In-Deed Online plc Acquisition of Top Ten Conveyancing Firm
The Board of In-Deed Online plc is delighted to announce the acquisition today of 100% of the issued share capital of Runnett & Co Ltd ("Runnetts") from its founding shareholders Matthew Lewis and Paul Thomas.
Runnetts is a firm of licenced conveyancers which is amongst the top 10 conveyancing firms in England and Wales as measured by returns to the Land Registry. Its clients are spread across the UK and are predominantly sourced through its long standing relationships with some of the UK's largest estate agency companies. Its principal operations are at Bridgend in South Wales with a small but growing conveyancing business based in London providing a premium service to clients within the M25.
Runnetts' statutory accounts for the period to 30 September 2010 show sales of £53k and net assets of £(10)k. Unaudited pro forma management accounts for the year to 31 March 2012 show operating profits of £245k on sales of £3.9m. Total consideration is set at 5 times average taxed profits over the 4 years post completion, with a cap of £4m. The initial payment for the shares is £225k in cash plus repayment of directors loans totaling £350K. Subsequent payments are determined by actual profits and a proportion may be satisfied with In-Deed shares at the election of the Board. The founders will remain with the Group.
In-Deed's direct to consumer channel has grown more slowly than was hoped at the time of IPO and the acquisition of Runnetts gives In-Deed immediate scale in the UK conveyancing market. It is envisaged that the skills of the In-Deed team can make a significant contribution to growing Runnetts' sales as well as improving efficiency of the current operations. In-Deed will continue to develop its direct to consumer channel, and work from this will be increasingly undertaken by Runnetts, but it will also focus on the expansion of the business servicing corporate estate agencies. The London operations of Runnetts will be rebranded and focus on the independent estate agents within the M25 where personal service and local presence are important, and margins are attractive.
Commenting on the acquisition, Harry Hill, Executive Chairman, said "Some months ago we made it clear that our consumer business was not growing fast enough and that therefore we would explore the opportunity to acquire high quality and profitable conveyancing companies. Runnetts is exactly that and we are truly excited at the prospect of making it part of the In-Deed business. Not only does it give us immediate scale but it diversifies our distribution channels and takes us a step further towards creating a market leading conveyancing business.
"Our ambition remains to become one of, if not the, largest high quality provider of conveyancing services in the UK. To this end, we continue to progress our discussions with law firms, conveyancing firms and estate agency companies and look forward to updating our shareholders in due course."