Begbies Traynor swoops in £5.63m acquisition deal

Manchester-based insolvency experts Begbies Traynor has acquired Ernest Wilsons & Co Limited and Ernest Wilson’s (West Yorkshire) Limited, which trade collectively as Ernest Wilson, in a deal worth up to £5.63m.

Ernest Wilson is a Leeds-based business transfer agent, providing agency services for the sale of small businesses across the UK.

This long-established business operates across a broad range of sectors ranging from food outlets and convenience stores to care homes, restaurants and hotels. The business has 24 staff and is led by an experienced and well-regarded management team, who will join the group.

The acquisition enhances the group’s existing transactional support services provided by Eddisons, which include the sale of commercial property, through agency and auction, together with machinery and business asset disposals. It is also complementary to the group’s BTG Advisory and corporate finance offerings.

The acquisition is in line with the strategy to develop the group through selective acquisitions to enhance its expertise and service offering.

In the financial year ended 31 July 2019, Ernest Wilson reported annual revenue of £2.2m and pre-tax profits of £700,000, when reported on the same basis as the group. It had gross assets (excluding cash at bank) of £500,000 as at 31 July 2019.

The acquisition is for an initial consideration of £4m, to be satisfied by £3m in cash from the group’s existing resources and through the issue of 1,163,874 new ordinary shares of five pence each. The acquisition is on a cash free, debt free basis.

Under the terms of the acquisition, additional contingent consideration of up to £1.63m will be payable in line with the achievement of financial targets in the three years following completion, with full payment only payable in the event that significant growth targets have been achieved.

Any additional consideration is calculated according to an agreed formula and is payable in cash.

Begbies Traynor Group executive chairman Ric Traynor said: “The acquisition of Ernest Wilson is in line with our strategy to develop the group, by enhancing our expertise and service offering.

“Ernest Wilson is highly complementary to our existing services and, by extending our transactional service offering, will enable us to deliver a broader range of services to support business and asset sales. Ernest Wilson has a long track record of delivering both excellent service to its clients and strong financial performance, which we expect to build upon as part of the broader group.”