Knights has agreed to acquire Keebles, a century-old Sheffield-based law firm, for £11.54m.
The acquisition will see 138 lawyers join Knights, and will provide the listed law firm with entry into Sheffield.
Knights will buy Keebles from its ten existing equity partners for a total of £11.54m, subject to working capital adjustments at the time of completion.
Knights will initially pay £8.41m, made up of £4.91m in cash and £3.5m in 791,990 ordinary shares in Knights, along with a deferred cash consideration of £3.13m to be paid in equal instalments over the two years following completion.
Completion of the acquisition is expected to take place on 11 June 2021.
Knights CEO David Beech said: “Having grown our position significantly in Leeds and York, Keebles provides us entry into the important city of Sheffield and the wider South Yorkshire area, allowing us to join up our presence across the region and execute our ambition to become the leading legal and professional services business outside London.”
In its unaudited accounts for the year ending 30 April 2020, Keebles reported revenue of £12.7m.
Following full integration with Knights, the board expects Keebles to contribute a profit before tax margin of around 18 per cent which, combined with a typical level of revenue churn post-acquisition, means the acquisition is expected to be immediately earnings enhancing.