Mercury Group is buying City and West End firm Smith Melzack Pepper Angliss for an initial £1m in cash and shares along with another £1m of performance fees in shares and loan notes.
Mercury also announced it has agreed the terms of an option to buy London and Manchester-based Lee Baron, which employs 90 staff and had a turnover of £6.6m in 2003.
AIM-listed Mercury Group provides a wide range of professional services in the UK and Europe.
It is chaired by David Williams, who co-founded Telco Solutions in 2000 with former Grantchester chairman Paul Whight.
In December Mercury said it would expand its services to include a commercial property agency.
In order to finance the acquisition and to provide some additional working capital for the enlarged group, the company has placed 120m new shares with a small number of investors at 0.5p per share.
On completion of the acquisition Ronald Franks, who has been managing partner of Smith Melzack Pepper Angliss since 2001, will join the board of Mercury as an executive director.
Privately-owned City and West End agent Smith Melzack Pepper Angliss was formed following a merger between Smith Melzack and Pepper Angliss and Yarwood in 2001.
Last year it made an operating profit of £467,764 on turnover of £2.8m.
It has seven consultants and through its subsidiaries employs a further 25 staff.
Mercury chairman David Williams said: “The acquisition of Smith Melzack Pepper Angliss is an important step in achieving our stated strategy of building a vertically integrated European based property services group”.
References: EGi News 02/03/05
