Prospective buyers have begun circling Strutt & Parker as the firm begins a process to target new acquisitions of its own.
Boutique investment bank Evercore has been appointed to source funds to finance prospective acquisitions as Strutts looks to expand its network of 45 estate agency locations. Strutts refused to comment on whether Evercore’s appointment was also in relation to a prospective sale.
Last week senior partner Andy Martin told Estates Gazette: “We have just started a five-year plan and I don’t want to give it to anybody else.”
The partnership’s previous insistence that it is not available for purchase is not thought to have put off prospective buyers of the firm including CBRE and Lambert Smith Hampton owner, Countrywide.
Market sources, including advisory firms engaged by potential buyers and interested parties, valued the company at £120m-£130m.
Any ultimate purchaser of the business would get a high-end regional residential business with a high street presence, a respected commercial arm, with a particularly strong central London investment practice, and a sizeable rural business.
The news comes on the back of record results for Strutts, which reported pre-tax profits last week of £27.8m on a turnover of £111.3m for the year to 30 April 2015.
A sale of the business would see Strutts clear its pension liabilities and the company’s debt. Strutts’ 49 partners could each pocket an average of £2.5m.
The make-up of the Strutts partnership agreement is understood to allow a relatively straightforward separation of the commercial and residential arms, enabling interested parties to bid for only one element.
If Countrywide was to buy the business, it would complement its existing estate agency network, which is the largest in the country. It could retain the Strutts brand, which would give it access to the luxury market. The commercial side of Strutts would also sit neatly with LSH, which has a stronger regional presence.
Listed Countrywide is on the expansion trail. At the end of last year, it made an unsuccessful approach for Deloitte Real Estate and this week bought Lanes Land and New Homes to expand its residential development sales business.
Prospective global purchasers such as CBRE, which has long been associated with a potential bid for Strutts, would be less likely to retain the brand.
The property advisory world has seen a rush of merger and acquisition activity over the past year as firms look to build economies of scale and global brands. Last week Bilfinger appointed advisers following approaches for its real estate businesses, including Bilfinger GVA.
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