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LONDON (Alliance News) - MartinCo PLC Friday said it has acquired the entire property franchise business of Legal & General Group PLC, which it expects to immediately contribute to its earnings.
Legal & General's property franchise business consisted of two companies, Xperience Franchising Ltd and Whitegates Estates Agency Ltd. MartinCo has acquired 100% of shares in both companies for a total of GBP5.0 million in cash plus an amount that represents the net assets of the two companies, expected to be around GBP1.0 million.
MartinCo expects the acquisition of the two companies to have an immediate effect on earnings, with both companies generating GBP1.8 million in revenue in the 12 months ended December 31, 2013.
"This acquisition of the entire property franchise business of Legal & General is a significant step forward in the group's development," said Chief Executive Ian Wilson.
Xperience Franchising and Whitegates Estates are a franchised lettings and estate agency group with 89 offices and 75 franchisees, comprising of four high street brands including CJ Hole, Ellis and Co, Parkers and Whitegates, with Legal and General providing financial services to the companies.
"The group [MartinCo] will own five franchise master licences and each of its five brands has the potential for further development. The group's first brand, Martin & Co is a truly national brand predominately focused on lettings activity, while the strength of the four acquired brands lies in their regional focus and balanced mix of lettings and estate agency income streams," said Wilson in a statement.
MartinCo acquire the property franchise business debt free and has increased its UK footprint to 282 franchised offices and one company-owned office following the acquisition. The two companies, Xperience and Whitegates, provide MartinCo with an additional 11,000 tenanted, managed properties, and brings MartinCo's total portfolio to 43,000 properties following the acquisition.
"This acquisition secures a very substantial portfolio of tenanted, managed properties and balances our mix of lettings and estate agency revenue," said Wilson.
MartinCo also expects costs to reduce and operating efficiencies to improve as it looks to centralise costs following the acquisition.
As part of the deal, MartinCo have entered into a 10-year financial services agreement with Legal and General, which will provide MartinCo's franchisees access to market mortgage products, life assurance and general insurance products, it said in a statement.
MartinCo shares were up 3.5% to 120.00 pence per share Friday morning.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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