Begbies Regulatory News (BEG)

8 November 2023

Begbies Traynor Group plc

Acquisition

Further expansion of Eddisons' regional footprint and offering

Begbies Traynor Group plc (the "group"), the business recovery, financial advisory and property services consultancy, today announces that it has completed the acquisition of Andrew Forbes Limited (Andrew Forbes).

Andrew Forbes is a firm of chartered surveyors employing 18 staff in Bristol and operating across the South West, founded in 1995. The business will integrate with Eddisons, the group's property division.

The Andrew Forbes team provides commercial valuation and building consultancy services, which aligns with the group's current service offering and strengthens our existing regional presence across the South West.

In its financial year ended 31 March 2023, Alexander Forbes generated revenue of £1.7m (unaudited) and normalised pre-tax profits of £0.25m (when reported on the same basis as the group). Trading currently is projected to maintain this level in the current financial year. It had net assets of £0.2m (including £0.3m net cash) at 31 March 2023.

Reasons for and benefits of the acquisition

The group's overall strategy is to increase the scale and quality of its businesses both organically and through value-accretive acquisitions, thereby delivering strong, sustainable financial performance.

Our strategy in property services is to enhance and broaden our service offerings and geographical coverage. Since the creation of the division through the acquisition of Eddisons in December 2014, the group has built a strong track record of acquisitions that have met these criteria. This strategy has increased the scale of the division from annual revenue of c£13m at inception to a current run rate of c£40m, demonstrating resiliency of earnings in a challenging economic environment, strong growth and profitability whilst enhancing the group's earnings.

The acquisition is in line with our strategy, with the Andrew Forbes team complementing our existing national valuations team, which will comprise over 100 people following this transaction.

Principal terms of the acquisition

The acquisition consideration is structured as follows, based on current levels of financial performance and on a cash free, debt free basis:

· Initial cash consideration of £0.5m;

· Earn out of up to £0.5m, payable in cash, subject to maintaining profits in the three year period post completion.

This gives a maximum consideration of £1.0m (on a cash free debt free basis).

The cash consideration will be met from the group's existing financial resources, with significant headroom available for further acquisitions and investment.

Anthony Spencer, Director at Eddisons, commented:

"I am very pleased to welcome the Andrew Forbes team to Eddisons. They have an excellent regional reputation which complements Eddisons existing strength in valuations and the South West. We continue to seek further opportunities for expansion across the UK."

Ric Traynor, Executive Chairman of Begbies Traynor Group plc, commented:

"The acquisition of Andrew Forbes is in line with our strategy to develop our property advisory and transactional services division, by increasing both its scale and market position, as well as the scope of its service offering and geographical coverage.

"The Andrew Forbes team is a long standing and successful business, and we are looking forward to working with them."

Enquiries please contact:

Begbies Traynor Group plc 0161 837 1700

Ric Traynor - Executive Chairman

Nick Taylor - Group Finance Director

Canaccord Genuity Limited 020 7523 8350

(Nominated Adviser and Joint Broker)

Emma Gabriel / Harry Pardoe

Shore Capital (Joint Broker) 020 7408 4090

Malachy McEntyre / Mark Percy / Anita Ghanekar / James Thomas

MHP 020 3128 8567

Reg Hoare / Katie Hunt begbies@mhpgroup.com 

Information on Begbies Traynor Group can be accessed via the group's website atwww.ir.begbies-traynorgroup.com