Wilmington acquires SWAT, a financial services training company

wilmington-logoWilmington plc (“Wilmington”), the knowledge leader in Risk & Compliance, Finance, Legal, and Insight announces the acquisition by its subsidiary, Mercia Group Limited, of SWAT Group Limited (“SWAT” or “the Business”), a provider of training and technical compliance support to accountancy firms in London and the South West of England.

The consideration will be settled by an initial cash payment of £2.4m and a deferred consideration payment of up to £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 £0.5m in cash.

The consideration will be financed out of the Group’s existing £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. The Business will form part of the Finance Division.

Background to SWAT

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 (“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.

Acquisition rationale

The acquisition gives the Group a bigger presence in London, and extends the Group’s business into the South West of England where Mercia has been under-represented. The acquisition also provides Mercia with a clear opportunity to sell its technical and marketing services to SWAT’s clients as well as providing access to the accountancy student training market.

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 £4.7m (1), made a profit before interest, amortisation and taxation of £0.6m (1) and had gross tangible assets of £1.9m (1).

(1) unaudited