Countrywide-owned Lambert Smith Hampton is in advanced talks to take over rival agent ES Group.
The deal – which could be announced later this month – follows a £100m extension to Countrywide’s £150m revolving credit facility, which was agreed by Abbey National, AIB Group, Barclays, HSBC, Lloyds and NatWest this week.
ES Group employs more than 300 staff in 10 offices around the country and posted a turnover of £21.4m in 2014.
Countrywide, LSH and ES declined to comment on the talks or the pricing. However, applying the 10-times multiple-to-earnings seen in recent agency takeovers, such as Bilfinger’s acquisition of GVA, would value ES Group at around £38m.
The takeover – which follows LSH’s acquisition of Northern Irish agent BTW Shiels in June last year – would push the combined firm closer to the top 10 of EG’s Top Agents rankings.
The BTW Shiels acquisition was designed to help LSH better serve its large private equity clients, such as Cerberus, which have been highly active in the non-performing loan market, by providing a stronger platform in Ireland.
ES Group would further strengthen LSH’s offering to NPL buyers given its strength in banking and insolvency, according to a source with knowledge of the deal.
The company is itself the product of a December 2011 merger between Edward Symmons and North East-based Storeys:ssp.
That deal was designed to pair Edward Symmons’ strength in LPA receivership and corporate recovery with Storeys:ssp’s regional strength, in anticipation of a surge in such activity post-recession.
The deal would strengthen the combined firm’s offer in London, Birmingham, Bristol, Leeds, Manchester, Newcastle, Nottingham and the Solent.
ES Group also has offices in Liverpool and Exeter, where LSH does not have a presence.
The acquisition reflects a remarkable turnaround in LSH’s fortunes in the past 18 months. The company was facing a painful restructuring of its debt burden before owner Sankaty – a subsidiary of Bain Capital – agreed the sale to Countrywide in June 2013.
Countrywide is the UK’s largest estate agency group. It has expanded rapidly via a string of acquisitions and was floated on the stock exchange in March 2013.
The group’s acquisition of LSH represented its first significant move into commercial property. At the time it said it saw “an opportunity for further market penetration”.
Announcing the company’s new £250m revolving credit facility on Monday, group chief financial officer Jim Clarke said: “We are pleased that our existing banking partners continue to support us and we are able to continue our strategy for growth, both organically and through acquisitions.”
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