Hitchcock: Clear opportunity for consolidation
Another private equity business has entered the legal market with a £30m pot to create a new group and has made Midlands firm FBC Manby Bowdler its first acquisition.
Horizon Capital said it has established Adeptio Law Group “to execute a strategy to build a leading national legal services group through the acquisition of regional law firms”.
Horizon is dedicated to ‘buy and build’ strategies in technology and services businesses worth up to £100m in enterprise value, and through its various investments has made over 125 add-on acquisitions since it opened for business in 2018.
FBC is a full-service law firm employing over 200 staff. It is headquartered in Wolverhampton and has five other offices in the West Midlands, Shropshire and Worcestershire, in part thanks to acquisitions it has made over the past five years.
Its most recent annual results, for the year to 31 March 2024, reported an operating profit of £5.7m on a turnover of £16.5m, respectively 28% and 13% more than the previous year.
Horizon said in a statement: “FBC represents the first acquisition for Adeptio Law Group, which operates in an attractive and growing market which is highly fragmented, driven by strong tailwinds due to increasing levels of compliance and technology adoption.
“A significant consolidation opportunity exists and Horizon Capital is keen to support the business in playing a leading role in that consolidation.
“Horizon Capital is committing £30m of equity capital to the group and will take a majority stake, supporting Neil Lloyd and the team as they execute an ambitious plan that combines continued organic growth and investment in technology with a number of complementary acquisitions within the West Midlands and beyond.”
Mr Lloyd – not to be confused with the Neil Lloyd who runs Lawfront, the more established private equity-owned group of regional law firms – will be chief executive of Adeptio Law Group. He joined FBC in 2015 as sales director and became managing director in 2020.
Martin Smith, who has experience in working at various private equity-backed businesses, joins at completion as group chairman.
Alongside Horizon Capital’s investment, HSBC has provided debt finance for the transaction and a committed facility for acquisitions.
Simon Hitchcock, managing partner of Horizon Capital, said: “We are excited to be investing in the legal services market which has strong organic growth drivers, in addition to presenting a clear opportunity for consolidation.
“We sourced the FBC opportunity through extensive mapping of the sector over the past 24 months and selected the business because of its diverse service range, investment in technology and its leading position in the West Midlands market.
“We are excited to be working with Martin Smith and Neil Lloyd to accelerate the growth of the business nationally.”
Mr Lloyd said Horizon has “a strong track record in supporting companies such as ours to accelerate both organic and acquisitive growth” and would help FBC “build on the success” of its growth in recent years.
Leave a Comment