Begbies Traynor expands insolvency practice with London acquisition
25 Oct 2019
Begbies Traynor Group is continuing a flurry of takeover activity, paying over £2m to add top 20 UK insolvency practice Alexander Lawson Jacobs Ltd (ALJ) to its recent string of acquisitions
25 Oct 2019
The group has acquired the entire issued share capital of London-based ALJ which is ranked in the top 20 by insolvency appointments. In the financial year ended 30 June 2019, ALJ reported annual revenue of £3.1m and pre-tax profits of £900,000, when reported on the same basis as the group. It had gross assets (excluding cash) of £500,000 as at 30 June 2019.
The acquisition is for an initial consideration of £2.35m, to be satisfied by £2.1m in cash from the group's existing resources and through the issue of 296,195 new ordinary shares of 5 pence each in the group. The acquisition is on a cash free, debt free basis.
Under the terms of the acquisition, additional contingent consideration of up to £4m will become payable subject to the achievement of financial targets for the business in the five year period directly following completion.
ALJ’s team of 24 directors and employees will join Begbies Traynor, which says the move is in line with its strategy to increase the scale and market share of its insolvency practice. The firm has also recently announced the acquisition of Leeds-based business transfer agent Ernest Wilson and Exeter-based turnaround advisory firm Regneratus.
Ric Traynor, executive chairman of Begbies Traynor Group, said: ‘I am very pleased to welcome the Alexander Lawson Jacobs team to the group. They are an experienced team with a strong recent growth record, which will enhance our existing strong network of offices across London and the South-East.’
In September, Begbies acquired Regeneratus Consulting 1, an Exeter-based advisory practice specialising in restructuring, turnaround and legal issues, while earlier in the year it bought KRE (North East) Ltd, a Newcastle based insolvency practice in a bid to strengthen its presence in the region.
Analysts reacted positively to the latest acquisition.
Canaccord said that Begbies Traynor remained ‘a compelling counter-cyclical UK domestic play and subsequently have raised their TP to 105p and reiterated their buy rating’.
Shore Capital highlighted that since the placing in July 2019, three acquisitions have been completed and subsequently they expect these acquisitions to add an estimated £1.8m on a full-year basis to their current 2021F PBT forecast of £9.7m and on a pro-rata basis, they expect the combined acquisitions to add £1.0m to their 2020F PBT forecast of £8.6m.
By Pat Sweet, additional reporting Sara White