Gateley acquires property insurance claims specialist Smithers Purslow to expand platform business
Deal could be valued as high as £20m, Gateley’s largest acquisition to date
UK AIM-listed legal and professional services firm Gateley has acquired chartered surveying and structural engineering company Smithers Purslow as it seeks to further expand its property platform.
Gateley will pay an initial £12.15m for the business in a part-share, part-cash deal, potentially rising to £20m based on Smithers’ financial performance over the next two years. Smithers’ core business specialises in property insurance claims, helping resolve high value claims for insurers, policy holders and their advisers. The business will continue operating as a standalone entity, renamed Gateley Smithers Purslow and led by current managing director Stephen Fraser and senior director Andrew Bussey. Smithers has 10 regional offices across the UK and employs 130 people.
Rod Waldie, Gateley’s chief executive officer, said: “Smithers Purslow’s growth over the last decade has been impressive and it is a highly regarded market leader in the property insurance claims sector, in which we see significant opportunity to develop broader and deeper relationships with insurers and insurance intermediaries.”
Smithers has posted compound annual revenue and EBITDA (earnings before interest, tax, depreciation and amortisation) of more than 20% over the past five years. Revenue grew 22.3% last year to £11.7m, resulting in adjusted pre-tax profit of £2.5m.
The acquisition is Gateley’s largest to date and is part of the group’s broader platform strategy of buying and growing complementary professional services businesses.
Waldie added the deal is a demonstration of that commitment to invest and grow its platform business, as well as to continue to strengthen its resilience through diversification away from traditional legal services.
The acquisition adds to recent deals including the purchase of Belfast-based reputation management and media law boutique Paul Tweed for £2m in 2020 and quantity surveyors Tozer Gallagher in 2021.
Gateley’s share price responded positively to the latest acquisition, trading almost 1% higher at £2.13 a share.
Last month, offshore firm Ogier merged with eight-partner Dublin outfit Leman, the latest firm to enter the Irish market in the wake of the UK’s exit from the EU. Also last month, Clyde & Co and BLM agreed a UK-focused merger to grow their combined insurance capabilities, in a deal set to add almost £100m to Clydes’ top line.