Frk Us Inc Etf Regulatory News (INCE)

16 January 2018

Gordon Dadds Group plc

("Gordon Dadds" or the "Group")

Acquisition of White & Black Limited

Gordon Dadds Group plc (AIM: GOR), the acquisitive London-based legal and professional services business, is pleased to announce that it has completed the acquisition of specialist technology solicitors, White & Black Limited ("White & Black") for £2.918 million plus the amounts realised from £0.52 million of debtors and work-in-progress. White & Black has net cash of approximately £1 million. The acquisition will be funded from existing cash resources.

White & Black's specialist technology skills and international client base will enhance the Group's growing corporate and dispute resolution practices and provide many cross-selling opportunities. It is in line with the Company's stated strategy for acquisitions as set out in the August 2017 admission document.

The board expects that the acquisition will be significantly earnings enhancing for the first full year, to 31 March 2019.

Summary of White & Black's business

White & Black is a law firm specialising in technology and corporate law and related intellectual property and dispute aspects. It has a substantial international client base, with a particularly strong presence in the Far East, comprising mainly corporate, private equity and investment clients.

For the year ended 31 October 2017, White & Black achieved unaudited EBITDA of £0.85 million and a profit before tax of £0.66 million on fee income of £2.59 million.

White & Black will continue to operate as a separate business from London and Oxfordshire under its well established name.

Summary of the acquisition terms

The Group is acquiring the whole of the issued ordinary share capital of White & Black for a cash consideration payable as follows:

(i) £1.718 million on completion

(ii) £0.25 million in mid 2018

(iii) £0.50 million in mid 2019

(iv) £0.45 million in mid 2020

(v) Up to £0.52 million on realisation of White & Black's debtors and work in progress at 31 October 2017

Payments (iii) and (iv) above will be reduced on a £ for £ basis if certain profit targets are not met. However, the Directors believe these targets will be met.

White & Black also has A Shares in issue which are held by the vendors of the ordinary share capital. The A shares have a right to 30% of the profits (after tax) of White & Black in excess of £400,000 in each year. The Group has an option to acquire the remaining A shares between three and four years after completion and the holders will have the right to put those shares onto the Group between four and five years after completion. The exercise price for these options will be based on the relative EBITDAs of White & Black and Gordon Dadds and, at the Group's option, may be satisfied in cash or new ordinary shares in Gordon Dadds at the then market price. The Directors of Gordon Dadds regard the existence of these options, in addition to service contracts for the selling partners running to May 2020, as an incentive to the vendors to continue to drive the business forward.

Commenting on the acquisition Adrian Biles, Chief Executive Officer of Gordon Dadds, said:

"I am delighted to have completed our second focussed and specialist acquisition after Gordon Dadds' successful IPO in August 2017. White & Black Limited is a highly regarded and profitable business which will add to the Group's expertise in the Technology and Corporate space. It will also provide further opportunities for cross-selling services within the Group."

"This acquisition demonstrates Gordon Dadds' ability to attract profitable, growing businesses and the acquired White & Black brand will benefit from being part of the enlarged Group with access to a wider range of services.

"Gordon Dadds continues to receive approaches from potential acquisition targets to make acquisitions and has a good acquisition pipeline which will enhance skills, earnings and the reach of the Group."

Phil Riman, CEO of White & Black, added:

"We are excited to be working with Adrian and his team to further the development of our business and take us to the next stage. The increased range of services we have access to within Gordon Dadds will enable us to deal with a larger proportion of our clients' needs and those of their key people without any dilution of our specialist offering."

FOR FURTHER INFORMATION, PLEASE CONTACT:

NOTES:

Gordon Dadds Group plc is an acquisitive legal and professional services business headquartered in London with a significant back office and technology platform based in Cardiff.

The Group targets firms of all sizes except the very largest and will merge the business into the Gordon Dadds brand or allow a firm to retain their identity and culture but benefit from the back-office technology platform used by Gordon Dadds, enabling the targeting of law firms seeking an alternative solution to the regulatory and investment requirements of the UK legal market.

Gordon Dadds LLP has been operating in this way since 2013, successfully integrating firms into its cost efficient platform.

Please visit www.gordondaddsgroup.com for more information.