-tax profits of £2.3m. As of April 2015, the audited gross assets of Colemans were £18.4m.
Legal completion of the acquisition is expected to take place on 14 August following consultation with Colemans employees.
Fairpoint will fund the initial payment from its existing financial resources, but to finance future spending it will extend its current five-year debt facility from £20m to £25m. Net debt of the Fairpoint group is expected to be £13.2m.
Fairpoint bought national firm Simpson Millar for a deal valued at £15m last year and has made no secret of its ambitions to purchase more legal services providers. Assistance and due diligence on the latest deal was carried out by ZebraLC.