Clydes in merger talks with Shadbolt
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Clyde & Co is in preliminary talks to tie up with construction firm Shadbolt, The Lawyer can reveal.
If successful the move would see Clydes leapfrog Taylor Wessing and Bird & Bird to rank 14th in The Lawyer’s UK 200 with a combined turnover of £196m. At the 2008-09 year end Clydes saw turnover rise to £185m from £157m a year earlier while Shadbolt’s revenues dipped 4 per cent to £10.8m from £11.2m.
Confirming the move, Clydes chief executive Peter Hasson (pictured) said: “We’re in talks with Shadbolt.”
It is understood that Shadbolt launched a strategic review earlier this year that resulted in the decision to scout the market for a potential tie-up.
The aim was to merge with a firm with a strong presence in the international markets to enable it to compete on a level playing field with larger firms operating in the construction, projects and infrastructure spaces.
Shadbolt currently has just one international office - in Paris - having retrenched from Hong Kong in October 2002. It also has associations with Soimulescu Dragan-Costin Law Offices in Bucharest and Tanzanian-based firm AKO Law.
It is understood that Clydes is keen on bringing Shadbolts into the fold to strengthen its construction, projects and infrastructure practices. The firm has a strategic plan to build up a series of niche groups to target top-end work.
A source close to the deal said the talks were in very early stages, with both sides examining how best to merge two LLPs. One issue is whether Clydes should swallow up the entire Shadbolt partnership or if it should pick off certain practice areas.
Clydes has taken the long-term view of concentrating on growth in developing markets and earlier this year it launched an alliance with ALMT Legal (4 June 2009) and Islamic finance specialist Abdulaziz Al Bosaily Law Office (6 April 2009). The firm also has offices in Shanghai and South America.
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Readers' comments (21)
Anonymous | 19-Nov-2009 4:31 pm
This would benefit Shadbolt much more than Clydes. They need to do something to help partners compete with the big guns and Clydes would give a base to start from.
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Anonymous | 19-Nov-2009 5:02 pm
I think this is a way of Clyde & Co taking over all of Shadbolts big clients. Shadbolt LLP will be swallowed up by such a big firm.
Such a big dip in turnover for Shadbolt LLP surely means bad management, and a poor strategic plan!!
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Anonymous | 19-Nov-2009 5:32 pm
That could well be, but Clydes might not choose to take the whole firm, especially as they seem to have the whip hand in the deal.
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Anonymous | 19-Nov-2009 5:38 pm
Your editorial says, "niche firms are being bombarded with offers" by larger ones. I think more like exposed partners in niche/smaller firms are seeking the supposed safe haven that larger better resourced and capitalised firms offer which seems to be confirmed in the article itself. For Clydes it's an opprotunity to acquire at low cost another practice and their clients and then indulge in a bit of asset stripping in which they do of course have a bit of form already!
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Anonymous | 19-Nov-2009 5:53 pm
The dip in Shadbolt's turnover is very small, especially in the current economic climate.
The Shadbolt LLP construction and projects teams and their considerable expertise will be a real asset to Clydes and their clients. Sounds like a good move for both.
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Anonymous | 19-Nov-2009 5:57 pm
Having worked extensively with both firms, I would comment that Clyde has a small, quality non-contentious construction capability which could use additional critical mass; Shadbolt is challenged in gaining certain larger instructions it is clearly cabable of due its relatively small size.
Ostensibly it makes a great deal of sense for both firms.
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Anonymous | 19-Nov-2009 6:06 pm
They should never have let the legendary Dick Shadbolt (ie. the 'Clint Eastwood' of the legal industry, as labelled by the Legal 500) retire 18 months ago ...
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Anonymous | 19-Nov-2009 6:06 pm
Shadbolts are an excellent construction firm. Clydes have a very good construction practice in the Gulf but lack critical mass in construction in the UK. The aquisition of Shadbolts would give Clydes a great UK construction team and give the Shadbolts guys easier access to the Gulf and the Middle East. And its not far to commute from the Shadbolts office in Reigate to the Clydes office in Guildford! I think this looks like a good merger for all concerned - and I'm one of their competitors.
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Anonymous | 19-Nov-2009 6:07 pm
I would hardly call £400K a big dip for a construction outfit in a property slump!
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Anonymous | 19-Nov-2009 7:39 pm
Looks like a sensible move for both firms. It should also not be forgotten that there are many benefits to scale. They may not be quite as dramatic as in, for example, the car industry, but they are very real nonetheless.
All other things being equal, a larger firm will have cost advantages, the opportunity to direct greater resources at opportunities, and a greater ability to withstand difficulties such as client losses, personnel departures or downturns. A higher profile brand will also be of help in recruitment and marketing.
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