GVA plans international expansion with possible IPO
COMMERCIAL property agent GVA, which has an office in Yorkshire, could be sold, floated or refinanced in a deal that would value the company at between £120m and £180m, according to reports.
Its chief executive Rob Bould told Property Week that corporate finance firm Cannacord Genuity will explore strategic options to allow GVA, which achieved a leap in profit before tax of £7.8m, up from £146,000 in 2011/12 and a major reduction in net debt, to achieve its medium-term strategic goals.
The options being reviewed include a sale of the company, an initial public offering or refinancing itself and using debt to pay back LDC, the private equity firm that owns 30% of the company.
LDC took the stake following a debt-for-equity swap last year, when it exchanged £60m of loan notes for a 22% stake in the company, which will eventually rise to 30%.
The loan notes were swapped for equity at their face value, so a 30% stake in the company valued at £60m would value the whole at around £180m.
If an initial public offering were attempted, the company could be worth around £120m.
Mr Bould said: “We’re delighted to be working with Canaccord. This builds on the good work we have achieved over the past two years, and marks the next step in achieving our long terms aspirations for major growth and in creating a truly international dimension to our UK facing business.
“The success of our company restructure 18 months ago, coupled with our ability to build on that platform throughout last year with an outstanding end of year, has turned GVA into a much stronger proposition that is now primed for further growth. We have gained market share in high-growth areas, increased fee income and continued to invest in our resilient advisory-led regional model that differentiates us from other UK commercial property advisors. Furthermore we are just 10 months away from being a debt free business. We will continue to build the business along these lines.
“Positive market sentiment built on hard evidence that better times lay ahead here in the UK and globally, means now is an important period in which to invest in our future and gain further momentum. With this in mind, this latest move marks our next logical step for further growth.”
GVA’s stated three year goal is to create a performance led business that can achieve pre-tax profits of £20m by 2016.
Mr Bould told Property Week that the company expected to know which option would be pursued by MIPIM next year.
KPMG and law firm DLA Piper are also advising GVA.
