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Wilmington Acquires UK Accountancy Training, Compliance Specialist Swat for GBP 2.4m Plus Earnouts.

M2 EQUITYBITES-July 22, 2016-Wilmington Acquires UK Accountancy Training, Compliance Specialist Swat for GBP 2.4m Plus Earnouts


22 July 2016 - UK-based risk and compliance, finance, legal, and consulting firm Wilmington plc's (LSE: WIL) Mercia Group Ltd. accountancy business has acquired UK-based accountancy training and technical compliance support provider Swat Group Ltd., the group said.

The consideration will be settled by an initial cash payment of GBP 2.4m (USD 3.15m) and a deferred consideration payment of up to GBP 3.0m payable in September 2018 in cash subject to SWAT achieving challenging profit targets over the two financial years ending 30 June 2018.

On acquisition SWAT will have GBP 0.5m in cash.

Wilmington said it will finance the consideration out of the group's existing GBP 65m multicurrency debt facility and the acquisition is expected to be earnings enhancing in the first full year of ownership.

The acquisition of Swat which generates 50% of its revenue from subscription based products is consistent with Wilmington's strategy of acquiring complimentary businesses with high repeat revenues and strong, cash generative income streams in the group's key markets.

Swat will form part of Wilmington's Finance Division.

The business was formed as South West Accountancy Tutors in 1976 to provide training and compliance services to practising firms of accountants across Devon and Cornwall. Since then the Business has expanded its client base and now also has offices in Plymouth and London.

Swat will work alongside Wilmington's existing accountancy business, Mercia. The existing management team of SWAT, led by Adrian Gibbons and David Norris, will remain with the business and, along with four other individuals, comprise the vendors of Swat.

Approximately 50% of SWAT's revenue is derived from training and the balance from information technical reviews and consultancy.

Underlying revenue over the last three years has shown consistent growth and in the twelve months ended 31st December 2015 Swat recorded revenue of GBP 4.7m, made a profit before interest, amortisation and taxation of GBP 0.6m and had gross tangible assets of GBP 1.9m.

Wilmington offers information, education and networking in risk and compliance, finance and legal.

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Publication:M2 EquityBites (EQB)
Geographic Code:4EUUK
Date:Jul 22, 2016
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