BTG Begbies Traynor acquisition further expansion of BTG Eddisons' regional footprint and offering

BTG Begbies Traynor plc, the business recovery, financial advisory and property services consultancy, today announces that it has completed the acquisition of BLC No1 Limited, which trades as Banks Long & Co.

Banks Long & Co is a firm of chartered surveyors employing 38 staff in Lincoln and operating throughout Lincolnshire and Humberside. The business will integrate with Eddisons, the firm's property division.

The Banks Long & Co team provide commercial property agency, property management, building consultancy and valuation services to a wide range of regional clients including public and private sector organisations, which aligns with the firm's current service offering and strengthens our regional presence across Eastern England and South Yorkshire.

In its financial year ended 31 August 2022, Banks Long & Co generated revenue of £2.6m (unaudited) and normalised pre-tax profits of £0.4m (when reported on the same basis as the firm). Trading is projected to at least maintain this level in the current financial year to date. It had net assets of £2.1m (including £1.4m cash) as at 31 August 2022.

Reasons for and benefits of the acquisition

The firm's overall strategy is to increase the scale and quality of its businesses both organically and through value-accretive acquisitions, thereby delivering strong, sustainable financial performance.

Our strategy in property services is to enhance and broaden our service offerings and geographical coverage. Since the creation of the division through the acquisition of Eddisons in December 2014, the firm has built a strong track record of acquisitions that have met these criteria. This strategy has increased the scale of the division from annual revenue of c£13m at inception to a current run rate in excess of £30m, demonstrating strong growth and enhancing the firm's earnings.

The acquisition is in line with our strategy, as the Banks Long & Co team will strengthen our existing offering and footprint in Eastern England and South Yorkshire and follows the recent acquisitions of Mark Jenkinson & Co (March 2023 - Sheffield) and Budworth Hardcastle (June 2022 - Eastern England). The acquisition is expected to be immediately earnings enhancing.

Principal terms of the acquisition

The acquisition consideration is structured as follows, based on current levels of financial performance and on a cash free, debt free basis:

• Initial consideration of £1.5m, payable £1.125m in cash and through the issue of 292,170 new ordinary shares;
• Earn out of up to £1.5m, subject to growing the profitability of the business, with the full payment subject to aggregate pre-tax profits of £5.0m over the five year period post completion. 

This gives a maximum consideration of £3.0m (on a cash free debt free basis).

The cash consideration will be met from the firm's existing financial resources, with significant headroom available for further acquisitions and investment.

Application has been made to the London Stock Exchange for the 292,170 new ordinary shares to be admitted to trading on AIM. It is expected that admission will become effective at 8.00 a.m. on 10 May 2023 following which the total number of shares in issue and total voting rights will be 154,803,994. The firm does not hold any shares in treasury and, therefore, the above figure may be used by shareholders as the denominator for the calculation by which they will determine if they are required to notify their interest in, or a change to their interest in the company. 

Anthony Spencer, Director at BTG Eddisons, commented:

"I am very pleased to welcome the Banks Long & Co team to BTG Eddisons, which extends our footprint into Lincolnshire and enhances our existing presence in Eastern England and South Yorkshire. The Banks Long & Co team are highly experienced with a proven track record in delivering high quality professional advice to public and private sector clients. We continue to seek further opportunities for expansion across the UK."

Ric Traynor, Executive Chairman of BTG Begbies Traynor, commented:

"The acquisition of Banks Long & Co is in line with our strategy to develop our property advisory and transactional services division, by increasing both its scale and market position, as well as the scope of its service offering and geographical coverage.

"Banks Long & Co has excellent relationships within its local market place offering its clients a broad range of real estate services which they have developed over many years and we are very much looking forward to working with them."