Listed international firm DWF today announced the acquisition of a legal outsourcing business for a deal which could be worth £14.2m.
The company told the London Stock Exchange it had reached a definitive agreement to buy privately held Mindcrest with a mixture of cash and shares, with the deal expected to complete within six weeks.
Mindcrest is headquartered in Chicago but the majority of its 360 workforce are in Pune, India, offering litigation support, contracts, compliance and legal analytics for large international corporate clients.
DWF said today its purchase will create a more efficient cost base, enabling annual savings of £2.9m by 2022.
Group chief executive Andrew Leaitherland said: ‘Managed services continues to be a real differentiator for DWF, and Mindcrest will provide the resources to better support our clients globally by meeting their requirements where and when they need them.’
DWF will pay £1.8m in cash and £6.5m in shares at completion, with deferred payments of £5.9m over the following six months. Mindcrest managers will be subject to a clawback on their earnings from the sale if they leave within two years.
As part of the transaction, the group will assume £1.6m of net debt, including £1m payments to Mindcrest shareholders on completion.
The 5m shares issued under the deal are locked in for two years and will be released in two equal tranches to the sellers following the announcement of the company’s financial results in 2021 and 2022.
In the financial year to 31 December 2019, Mindcrest is expected to declare a pre-tax profit of £900,000 on a turnover of £9.2m.
DWF shares remained unchanged this morning at 127.2p.