Knights, which has offices in Leeds and York, said the acquisition of Mundays will strengthen its presence in the South East. This is in line with the group’s strategy to accelerate its organic growth through carefully targeted acquisitions which are a strong cultural fit.
Established over 60 years ago, Mundays is a full-service, independent law firm with a corporate, real estate and private client offering. The acquisition will see 34 fee earners joining Knights, increasing the group’s presence in the South East region which it entered a year ago.
David Beech, CEO of Knights, said: “We are pleased to announce the acquisition of Mundays, a well-regarded, full-service independent law firm.
“Having met a considerable number of their team, we can see that Mundays will have a strong cultural fit with Knights. It brings a high quality team of lawyers, for whom Knights offers broader opportunities within a larger, more diversified business.
“The acquisition of Mundays further builds our position in the South East, providing a strong platform from which to recruit talented lawyers that no longer wish to commute into London, as we continue to grow our national presence.”
Neale Andrews, Mundays’ managing partner, added: “We are delighted to join Knights, whose reputation for high quality service combined with a modern approach to legal services resonates well with our ambitious team and ethos.
“Having built a strong and diverse client base over recent years, we look forward to being part of a larger group with the resources to execute on ambitious growth plans, offering exciting career opportunities to our team.”
Analyst Rachel May at Shore Capital said: “Post integration, management expects Mundays to generate a pre-tax profit margin of around 18 per cent, after the usual revenue churn (typically 20 per cent), meaning the acquisition is expected to be immediately earnings enhancing.
“Assuming 20 per cent revenue churn, once fully integrated, we would expect Mundays to generate around £1m on an adjusted pre-tax profit level for the group.
“Management had previously said it expected to ‘execute an attractive acquisition pipeline’, with ‘Covid-19 accentuating the opportunities available’.
“The large number of local independent firms lacking the resources/scale advantages to invest in technology and operational efficiencies to remain competitive is likely to drive further value enhancing acquisitions for Knights, which has established itself as the main consolidator in the market outside of London.”