The first law firm to list in its own right on the London Stock Exchange has made its first acquisition since becoming a PLC.
National firm Gateley today announced it bought tax incentives advisory business Capitus for a total of £2.72m. The deal includes £1.59m in cash, funded out of the group’s existing cash resources, and 1,122,753 ordinary shares in the company. The shares are locked in for three years.
The new business, renamed Gateley Capitus, is the first new addition to the group since the firm floated on the stock exchange in June 2015.
Founded in 1997, Capitus serves UK institutional property investors and developers, including hotel groups and technology companies.
According to Gateley’s announcement, Capitus had a turnover of £1.38m in the year ending 30 June 2015, with an operating profit of £593,000. The Gateley board expects the acquisition to be ‘immediately earnings enhancing’.
Gateley said the addition will open new and growing markets and diversify income streams. The stock exchange announcement added that Capitus’ management ‘believe that recent changes to tax legislation in the UK will lead to further increased demand for expert advice in these areas’.
Gateley chief executive Michael Ward (pictured) said: ‘Its addition to the group is in line with the strategy we outlined at flotation last June, to make selective acquisitions which offer complementary specialist services.
‘Capitus is a recognised and highly respected tax incentives advisory business and I am particularly excited by the additional expertise and cross referral opportunities the business will bring.’
The deal is understood to be the first merger between a full-service national law firm and a firm regulated by the Royal Institute of Chartered Surveyors, which oversees qualifications and standards in land, property and construction.
‘We have, for some time, realised that having access to high-quality legal expertise, particularly in the areas of real estate, construction and tax, would enhance the quality of services that we can offer our clients,’ said Capitus co-founders Kevin Meyer and Aubrey Calderwood.
‘We are confident that this shall help us achieve our aim of becoming the number one fiscal incentives practice in the UK.’