Hunters, co-founded by the MP Kevin Hollinrake, has acquired Besley Hill, a franchise network of 15 outlets operating in Bristol and Gloucestershire.
The purchase price is for a total consideration of £2.5m, of which £2.25m is being paid in cash. The rest will be in the form of ‘consideration’ shares – 421,578 at 59p each.
Hunters is part-funding the cost of the acquisition by raising £1.32m in a new shares placing. Altogether 2,400,000 new shares have been conditionally placed with investors at 55p each, with admission of these new shares expected to be at 8am tomorrow.
The acquisition takes the number of branches within the Hunters national network to over 200 and gives Hunters a foothold in the south-west.
Besley Hill, which dates back to the 1970s, had net assets of £344,238 as at the end of March last year.
In an announcement to the Stock Exchange, Hunters says that adjusted accounts for 2016 would have shown that the franchised branches produced management revenue for the franchisor of £340,000 with EBITDA of some £290,000.
Hunters says that the deal will be earnings enhancing in the first full year following acquisition.
In a trading update, Hunters also said that it had a “strong finish” to last year. The firm had already announced, in December, that its results for 2016 will be ahead of market expectations.
It has now said that new instructions this year are up 8% on the same period last year.
Glynis Frew, CEO of northern-headquartered Hunters, said of the latest deal: “Becoming the UK’s favourite estate agent is our primary objective and increasing our presence across the country through good-quality businesses is vital to achieving this.
“We are delighted to welcome the Besley Hill group of branches to Hunters as we share an ambition to grow our businesses by delivering first-class customer service.
“The locality of the branches fits perfectly within our national expansion plans and gives us a significant platform in the south-west property market.”
Adam Offer, managing director of Besley Hill, said: “Hunters’ national reach and reputation, combined with its strong focus on local ownership and local knowledge through its franchise model, is very exciting for us and represents great opportunities for the future.”
Adam Offer and finance director Alli Firks-Matthews have agreed to sign up their own three offices to new franchise agreements with Hunters as part of the deal. The pair will continue to be involved in the day to day running of the business.
Hunters has continued to expand consistently, both organically and through acquisitions, over the last decade.
Each year for the last three years it has grown by 30 or more new branches across the country.
Hunters opened its first office in York in 1992 and its first franchising branch in 2006.