Gordon Dadds completes £4m acquisition of CW Energy

London-based legal and professional services business Gordon Dadds Group has completed the acquisition of the corporate tax advisory business and certain assets of CW Energy for a total initial consideration of £4m, payable in cash over a five-year period, it announced on Wednesday.

The AIM-traded company said additional consideration could also be payable, dependent on the performance of the business.

It confirmed the acquisition would be funded from existing cash resources.

“This acquisition is in line with the company's strategy for acquisitions as set out in the August 2017 admission document, and will further the company's intention to expand its tax advisory business which touches all of the group's business divisions,” the Gordon Dadds board said in its statement.

The board expected that the acquisition would be “immediately” earnings enhancing.

It described CWE as a corporate tax advisory firm based in the City of London.

It was reportedly established in 1990 by a team of professionals who had previously worked together in the corporate tax department of one of the ‘big four’ accounting firms.

It specialises in the oil and gas industry, working with blue chip clients, as well as advising on other aspects of UK and international taxation.

In the year to 31 March 2016, a loss of £4k was reported after partner remuneration.

If the arrangements for member remuneration had been included on the same basis as that agreed for the future, CWE's EBITDA for the year would have apparently been £1.3m.

CWE has since then continued to trade at “materially the same level”, Gordon Dadds said, with a total of three partners and six employees.

The firm would continue to operate from its existing City of London offices under its “well-established” name.

Its administrative and support functions would move onto the group's systems,, mirroring the approach adopted with the acquisition of the Alen-Buckley business in June.

“I am delighted to have completed our first acquisition after Gordon Dadds' successful IPO in August,” said Gordon Dadds CEO Adrian Biles.

“CW Energy is a highly regarded and highly profitable business which will enhance the group's activities and will provide further opportunities for cross-selling services within the group.

“Such acquisitions ensure that Gordon Dadds is always providing a premium service which caters to all our clients' needs.”

Biles said that since the flotation, the company had received “a number” of approaches to make acquisitions and also for lateral hires.

“We have a good acquisition pipeline which will enhance earnings and the reach of the group.”

Phil Greatrex, managing partner of CWE, added that the company was “delighted” to join the Gordon Dadds group.

“We believe this enhances the long term sustainability of our business.

“We are excited to be working with Adrian and his team to broaden our client base and develop new commercial opportunities.”