Wilmington is making an initial cash payment of £2.4m, plus a deferred consideration payment of up to £3m payable in September 2018 in cash subject to SWAT achieving certain profit targets over the two financial years ending 30 June 2018. On acquisition SWAT will have £500,000 in cash.

In a statement to the Stock Exchange, Wilmington said the consideration will be financed out of the group's existing £65m multicurrency debt facility and the acquisition is expected to be earnings enhancing in the first full year of ownership.

The aquisition will be absorbed into Wilmington’s finance division and will work alongside Wilmington's training business, Mercia. The existing management team, led by Adrian Gibbons and David Norris, will remain with the business and, along with four other individuals, make up the vendors of SWAT.

The acquisition of SWAT which generates 50% of its revenue from subscription-based products is consistent with Wilmington's strategy of acquiring businesses with high repeat revenues and strong, cash generative income streams in the group's key markets, the statement said.

Approximately 50% of SWAT's revenue is derived from training and the balance from information, technical writing and consultancy. Underlying revenue over the last three years has shown consistent growth and in the twelve months ended 31st December 2015 SWAT recorded revenue of £4.7m, made a profit before interest, amortisation and taxation of £0.6m and had gross tangible assets of £1.9m. 

Pedro Ros, chief executive of Wilmington, said: ‘SWAT is a quality business that we have been tracking for a number of years and we are delighted that it is joining Wilmington. SWAT has a very experienced management team who collectively bring a wealth of knowledge and experience in the accountancy training and technical support sectors.’

SWAT was formed in 1976 as South West Accountancy Tutors to provide training and compliance services to practising firms of accountants across Devon and Cornwall. Since then the business has expanded its client base and now also has offices in Plymouth and London.

Wilmington said the acquisition gives the group a bigger presence in London, and extends its business into the south west of England where Mercia has been under-represented.  The acquisition also provides Mercia with an opportunity to sell its technical and marketing services to SWAT's clients as well as providing access to the accountancy student training market.

Adrian Gibbons, CEO of SWAT Group Ltd said: 'This is an exciting opportunity for SWAT to work closely with Mercia to develop and deliver support services that the accounting profession needs to successfully stay ahead in a rapidly changing world. As part of Wilmington, SWAT is looking forward to providing the best support for our clients to keep them at the cutting edge of the accounting profession.’