GVA could pursue an IPO or merger within the next six months after directors voted to appoint an investment bank to explore options for the agent’s future.
Canaccord Genuity will examine a range of options with either a flotation of the business or a “strategic partnership” with another firm thought to be the most likely outcome.
Lloyds Development Corporation currently owns 27.5% of GVA and has been made aware of the plans. The firm reported a profit before tax of £7.8m in 2011-12 and with a goal of delivering pretax profits of £20m by 2016, a valuation comfortably in excess of £100m is likely.
Next year’s move of the majority of the business’s staff to a new office in the City is likely to deliver annual bottom-line savings of £1.5m alone.
GVA chief executive Rob Bould said the firm would use any windfall to buy out LDC and create a war chest to fund technology and staff investment to grow in the UK and overseas.
And he pledged to act quickly, warning that capital market sentiment could shift. “I’ve said whatever we are going to do, we’ll have done by MIPIM and we will have decided on the route by Christmas,” he said. “There was no IPO market nine months ago. [There is today] but it could shut again as quickly.”
While doing nothing or raising debt to buy out LDC were options also being considered, Bould said replacing one private equity backer with another was a less likely route.
But he emphatically ruled out some options. “We will not be selling to CBRE, JLL or Savills,” he said.
Staff were told of the plans at 8am this morning. Grant Thornton has been appointed to look at how to reward and incentivise staff as a result of any change of financial structure.
