Hudson: Shareholding diluted despite buying 2.8m more shares
A listed multi-disciplinary business supporting the asset management industry – which started life as a law firm – has raised £9.2m from a placing and retail offer.
Nearly 31m new shares in MJ Hudson (MJH) were admitted to trading on AIM yesterday, on top of the 173m already out in the market.
Often ignored as one of the listed law firms, MJH started in 2010 as a niche City private equity and corporate law firm, became an alternative business structure in 2014. The following year, it started buying non-legal businesses and listed in 2019, continuing its acquisitive path.
It now has 345 staff in eight offices in the UK, Europe and US, serving more than 1,000 clients globally, including 18 of the FTSE 100. Organised into three divisions – advisory, outsourcing, and data & analytics – its reliance on advisory work like legal advice has decreased significantly. From making up 65% of MJH’s turnover in 2019, it is now just 27%.
Founder and chief executive Matthew Hudson bought 2.8m new shares but his shareholding was still diluted to just under 25% of the company.
The proceeds of the fundraise will be used to invest in and support the development of its “fast-growing” ESG (environmental, social and governance) division and “pay deferred consideration to high-performing acquisitions”.
The firm said it also wanted to improve its net debt position and strengthen “its ability to capitalise on future acquisition opportunities”.
Speaking when the share offer was made earlier this month, MJH chairman Geoff Miller said: “MJ Hudson has experienced a period of significant financial and operational progress, and we are delighted with the positive response we have now received, from both new and existing investors, for our plans to accelerate growth in our ESG business and to support the wider group.”
This reflected the company’s “significant success achieved to date, and the scope of the opportunity we see ahead of us in the alternative investment markets”, he continued.
“Underpinning this, our reputation as a market leading provider of full-service solutions continues to grow with fund managers and institutions across the major asset management and funds hubs of the US and Europe.
“This has all been facilitated by the investment and acquisitions we have made, and the successful delivery of our IPO strategy.”
MJH expects to report adjusted EBITDA of £8.3m for the year to 30 June 2022, more than three times the figure from 2019.
However, its share price has been drifting downwards for some time; having listed at 57p, the shares fell before returning to that level just over a year ago. However, they have since fallen to 24.5p as of yesterday.
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