Begbies Regulatory News (BEG)

2 Aug 2005 16:00

Begbies Traynor Group PLC02 August 2005 RNS Release 2 August 2005 Begbies Traynor Group plc Acquisition of Taylor, Gotham and Fry Begbies Traynor Group plc ("BTG" or "the Group") (AIM: BEG), the UK's largestindependent firm of business rescue and restructuring specialists, todayannounces its largest acquisition since listing on AIM in October 2004. It hasacquired Essex-based Taylor, Gotham and Fry ("TGF"), an unincorporated firmspecialising in insolvency services, with offices in Essex, Kent and the WestEnd of London. The transaction involves the purchase of the goodwill and tangible tradingassets of TGF. The consideration comprises a cash payment of £3 million oncompletion plus a deferred consideration, estimated at £3.5 million over fiveyears (to be paid as two thirds in cash and one third in BTG shares),conditional on the achievement of specific fee realisations. Tangible fixedassets and work in progress are valued at approximately £300,000 with thebalance of the consideration representing directly acquired goodwill. BTG announced on 15 July 2005 the placing of 6,200,000 Ordinary Shares of fivepence each at £1 per share, raising £6 million after expenses. The funds raisedwill be partly used in paying the above initial consideration and the balancewill fund the continued planned expansion of the Group. TGF has a similar mix of business and personal insolvency activities to BTG,with six appointment takers, 20 fee earning staff and 13 (full time equivalent)in support. Its unaudited accounts for the year to 31 March 2005 reportedturnover of £3.5 million. TGF has an existing association with BTG, in that italready uses the Group's brand name and administrative systems, for which itpays BTG a royalty fee. After allowing for that fee and the proposed ongoingremuneration of its principals, the operating profit of TGF for the year to 31March 2005 was £1.1 million. The activities of TGF will be combined with BTG's South Eastern regionalsubsidiary operation, although TGF will continue to trade from its existingoffices. The two controlling principals in TGF will continue with BTG and takean active role in the management of the whole of the Group's operations in theSouth Eastern region. BTG's purchase of TGF is its fourth acquisition since listing on AIM in October2004. It is the Group's aim to grow its market share in insolvency services to10% by 2007 through continued organic growth and further acquisitions and todevelop further ancillary activities. This acquisition should be immediately earnings enhancing and has the strategicbenefit of increasing the Group's activity base in the South East to a levelcommensurate with the economic importance of that region, whilst alsointroducing a dynamic and entrepreneurial additional management team to thatoperation(1). (1)This statement should not be taken to mean that the earnings per share of theGroup will necessarily match or exceed the historical reported earnings pershare of the Group and no forecast is intended or implied. Ric Traynor, Executive Chairman of Begbies Traynor Group, comments: "We're delighted to welcome Taylor, Gotham and Fry as a full member of BegbiesTraynor Group. The skills and energy of Mark Fry and Jamie Taylor and theirpartners and staff will be invaluable in the continuing development of ourpresence in the key South Eastern region, providing a platform for significantorganic growth." Enquiries, please contact: Andrew Dick Neil Boom/Rosemary AcfieldChief Operating Officer Gresham PR Ltd.Begbies Traynor Group plc 020 7404 9000020 7398 3800 Notes to Editors About Begbies Traynor Group plc The Group specialises in business insolvency management and is becomingincreasingly active in the area of personal insolvency. It also offers servicesin corporate rescue and forensic investigation and has entered the field ofcorporate finance through the acquisition of MCF Corporate Finance. In addition,the Group recently acquired FDB International, an established commercialinvestigation and security agency. The Group has grown to its current network of 29 nationwide offices ranging fromScotland to the South West of England, with over 300 operatives. The Companyintends to pursue a strategy of organic development, coupled with theacquisition of specialist knowledge of both individuals and firms, to furtherincrease its market share in its core services. The Directors believe that the Group is the UK's largest independent insolvency,corporate rescue and recovery specialist with clients ranging from majorinstitutions to individuals with business difficulties. The Office Network The Group operates with 65 licensed insolvency appointment takers, some 175 feeearning staff and 68 in support and administration. The Group operates from 29locations of which five are regional offices, a further eleven are full officesand thirteen are satellites. Business Activities The core business of the Group is the formal administration of insolvenciesincluding receiverships, liquidations, administrations, company voluntaryarrangements and business-related personal insolvencies. The Group has extendedits activities into a range of consultancy services including corporate rescue,credit management, forensic and investigation services and corporate finance. This information is provided by RNS The company news service from the London Stock Exchange