Former owners of national firm Simpson Millar have secured a £3m payout after meeting performance targets.
The firm was acquired in June 2014 by stock exchange-listed entity Fairpoint PLC for an initial £9m in cash.
The deal promised a further £6m – split over two years and payable in cash and shares – based on how the firm performed.
Fairpoint today announced to the London Stock Exchange that Simpson Millar’s financial performance has ‘exceeded the financial hurdles’ set for the period ending 30 June 2016, triggering the maximum earn-out.
The group has paid £1.5m in cash and issued 1,061,647 earn-out shares at the previously agreed price of 141p per share to the sellers of Simpson Millar.
The vendors will be restricted from dealing in the earn-out shares issued until after 30 June 2017.
While Simpson Millar has performed well, the Fairpoint share price has tumbled in recent months.
A year ago shares were trading at 185p per share, but the value would drop by around 20p following the announcement of George Osborne’s proposed reform of the personal injury market.
Since then, however, the share value has dropped significantly, dipping to a year-long low of 65p per share earlier this month. The share price dropped 4% to 66p per share following today’s announcement.
Fairpoint, which also acquired Colemans in August 2015, reported last month to the stock exchange that net debt had risen to £15.6m by the end of June.
This was up from £5.2m in June 2015.
Legal services for the company, which previously focused on debt management, is now the biggest revenue driver, accounting for 76% of group income.
The half-year financial figures showed profit before tax slipping from £4.1m in the first half of 2015 to £4m in the first six months of this year.