The U.K.’s first publicly listed law firm has continued its post-IPO expansion, acquiring property consultancy Hamer Associates for $2.68 million.
It is the second deal that national midmarket firm Gateley has completed since it listed its shares on AIM, a submarket of the London Stock Exchange designed for smaller companies, in June 2015. It follows the firm’s acquisition of tax incentives advisory business Capitus Ltd for $3.6 million in April.
Gateley management told law.com at the time of the Capitus transaction that the firm was targeting other complementary professional services businesses, particularly consultancies in areas such as HR and town planning, which would work alongside the firm’s existing practices in employment and real estate.
Birmingham-based Hamer, which will now operate as Gateley Hamer, specializes in advising property developers on the removal of utility infrastructure, such as pipes electricity pylons, from development sites. It also acts for promoters, landowners and businesses on compulsory purchase issues relating to major infrastructure projects, such as the High Speed 2­, a planned high-speed rail line linking Birmingham and London, and Crossrail, an east-west underground commuter rail link.
The firm said in a statement that Hamer generated revenues of $1.6 million and operating profit of $382,000 in the fiscal year that ended March 31.
Gateley raised $45 million via its flotation last summer, valuing the firm at more than $150 million. Gateley has used the proceeds of the transaction to expand its business. It launched a new office last December in Reading, a large town to the west of London that it says is of growing importance to its regional U.K. clients. It also used the proceeds to build working capital.
Traditional partnership law firms are effectively unable to retain any earnings at the end of each fiscal year. Except for any planned investments, all remaining profit, what The American Lawyer refers to in its Am Law 100 and Global 100 surveys as “net income,” is distributed among the equity partners in full.
The firm recently announced that its revenue increased 10 percent, to $88.6 million, during its first year as a public company.
Gateley is one of several U.K. law firms taking advantage of a change in legislation permitting professional investors and nonlawyers to hold equity stakes in law firms.
Northwest U.K. regional firm Knights, which has a referral relationship with Hogan Lovells that sees it handle some of the global law firm’s lower-value work, has increased its revenue by 400 percent since it became the first British law firm to take on external investment in 2012. Knights has used the funding to take over the Chester office of Hill Dickinson, one of the U.K.’s leading national firms, and earlier this year acquired medical and clinical negligence claims specialist Darbys Solicitors in a deal that doubled its total head count and revenue.