Legal Eye provides risk management and compliance consultancy services to the legal, financial and property sectors.
LEL awards the ‘Legal Eye Quality Standard,’ which benchmarks compliance with the Solicitors Regulation Authority and the Council for Licensed Conveyancers for legal practitioners.
ULS said the acquisition is set to be immediately earnings ‘accretive’ and significantly enhances the Group’s compliance offering.
Legal Eye was founded in May 2009 by Jaunita Gobby, who will continue in her day-to-day involvement in the business. LEL has been contracted by approximately 350 firms since May 2009 and has approximately 130 active clients.
The majority of LEL’s clients are on annual contracts, providing a high level of forward revenue visibility. For the 12 months ended 31 March 2014, LEL reported revenue growth of 54% to £563,729 and Profit Before Tax growth of 38% to £149,138 over the comparable period the previous year.
ULS bought the entire issued share capital of LEL from Jaunita Gobby for an initial cash consideration of £1.1m, payable out of existing cash resources, in addition to an agreed earn out, payable in cash, equal to two times EBITDA for the full years ending 31 March 2016 and 31 March 2017 respectively.
Management expect the total consideration to be significantly below the maximum total consideration of £4.4m.
ULS has also acquired a 15% stake in Financial Eye from Jaunita Gobby for a consideration of £100,000. Financial Eye provides compliance services to COFAs (Compliance Officers for Finance and Administration) to help their clients ensure that they comply with the regulatory framework in which they operate.
Nigel Hoath, chief executive officer, said: “As outlined at the time of its IPO, ULS has a clear strategy for growth in the UK, comprising both organic growth and acquisitions. The acquisition of Legal Eye is a very positive move for the Group and will help us accelerate our growth as Legal Eye has already earned a strong reputation in its sector.
He added: “However, we believe there is a significant opportunity to accelerate its growth and we are excited about how we can help achieve this as part of the Group. ULS’ existing business will also benefit from the acquisition of Legal Eye by enabling us to place a stronger emphasis on quality and risk management as a central element of our eConveyancing value proposition.”
