Begbies Traynor Group

Begbies Traynor Group complete the acquisition of Daniells Harrison Surveyors LLP

Date Published: 10/01/2022

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."

To view the announcement on the London Stock Exchnage website, click here.

About The Author

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Ric qualified with Arthur Andersen in 1984 and founded Begbies Traynor in 1989. Ric specialises in practice management and has considerable experience in financial turnaround and dispute resolution within professional practices.

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