Begbies Traynor Group plc Acquires Pugh Auction Group Limited
Begbies Traynor Group plc today announces the acquisition of the entire issued share capital of Pugh Auction Group Limited. The 25 strong team, including management, will be integrated with the Group's existing Eddisons property services division.
Pugh & Co was established in 2000 and is the largest firm of commercial property auctioneers operating outside of London, with regular auctions held in Leeds and Manchester.
The combination of Pugh & Co with the Group's existing Eddisons auction business will become the third largest firm of commercial property auctioneers nationally (based on the total value raised from commercial property auctions in 2015. Source: Estates Gazette January 2016).
In the financial year ended 31 March 2016, Pugh & Co reported annual revenue of £2.0 million and pre-tax profits of £0.8 million. It had gross assets of £0.1 million as at 31 March 2016.
Principal terms of the acquisition
The acquisition is for an initial consideration of £2.0 million, to be satisfied in cash from the Group's existing resources. The acquisition is on a cash free, debt free basis.
Under the terms of the acquisition, additional contingent consideration of up to £2.625 million will become payable subject to the achievement of stretching financial targets for the consolidated auctions business (representing the existing Eddisons business and Pugh & Co) in the five year period directly following completion, calculated according to an agreed formula.
Up to £0.25 million of the contingent consideration is payable based on meeting financial targets in the first year post acquisition and may be satisfied through either the issuing of new ordinary shares at the prevailing market value or cash at the Group's discretion. The remainder of the contingent consideration is payable in cash over the five year period post acquisition.
The acquisition is expected to be earnings enhancing both initially, in the Group's current financial year which commenced on 1 May 2016, and after any additional consideration is paid.
Richard Roe, Managing Director of Eddisons, commented:
"I am very pleased to welcome the Pugh & Co team into Eddisons. The acquisition will enhance our auctions service offering by adding further depth and geographical coverage, complementing our existing operations."
Ric Traynor, Executive Chairman of Begbies Traynor Group plc, commented:
"I am pleased to announce this acquisition which is in line with our strategy to develop our property services division, to increase both the scope of its service offering and geographical coverage."