Begbies Traynor in £22m share placing and £25m acquisition
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Begbies Traynor, the Manchester-based insolvency specialist, is acquiring long-established insolvency practice David Rubin & Partners in a deal worth £25m, and has raised £22m in an overscubscribed share placing.
David Rubin & Partners operates offices in London and Guernsey.
Begbies said the deal, the biggest in its history, is on a cash free and debt free basis. It involves an initial consideration of £12m and a deferred consideration and earn out payments in cash of up to £13m, subject to the financial performance of the acquired business over a period of up to five years.
The takeover will deliver a significant increase in scale of the business recovery and financial advisory division, with a material increase in the group’s size in the key London market.
The placing will satisfy the initial cash consideration for the acquisition, fund pipeline opportunities and is also for general corporate purposes.
Mark Fry, head of business recovery and advisory of Begbies Traynor Group, said: “The acquisition of David Rubin & Partners significantly increases the scale of our business recovery and financial advisory business.
“Combined with our recent acquisition of CVR, we have also materially increased our scale in the key London market.
“We welcome the team into the group and look forward to working with them.”
Ric Traynor, Begbies Traynor executive chairman, said: “This acquisition is our largest to date and is expected to be immediately earnings enhancing.
“It leaves the group well positioned to increase its market share and continue to grow its business recovery and financial advisory revenues.
” With the benefit of our recent acquisitions and other organic growth initiatives the group is well positioned to deliver material growth in the 2021-22 financial year. ”
In a trading update last month, the group said it is on course to deliver expected profits, and anticipates increased activity when government pandemic-related business support comes to an end.
A team from North West law firm Brabners, led by Caroline Litchfield, acted as legal advisers to Begbies Traynor on the acquisition.