The ‘super-deal’ acquisition by Belvoir of Northwood has valued the latter at up to £22m.

Just over half, £11.5m, is being paid up-front and the remainder after a two-year earn-out.

Managing director Eric Walker told EYE last night: “I am absolutely delighted with the deal with our friends at Belvoir.

“There is great synergy and shared ideals illustrated by the ease with which terms were agreed and concluded. This is an immensely exciting  announcement for both companies in creating the biggest property franchise business in the UK.

“We are all looking forward to the opportunities it creates.”

According to Companies House, it looks as though Andrew Goodson holds 75% of Northwood’s shares and chief executive Gemma Goodson 25%.

Belvoir and Northwood, individually respected franchise firms, are together now propelled into top place as the UK’s largest property franchisor with 301 outlets, compared with Martin & Co’s 290.

There could be a question mark as to whether there will continue to be two head offices – Northwood is based in Fareham, Hampshire, and Belvoir in Grantham, Lincolnshire.

Ian Wilson, CEO of Martin & Co, said: “Congratulations to the Belvoir management team on this significant acquisition.

“Between Belvoir Plc and MartinCo Plc we now manage in excess of 110,000 properties and operate across almost 600 offices.

“This is positive poof of the power of franchise business models in the property sector.

“If independent agents want to fight back against the corporate chains and the online portal agencies they need the strength of a bigger brand above their door and full head office support with marketing, training, compliance and funding for expansion.”

Glenn Ackroyd, of franchise firm EweMove, said the deal made sense for both Belvoir and Northwood.

He said: “It allows the combined entity to achieve savings by removing duplicated costs.

“The real test will be on the ability of the current leadership to drive through additional benefits over and above the sum of the parts.

“Northwood have got a decent price, and at an eight times multiple on earnings, Belvoir can demonstrate good value to the City. It seems like a win-win to me.

“But looking at the bigger picture, the merger simply results in a larger traditional player. It doesn’t address the movement towards hybrid agents.”

The acquisition is partly being funded by a placing of new ordinary shares in Belvoir at the price of 112p per share, hoping to raise £2.5m.

The placing is being done through an accelerated bookbuild process that was launched immediately. Cantor Fitzgerald Europe is acting as the bookrunner for the firm.

Cantor Fitzgerald Europe will agree the final number of shares to be placed, and will decide the timing of the bookbuild and allocation of the shares.

The £22m price tag of 88-office Northwood inevitably raises question marks over the valuations of online agents which have yet to get into profit.

Earlier this week, we reported that HouseSimple has raised a further £13m, which values the online agent at around £40m – nearly double what Belvoir are paying for Northwood.

Purplebricks has a market capitalisation of £312m – huge, measured against the £22m actual price tag for the well established Northwood.