Maclay Murray and Spens (MMS) has sold niche legal services business Law At Work (LAW) to its existing management, including well-known corporate lawyer Magnus Swanson, in a deal which industry sources estimate could be worth seven figures.
Mr Swanson, a former MMS chief executive who is now chairman at LAW, is taking the majority shareholding while LAW chief executive Jane Wright and its legal services director Donald MacKinnon are also taking stakes in a deal which is being funded by HSBC.
LAW, which employs 30 people including several lawyers, provides advice on areas such as employment, human resource and health and safety for a fixed fee.
According to accounts at Companies House it made a pre-tax profit of £197,092 on turnover of £1.58m in the 12 months to May 31, 2011 but is thought to have improved that performance in its most recent financial year.
Corporate finance experts told The Herald businesses of this type can typically be sold for up to four times their earnings before interest, tax, depreciation and amortisation, and estimated this deal could run into seven figures.
However no one from LAW, MMS or HSBC would give any information on the value of the transaction. Mr Swanson paid tribute to HSBC and advisers DLA Piper and Craig Corporate for their help in putting the agreement together.
He said: "Upon leaving MMS earlier this year, I was keen to get involved with growing, successful businesses.
"I saw excellent potential in Law At Work and have been impressed by the business model. The business was nurtured by MMS in its early years and the time is now right for it to stand alone as one of Scotland's leading fixed-fee consultancies.
"The de-merger of the business, which is a specialist in its field, will allow it to grow and develop."
LAW is soon moving to new offices in Edinburgh and Glasgow and will continue to host training seminars in those cities plus Aberdeen and London.
Ms Wright, who held senior positions with Diageo and Glaxosmithkline before taking over at LAW two years ago, said: "It is a real opportunity to stand on our own two feet.
"The business is very successful and has been growing but by standing alone we can be more flexible and can respond to the changes in the marketplace.
"We do want to expand but the most important thing is to keep providing a quality service and grow in a controlled way. We will be ambitious but not to the extent where it compromises our business model. The first couple of months of this financial year have been very encouraging as far as new business is concerned and we expect that to continue."
Mr MacKinnon, who leads the company's team of lawyers, added: "This has always been a long-term aspiration.
"We believe we can build on what is here already as there is a clear market out there for our services."
A spokesman for MMS said: "We are currently undertaking a comprehensive strategic review, which has identified Law At Work's commodity-based services as no longer core to the focus of MMS.
"The decision has, therefore, been taken to sell the business to its management and we wish the team all the best in the future."
It is understood Doris Littlejohn will remain as a non-executive advisor on the LAW board.
The legal sector in Scotland has seen a number of mergers between firms of all sizes this year including Pinsent Masons with McGrigors and Tods Murray with Fyfe Ireland.
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