Belvoir strengthens portfolio with £3.26m West Midlands acquisition
ONE of the UK’s largest lettings franchises has expanded its portfolio with the acquisition of a West Midlands’ property sales and lettings business in a deal worth £3.26m.
AIM-listed Belvoir Lettings will acquire the entire issued share capital of Goodchilds, which has a network of 16 property sales and lettings branches across an area bordered by Stoke-on-Trent, Atherstone, Birmingham and Telford as well as a franchise in Milton Keynes. The business was established in 2004 in Wolverhampton by David Warke as a lettings agency.
As part of the transaction, Belvoir is to carry out a £3.6m share placing, arranged by Cantor Fitzgerald Europe.
Goodchilds’ unaudited financial statements for the year to January 31, 2015 showed revenue of £671,000 and net profit before tax of £80,000.
Its summary unaudited management accounts in the 12 months to July 31, 2015, on which the consideration was based, were adjusted to reflect that the two corporate outlets would be franchised on acquisition and the transfer out of certain non-franchise activities. The adjusted revenue for the year to July 31, 2015 was £469,000 and net profit was £434,000.
Mike Goddard, Executive Chairman and Chief Executive, Belvoir, said: “We are delighted to be announcing the acquisition of Goodchilds. This is an exciting milestone in Belvoir’s growth, considerably expanding the size of the group.
“Following the acquisition of the Newton Fallowell business in July, this acquisition marks further success in pursuing our multi brand strategy in order to increase market share and geographic coverage. Goodchilds is a clear strategic fit and we are looking forward to welcoming their franchise owners to the group.”
Browne Jacobson advised Belvoir on the deal. Mark Hughes (Nottingham) and Paul Krivosic (Birmingham) advised on the acquisition, while Mike Jackson (Birmingham) and Afshan Ahmed (Birmingham) advised on the AIM fundraising.
Belvoir said Goodchilds had an established market for both lettings and property sales with a revenue split of 70% lettings and 30% estate agency in the 12 months to July 31, 2015. The company franchise network is also expected to benefit from Belvoir’s established professional support infrastructure.
Belvoir has said it expects the acquisition to be earnings accretive in the first full financial year following completion.
