REG - Begbies Traynor - Acquisition

Begbies TraynorAnnouncement

12/12/2023 07:00

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RNS Number : 3964W  Begbies Traynor Group PLC  12 December 2023

12 December 2023

Begbies Traynor Group plc

 

Acquisition

 

Expansion of Eddisons property auctions team

 

Begbies Traynor Group plc (the "group"), the professional services
consultancy, today announces that it has completed the acquisition of SDL
Auctions Limited, which trades as SDL Property Auctions ("SDL"). SDL will
integrate with Eddisons, the group's property advisory and transactional
services division.

 

SDL is a national firm of property auctioneers, headquartered in Nottingham
and employing 46 staff who will all join the group following the acquisition.
The acquisition will broaden Eddisons geographical coverage across the
Midlands and augment its expertise and scale in auctions nationally.

 

In its financial year ended 31 March 2023, SDL generated revenue from
continuing operations of £4.5m and normalised pre-tax profits from continuing
operations of £0.5m (when reported on the same basis as the group). Trading
is projected to remain at this level in the current financial year. SDL had
net assets of £0.2m (including £0.5m net cash) at 31 March 2023.

 

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 to a current run rate in
excess of £40m, demonstrating resilience of earnings in a challenging
economic environment, strong growth and profitability whilst enhancing the
group's earnings.

 

The acquisition is in line with this strategy, enhancing our auctions service
offering. Together with the acquisition of Mark Jenkinson & Son (the
Sheffield property auctioneer) in March 2023, the transaction significantly
increases our national coverage and reinforces our expertise and reputation
for the sale by auction of commercial and residential property, as well as
plant and machinery.

 

The combined team will be one of the largest property auctioneers by volume
nationally.

 

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 cash consideration of £2.5m;

·      Earn out of up to £0.75m, payable in cash, subject to
maintaining revenue in the 12 month period post completion.

 

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

 

The consideration will be met from the group's existing financial resources,
with significant headroom available for further acquisitions and investment.

 

Anthony Spencer, Managing Director of Eddisons, commented:

 

"I am very pleased to welcome the SDL team to Eddisons. The acquisition
significantly increases the scale of our auction business and I look forward
to working with the team in the future. This is the fourth acquisition for
Eddisons in 2023 and we continue to seek further opportunities for expansion
across the UK."

 

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

 

"The acquisition of SDL Property Auctions 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. Our combined team will be one of
the largest property auctioneers by volume nationally.

 

"SDL has an excellent reputation, and we are looking forward to working with
the team."

 

 

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 / Harry Pardoe

 

Shore Capital (Joint
Broker)
020 7408 4090

Malachy McEntyre / Mark Percy / Anita Ghanekar / James Thomas

 

MHP
 
  020 3128 8567

Reg Hoare / Katie Hunt
                                     begbies@mhpgroup.com
(mailto:begbies@mhpgroup.com)

 

 

Information on Begbies Traynor Group can be accessed via the group's website
at

www.ir.begbies-traynorgroup.com

 

 

 

 

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