REG - Begbies Traynor - Acquisition

Begbies TraynorAnnouncement

27/06/2022 07:00

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RNS Number : 2012Q  Begbies Traynor Group PLC  27 June 2022

27 June 2022

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 Budworth Hardcastle Ltd.

 

Budworth Hardcastle is a firm of chartered surveyors employing 18 staff in
offices in Northampton, Kettering and Peterborough. The business will
integrate with Eddisons, the group's property division, which has existing
regional offices in Bury St Edmunds, Huntingdon, Northampton and Peterborough.

 

The Budworth Hardcastle team provide valuation, commercial property agency and
building consultancy services to a wide range of regional clients, which
aligns with the group's current service offering and strengthens our regional
presence.

 

In its financial year ended 31 August 2021, Budworth Hardcastle generated
revenue of £1.8m (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 £0.4m
(including £0.3 cash) as at 31 August 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, 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 c£13m
at inception to a current run rate of c£30m, together with strong and growing
profitability.

 

The acquisition is in line with our strategy, as the Budworth Hardcastle team
will strengthen Eddisons' existing offering and footprint in Eastern England,
and follows the recent acquisitions of Daniells Harrison (January 2022) and
Fernie Greaves (October 2021) which augmented our south coast and Yorkshire
presences.

 

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 £0.9m, payable £0.6m in cash and through
the issue of 206,937 new ordinary shares;

·    Contingent cash consideration of up to £0.9m subject to maintaining
financial performance in the three year period post completion.

 

In addition, the acquisition includes a maximum cash earn out of £0.6m
subject to meeting growth targets over the five year period post completion.

 

This gives a maximum consideration of £2.4m (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 206,937 new
ordinary shares to be admitted to trading on AIM. It is expected that
admission will become effective at 8.00 a.m. on 30 June 2022 following which
the total number of shares in issue and total voting rights will be
153,742,455. 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 Budworth Hardcastle team to Eddisons, which
extends our footprint in Eastern England. 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 Budworth Hardcastle 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. Budworth Hardcastle 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 8567

Reg Hoare / Katie Hunt / Pauline
Guenot                                           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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