TIDMBEG
RNS Number : 3399Y
Begbies Traynor Group PLC
04 May 2023
4 May 2023
Begbies Traynor Group plc
Acquisition
Further expansion of Eddisons' regional footprint and
offering
Begbies Traynor Group plc (the "group"), the business recovery,
financial advisory and property services consultancy, today
announces that it has completed the acquisition of BLC No1 Limited,
which trades as Banks Long & Co.
Banks Long & Co is a firm of chartered surveyors employing
38 staff in Lincoln and operating throughout Lincolnshire and
Humberside. The business will integrate with Eddisons, the group's
property division.
The Banks Long & Co team provide commercial property agency,
property management, building consultancy and valuation services to
a wide range of regional clients including public and private
sector organisations, which aligns with the group's current service
offering and strengthens our regional presence across Eastern
England and South Yorkshire.
In its financial year ended 31 August 2022, Banks Long & Co
generated revenue of GBP2.6m (unaudited) and normalised pre-tax
profits of GBP0.4m (when reported on the same basis as the group).
Trading is projected to at least maintain this level in the current
financial year to date. It had net assets of GBP2.1m (including
GBP1.4m cash) as at 31 August 2022.
Reasons for and benefits of the acquisition
The group's overall strategy is to increase the scale and
quality of its businesses both organically and through
value-accretive acquisitions, thereby delivering strong,
sustainable financial performance.
Our strategy in property services is to enhance and broaden our
service offerings and geographical coverage. Since the creation of
the division through the acquisition of Eddisons in December 2014,
the group has built a strong track record of acquisitions that have
met these criteria. This strategy has increased the scale of the
division from annual revenue of cGBP13m at inception to a current
run rate in excess of GBP30m, demonstrating strong growth and
enhancing the group's earnings.
The acquisition is in line with our strategy, as the Banks Long
& Co team will strengthen our existing offering and footprint
in Eastern England and South Yorkshire and follows the recent
acquisitions of Mark Jenkinson & Co (March 2023 - Sheffield)
and Budworth Hardcastle (June 2022 - Eastern England). The
acquisition is expected to be immediately earnings enhancing.
Principal terms of the acquisition
The acquisition consideration is structured as follows, based on
current levels of financial performance and on a cash free, debt
free basis:
-- Initial consideration of GBP1.5m, payable GBP1.125m in cash
and through the issue of 292,170 new ordinary shares;
-- Earn out of up to GBP1.5m, subject to growing the
profitability of the business, with the full payment subject to
aggregate pre-tax profits of GBP5.0m over the five year period post
completion.
This gives a maximum consideration of GBP3.0m (on a cash free
debt free basis).
The cash consideration will be met from the group's existing
financial resources, with significant headroom available for
further acquisitions and investment.
Application has been made to the London Stock Exchange for the
292,170 new ordinary shares to be admitted to trading on AIM. It is
expected that admission will become effective at 8.00 a.m. on 10
May 2023 following which the total number of shares in issue and
total voting rights will be 154,803,994. The group does not hold
any shares in treasury and, therefore, the above figure may be used
by shareholders as the denominator for the calculation by which
they will determine if they are required to notify their interest
in, or a change to their interest in the company.
Anthony Spencer, Director at Eddisons, commented:
"I am very pleased to welcome the Banks Long & Co team to
Eddisons, which extends our footprint into Lincolnshire and
enhances our existing presence in Eastern England and South
Yorkshire. The Banks Long & Co team are highly experienced with
a proven track record in delivering high quality professional
advice to public and private sector clients. We continue to seek
further opportunities for expansion across the UK."
Ric Traynor, Executive Chairman of Begbies Traynor Group plc,
commented:
"The acquisition of Banks Long & Co is in line with our
strategy to develop our property advisory and transactional
services division, by increasing both its scale and market
position, as well as the scope of its service offering and
geographical coverage.
"Banks Long & Co has excellent relationships within its
local market place offering its clients a broad range of real
estate services which they have developed over many years and we
are very much looking forward to working with them."
Enquiries please contact:
Begbies Traynor Group plc 0161 837 1700
Ric Traynor - Executive Chairman
Nick Taylor - Group Finance Director
Canaccord Genuity Limited 020 7523 8350
(Nominated Adviser and Joint Broker)
Emma Gabriel / Patrick Dolaghan
Shore Capital (Joint Broker) 020 7408 4090
Malachy McEntyre / Mark Percy / Anita Ghanekar / James
Thomas
MHP Communications 020 3128 8567
Reg Hoare / Katie Hunt / Pauline Guenot begbies@mhpc.com
Information on Begbies Traynor Group can be accessed via the
group's website at
www.begbies-traynorgroup.com/investor-relations
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END
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