A listed company which started out as a law firm before growing into other sectors has announced plans to shut its legal business.

MJ Hudson told the London Stock Exchange yesterday that it had agreed to sell its data and analytics and business outsourcing divisions to Apex Consolidation Entity Ltd in a deal worth up to £40m.

As part of the reorganisation of the group, the company said it intended to give notice to the Solicitors Regulation Authority of the proposed closure of its legal business, which had once been the key part of the company.

MJ Hudson was established by solicitor Matthew Hudson as a London law firm in 2010 providing services to asset managers, institutional investors and advisers on mergers and acquisitions.

London Stock Exchange Group

MJ Hudson told the London Stock Exchange that it had agreed to sell its data and analytics and business outsourcing divisions to Apex Consolidation Entity Ltd

Source: iStock

The group diversified its business to offer a range of specialist asset management consultancy and gradually the significance of the legal business diminished. But the company struggled in the last year amid ongoing issues with its annual audit. Hudson quit as chief executive in February after the MJ Hudson auditors Ernst & Young resigned, stating it had ‘lost trust and confidence’ in the management to provide accurate and reliable information.

It was reported last month that the company had terminated the contracts of 12 trainee solicitors. According to the SRA register, 15 solicitors remained working for the legal business of MJ Hudson.

According to the most recent financial results, covering the year to 30 June 2021, MJ Hudson Limited – the legal arm of the group – recorded flat revenue of around £7.7m and pre-tax profit of £844,000. This side of the business had lost around £852,000 in 2020/21.

This week’s sale announcement stated that, on 31 March 2023, the group owed £33.7m under its facilities and overdrafts with its senior lender. The majority of the sale proceeds will therefore be applied to reducing the debt, and it is ‘highly unlikely’ that anything will available to shareholders following payment of all creditors and costs.

The disposal plan will be put to shareholders at the general meeting on 3 May.