REG - Begbies Traynor - Acquisition

Begbies TraynorAnnouncement

10/01/2022 07:05

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RNS Number : 8436X  Begbies Traynor Group PLC  10 January 2022

10 January 2022

Begbies Traynor Group plc

 

Acquisition

 

Begbies Traynor Group plc (the "group"), the business recovery, financial
advisory and property services consultancy, today announces that it has
completed the acquisition of Daniells Harrison Surveyors LLP ("Daniells
Harrison").

 

Daniells Harrison is a firm of chartered surveyors employing 27 staff who will
integrate with Eddisons, the group's property advisory and transactional
services division. The team provide valuation and property consultancy
services to a wide range of clients across the south coast of England from
offices in Fareham, the Isle of Wight, Bournemouth and Hailsham.

 

In its financial year ended 31 March 2021, Daniells Harrison generated revenue
of £2.1m (unaudited) and normalised pre-tax profits of £0.4m (when reported
on the same basis as the group). Trading has been maintained at these levels
in the current financial year to date. It had net assets of £0.5m (including
£0.3m cash) as at 31 March 2021.

Reasons for and benefits of the acquisition

 

The group's strategy is to increase the scale and quality of its businesses
both organically and through value-accretive acquisitions, enabling increased
shareholder value through the delivery of 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 c£13m
at inception to a current run rate of c£26m, together with strong and growing
profitability.

 

The acquisition is in line with our strategy, as the Daniells Harrison team
will extend the geographical coverage of the division which has now broadened
from its original northern base, to include London and Eastern England as well
as now the South Coast.

 

Principal terms of the acquisition

 

The acquisition is for consideration of £2.0m based on current levels of
financial performance, on a cash free, debt free basis, structured as:

·    Initial consideration of £1m, payable £0.75m in cash and through
the issue of 186,651 new ordinary shares;

·    Contingent cash consideration of £1m subject to maintaining
financial performance in the four year period post completion.

 

In addition, the acquisition includes a maximum cash earn out of £1.25m
subject to meeting growth targets over the five year period post completion.

 

This gives a maximum consideration of £3.25m (on a cash free debt free
basis).

 

The initial 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 186,651 new
ordinary shares to be admitted to trading on AIM. It is expected that
admission will become effective at 8.00 a.m. on 13 January 2022 following
which the total number of shares in issue and total voting rights will be
152,723,482. 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 Daniells Harrison team to Eddisons, which
extends our geographical coverage across the South Coast. They are a highly
experienced team with a proven track record in delivering high quality
professional advice. We continue to seek further opportunities for expansion
across the UK."

 

Ric Traynor, Executive Chairman of Begbies Traynor Group plc, commented:

 

"The acquisition of Daniells Harrison 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. Daniells Harrison has excellent relationships with
a broad range of clients which have been 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)

Adam James / Patrick Dolaghan

 

Shore Capital
                                                                                   020
7408 4090

(Joint Broker)

Malachy McEntyre / Mark Percy / Anita Ghanekar / James Thomas

 

MHP
Communications
            020 3128 8572

Reg Hoare / Katie Hunt / Florence
Mayo                                           begbies@mhpc.com
(mailto: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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