Listed company Integrated Legal Holdings has announced plans to acquire Perth-based Wojtowicz Kelly Legal in a deal valued at more than $600,000.
Listed company Integrated Legal Holdings has announced plans to acquire Perth-based Wojtowicz Kelly Legal in a deal valued at more than $600,000.
The acquisition will be achieved by a merger with Brett Davies Lawyers which is already owned by Integrated Legal Holdings.
The merged firms will become Civic Legal.
WK was established in 1994 and has a range of legal services including commercial, property, litigation, family, migration advice, local government law and conveyancing.
BDL has operated in Perth for 15 years specialising in tax, succession planning, estate planning and superannuation.
In a statement to the Australian Securities Exchange, Integrated said that the WK has an annual income fee of about $5.3 million.
Under the agreement, the merged firm will have four Principals, approximately 54 staff and an annual income fee of more than $7.5 million.
The transaction is a combination of the issue of approximately 5.7 million Integrated shares at 11 cents per share and an undisclosed cash.
See Integrated statement below:
The Directors of Integrated Legal Holdings Limited ("Integrated" or "the Company") are pleased to advise that the Company has reached in-principle agreement to acquire the legal business of Wojtowicz Kelly Legal (incorporating Civic Legal, the Simpson Kelly Group, Gibson Tovey & Associates, All Property Conveyancing and Jan Simpson Settlements) ("WK") under merger arrangements with the existing member firm Brett Davies Lawyers (incorporating Law Central) ("BDL").
WK is an established and well regarded Perth CBD based commercial law firm delivering services to commercial enterprises and private individuals predominantly in Western Australia, but also to enterprises based in Southeast Asia with Australian interests.
WK was established in 1994 and has developed a range of legal services including corporate and commercial, property, litigation, family, migration advice, local government law and settlements (conveyancing).
WK also has an office in Rockingham south of Perth, and a representative office in Singapore.
The firm consists of three Partners, Gavan Kelly, Anthony Quahe and John Wojtowicz, with 40 staff, and annual fee income of approximately $5.3m.
WK will merge with existing member firm BDL, with the merged firm having four Principals, approximately 54 staff and annual fee income of more than $7.5m.
BDL has operated in the Perth CBD for over 15 years and is a specialist in tax, succession planning, estate planning and superannuation. BDL has a national client base and focuses on accountants, financial planners and lawyers.
BDL incorporates the Company's Law Central division, an internet based business providing on line purchase of legal documents since 2000. Law Central provides preparation and publishing of documents as well as an information service, predominantly for do it yourself users.
The merged business will trade as Civic Legal while Law Central will retain its brand. The four Principals (Anthony Quahe, Brett Davies, Gavan Kelly, and John Wojtowicz), all of whom are committed to growing the merged business within the Integrated Group, will act as the senior management team for the business.
Under the merger plans, the Company's existing BDL business will be relocated and integrated into the nearby offices of WK.
The transaction is consistent with Integrated's strategy of supporting the growth and expansion of a limited number of core member firms into major businesses with competitive advantages through the scope and scale of their operations, as part of a listed group.
The Directors believe that WK is a quality business with strong growth prospects and that the merger will provide a platform for further growth. In particular, the Company expects to generate earnings improvements through cross referral of client matter opportunities.
Transaction Details
The consideration for the transaction is a combination of the issue of approximately 5.7m Integrated shares at 11 cents per share and cash. The acquisition is structured with significant employment constraints and conditions, consistent with the Company's disciplined acquisition model and strict criteria.
The transaction is expected to be effective from 1 February 2011 and is subject to completion of legal documentation.
Comments
The Directors of Integrated expect the transaction to be materially EPS positive in the 2012 financial year and will enhance the Company's growth prospects.
In accordance with the Integrated model, the Company does not acquire debtors and work in progress as part of the acquisition. Consequently, the Directors note that the Company will invest funds from operations in the build up of working capital (including debtors and work in progress) post acquisition to normal levels.
Overall, the Directors are pleased with the progress and performance of the Company. Integrated has strong future growth prospects and the acquisition is a further important step in the implementation of the Company's strategic plan.
The Directors are confident in the longer term outlook of the Company given the strength and underlying quality of its existing member firms, the significant potential to grow organically and the opportunities for selective acquisitions as part of the strategy of developing a national network of legal services businesses.
