Begbies Regulatory News (BEG)

6 May 2005 09:55

Begbies Traynor Group PLC06 May 2005 RNS Release 6 May 2005 Begbies Traynor Group plc Acquisition of MCF Begbies Traynor Group plc ("Begbies Traynor" or "the Group") (AIM: BEG), theUK's largest independent firm of business rescue and restructuring specialists,today announces its biggest acquisition since listing on AIM in October 2004. Ithas acquired Leeds-based MCF Corporate Finance Limited ("MCF") for an initialconsideration of £1.85 million. Of the £1.85 million, £500,000 will be paid in shares in Begbies Traynor (to beissued at 85.5 pence each), to be held by MCF's former proprietors and subject to a one year lock in. The balance will be paid in cash; £1 million on completion and£350,000 over two years. Additional cash considerations are payable up to anaggregate of £1.85 million over the next five years, conditional on theachievement of specific profit realisations and overall profit growth targets inthe three years to 30 April 2008, giving a maximum total consideration of £3.7million. Founded in 1994, MCF was owned by its three full-time executive directors: TimEdwards, Steve Roberts and David Irwin, who are remaining with the Group as'partners'. Much of MCF's case referrals, like Begbies Traynor's, are fromgeneral practice accountants, where there are no commercial conflicts becauseneither Begbies Traynor nor MCF seek to advise companies on their audit or taxissues. MCF is a highly-respected specialist corporate finance business focussed onmedium-sized UK business clients. Much of its work is transaction driven,advising on approximately 25 such assignments a year, ranging in value up to £50million and the strong reputation of MCF has been built on the deals it has donein the mid-corporate sector. However, its activities also extend toinvestigative, refinancing and recovery assignments across a broad range ofindustry sectors throughout the UK. Last year, in recognition of its excellence, MCF won EN Magazine's YorkshireDeal of the Year in the £10m to £50m deal category and was nominated for'Boutique of the Year' in the prestigious European Venture Capital AssociationAwards. It has nine professional and two support staff, all of whom will be remainingwith MCF. In the year to 31 July 2004, MCF had a turnover of £1.45 million,producing operating profits of £406,000 after normalised directors'remuneration. The above terms and current trading and prospects of MCF allow the directors ofBegbies Traynor to conclude that the acquisition should enhance earnings pershare of the Group, both initially and after any additional consideration ispaid(1). Begbies Traynor's acquisition of MCF is a key element in its strategy to doublemarket share by 2007 through acquisitions and organic growth. It intends tooffer an increasing number of closely-related services beyond companyAdministrations and Receiverships in the mid-corporate market. The team at MCFhas embraced the challenge of developing Begbies Traynor's corporate financeservice throughout the UK, with an increased focus on services to "troubledbusinesses." Ric Traynor, Executive Chairman of Begbies Traynor, comments: "We're delighted to welcome the team of MCF to the Begbies Traynor Group. Thefirm is well-known and respected in the North, with a particular focus oncorporate finance in business turnaround and recovery. "By joining the Group, MCF has access to our network of contacts, which willenable Begbies Traynor to broaden our offerings, and develop new reciprocalrelationships with general practice accountants and corporate lenders, thusenhancing our referrer base." (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. Enquiries, please contact: Ric Traynor Neil Boom/Rosemary AcfieldExecutive Chairman Gresham PR Ltd.Begbies Traynor Group plc 020 7404 90000161 839 0900 Notes to Editors About Begbies Traynor Group plc The Group specialises in corporate insolvency management, offering expertise inadministrative receivership and liquidation services as well as personalinsolvency management including individual voluntary arrangements. It alsooffers services in the fields of corporate rescue and forensic investigation.The Group has grown to its current network of 23 nationwide offices ranging fromScotland to the South West of England, with over 240 people. The Company intendsto pursue a strategy of organic development, coupled with the acquisition ofspecialist knowledge of both individuals and firms, to further increase itsscope and range of 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 45 licensed insolvency appointment takers, some 140 feeearning staff and 55 in support and administration. In total the Group operatesfrom some 23 locations of which five are regional offices, a further eight arefull offices and ten are satellites. Business Activities The core business of the Group is the formal administration of insolvenciesincluding receiverships, liquidations, administrations, company voluntaryarrangements and personal insolvencies. The Group has recently extended itsactivities into a range of consultancy services including corporate rescue,credit management and forensic and investigation services. This information is provided by RNS The company news service from the London Stock Exchange