Acquisition extends property division footprint
BEG’s latest acquisition, Banks Long & Co, adds to its property division’s profile, enhancing its existing presence in Eastern England and South Yorkshire. Banks Long & Co is a Lincoln based chartered surveyor with 38 employees, which operates across Lincolnshire and Humberside. It provides commercial property agency, property management, building consultancy and valuation services to a regional public and private sector client base.BEG has agreed to pay maximum consideration of £3m on a cash/debt free basis: £1.5m upfront (£1.125m cash, 0.292m shares) and the balance subject to aggregate £5.0m PTP generated during the five-year period post completion. The cash will be met from existing financial resources with significant headroom still available to finance further investments.The acquisition is expected by BEG to be immediately earnings enhancing, and fits with the Group strategy to build the scale and quality of its business organically and via value-accretive acquisitions.
We hold our forecasts until BEG’s full year trading update, expected later this month, and also maintain our 175p / share fair value.
Begbies Traynor Group is a business recovery, financial advisory and property services consultancy. Co. provides these services through two operating segments: business recovery and financial advisory services, which provides transactional support, valuations and advisory services through its subsidiary, BTG Financial Consulting LLP; and property services, which delivering advisory, such as commercial property valuations, property receiverships, property management and accounting, and as well as transactional services that include property auctioneers, machinery and business asset auctioneers to owners and occupiers of commercial property, investors and financial institution.
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