Leading northeast legal firm, Swinburne Maddison LLP, has successfully acted on behalf of Durham firm, Hargreaves Services plc, in its acquisition of the entire issued share capital of Colchester-based C.A. Blackwell Group Limited, a civil contracting, engineering and land remediation specialist, for £11.85m.
As a market leader and major force in the sourcing, production, processing, handling and transportation of carbon-based and other bulk materials throughout the UK and Europe, the deal forms part of Hargreaves’ forward strategy to extend the range of services it can provide to the market place, whilst enabling diversification within its core business through the addition of this complementary operation.
The firm’s directors believe that the integration of Blackwell into the company creates exciting new opportunities to deploy one of the largest heavy plant fleets in Europe.
The total purchase price of £11.85m was settled by a net cash payment of £8.5m and the transfer to the Blackwell family shareholders of a property at Earls Colne, Essex with a market value of £3.35m.
Of the £8.5m net cash payment, £5.25m is to be held in escrow pending the settlement of some historic claims and the realisation of proceeds from the disposal of two other investment properties which have a book value of £6.5m.
Swinburne Maddison has enjoyed a strong working relationship with Hargreaves for many years and has acted in a number of other transactions for the Esh Winning-based company. Corporate and commercial partner, Martyn Tennant with support from 13 other lawyers, has been working on the Blackwell acquisition for over six months, drafting and negotiating the principal documents as well as assisting in the negotiation of the key commercial aspects of the transaction. Completion of the deal has required support from a number of other legal disciplines within the law firm including commercial property, employment and dispute resolution.
Martyn commented: “C.A. Blackwell has been operating in the field of bulk earth removal and civil engineering for over 50 years and like Hargreaves, has many active subsidiaries. As a result, there has been a need for detailed and extensive financial and legal due diligence aside from the provision of expert advice in the structure of the deal itself, which provides for part of the purchase price to be held in escrow pending resolution of certain post-completion issues.
“This has been a complex deal which I am delighted has been concluded to everyone’s satisfaction. It clearly demonstrates our ability as a firm to deliver a high level of service in respect of a complicated transaction, satisfying the requirements of our client.”
The operations of Blackwell are highly complementary to those of Hargreaves in terms of skills, experience and importantly, the equipment utilised. Based on predictions from unaudited accounts, the firm has enjoyed a strong trading year to the end of December 2015 and is expected to have generated an operating profit of some £3.3m from £89.0m of revenues.
Kevin Dougan, Hargreaves Group Commercial Director added:
“The acquisition of Blackwell extends the reach of Hargreaves into the UK earthworks and civil engineering sector, bringing further diversification to the Group and offering an attractive return on capital.
“The business is complementary to and synergistic with our existing mining operations and offers flexibility with our existing fleet of heavy plant, providing further opportunities to diversify the Group’s operational focus.
“We are delighted to welcome the Blackwell team into the Group and look forward to combining our expertise to work with them on the growing market opportunities in the UK.
“The service from Swinburne Maddison has been outstanding, with the firm responding to our needs and requirements in a timely, efficient and professional manner.”
In 2012 Swinburne Maddison also acted for Hargreaves plc in its joint venture with Tower Colliery in South Wales, providing legal advice in connection with associated funding arrangements with Lloyds Bank PLC.
Swinburne Maddison continues to enjoy steady growth and acclaim for its work. During 2015 Martyn Tennant won professional recognition as both Young Lawyer of the Year and Corporate Lawyer of the Year.