SYDNEY, AUSTRALIA: AF Legal Group has executed a share sale deed to acquire 100% of the issued share capital of GTC Legal Group Holdings, the holding company of Armstrong Legal and other legal firm brands.

The proposed merger will create one of the largest personal services legal firms in Australia with pro-forma1 FY22 revenue of $40.8 million, EBITDA of $8.8 million and EBITA of $6.2 million.

Pro forma numbers exclude immediate and long term revenue and expense synergies that are currently being quantified and expected to be material.

The proposed merger is 40% EBITA per share accretive (pre synergies) for AFL shareholders, with proforma FY22 EBITA per share increasing from 3.5 cents per share to 4.9 cents per share.

AF Legal Group Executive Director Grant Dearlove said, “The merger of AF Legal Group and GTC Legal Group is a seminal moment for the personal legal services industry in Australia with the combined group being uniquely positioned in a $20 billion market ripe for consolidation.

For shareholders, it delivers immediate scale, increased revenue and profitability and a more diversified earnings base from family law only to an additional six practice areas. We will have new exposure to the fast growing revenue-sharing platform model which is challenging the traditional law firm model in regions such as the UK, and our geographic footprint will increase from 19 to 26 offices under seven quality and recognized brands.

The integration of our complementary businesses will drive immediate and long-term increased revenue and expense synergies, with a significant reduction of duplicated costs already identified.

The merged group will have a strengthened board and leadership team with proven track records in legal firm disruption and consolidation”.

GTC Legal Group Managing Director, James Stevens added, “Put simply, the merger of GTC and AFL marks the true beginning of the consolidation of the personal legal services market in Australia – a development that is long overdue. The combined resources of the new group will provide it with all the tools it needs to grow and adapt to a rapidly changing world. Our enhanced national presence, top-tier administrative efficiencies and strong record of client acquisition will present a compelling business going forward.”

Founded in 2009 by its current Managing Director, James Stevens, GTC was one of the first “platform” law models in Australia disrupting the traditional model of law firms operating within the personal legal services market.

GTC operates nationally and comprises a “traditional” model law firm (Armstrong Legal); a “non-traditional” revenue-sharing model law firm (GTC Lawyers); around 1,500 network partners (All Courts Lawyers), and a front and back office service company (GTC Legal Group Services).

GTC also operates one of Australia’s busiest legal hotlines, operating 7am-midnight, 7 days a week; staffed exclusively by practising lawyers, and fielding over 80,000 enquiries each year; it runs two of Australia’s largest legal websites, www.gotocourt.com.au and www.armstronglegal.com.au, generating hundreds of thousands of unique visitors each month, and it has highly developed digital marketing and technology capabilities to improve law practices’ organic growth and profitability.

With the acquisition of family law and criminal specialist Armstrong Legal in 2019, GTC operates across seven segments of personal law being family law, criminal law, contested estates, civil and commercial, administrative, agency and immigration. The business has 116 staff, seven offices in Australia and generated pro forma $20.3 million in revenue, $4.8 million in EBITDA and $3.6 million in EBITA for the financial year ended 30 June 2022.