Leaders Romans Group, one of the UK’s largest property services groups, could reportedly be put on the market as the company’s owners’ look to take advantage of favourable property market conditions.
According to Private Equity Insights, a major networking platform, LRG, which last week completed its fifth acquisition of the year, has appointed bankers from NM Rothschild to work on a ‘strategic review’ of the business, which could lead to a sale later this year.
It is understood that the owners of LRG are likely to seek a valuation of about £400m from a sale.
The possible disposal follows the recent property boom, fuelled in part by the government’s stamp duty holiday, which Private Equity Insights says has ‘triggered a potential round of corporate activity in the property industry’.
Chestertons was last week put up for sale, after hiring Deloitte, the professional services firm, to offload the business.
The company, which was founded in 1805, operates close to 30 offices across the London, and is owned by an investment vehicle of Salah Mussa, a Libyan businessman who acquired it in 2005.
Thundering Herd looking for an exit. Strike whilst the iron is hot Follow the money ! .
It will be very interesting to see the market appetite for both Romans and Chestertons .
It’s been sometime since some fresh fish have floated .The market .having sat back and watched Countrywide roll like a drunken sailor over the last few years issuing more shares and diluting shareholder value before Connells took them out of their misery
The market will be watching very closely
Difficult to assess the financial position of Romans from the accounts as the latest set of accounts at Companies House only takes us up to Dec 2019 where revenue was £117m unchanged from the year before
With an operating loss of £9.5m (after exceptional items and amortisation ) and a total loss of £43 .5 m They refinanced in 2019 with a £125m loan with Carlyle and an additional £25m for expansion + a £2m facility with Nat West .
On the face of it a £400m price tag looks a little smokey but they have been busy buying since Only last week they acquired Dewhurst Lettings in Swindon buthey would have had a good year
Roll back to 2013 when Countrywide appeared back in the market after a similar expansion exercise as their financial backers Oakleigh looked to cash in some chips A large debt cranked up buying in businesses for cash and we all know how well that worked out !
Bowmark Capital arrived at Romans shortly after acquring them in 2014
Romans like Countrywide not only have they been acquiring residential sales and lettings ,surveying and financial services buinesses but commercial agents too
Acquired Dunlop Heywood in Jan 2020 .The timing could have been a little better as immediately plunged into COVID !
Are Chestertons and Romans just the hors d’oeuvres ?. Could we see others following suit?
What abouthe big beast Connells.They would have enjoyed a bumper year after swallowing Countrywide which would have franked the purchase Maybe the Skipton would like to take the opportunity to cash in some chips?
Early days but maybe Oakley Capital might look to get a swift return on their investment in Dexters which would be received well ?
Interesting times ahead .
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Smokey is a good way of describing the valuation as there have been mixed fortunes across the listed firms. Recent valuations in the sector have been way off the mark.
After Countrywide’s disastrous run on the stock market with its value crashing to what, a tenth of its previous value? Foxtons was worth twice as much five years ago, compared with today. 105p per share vs 53p today.
And PB of course. PB floated at £1 a share with big promises made to investors, rocketed to £5 a share at its peak and at today’s price of 62p a share all of their original investors have lost money. No dividends for shareholders anywhere in sight.
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More bad news for the sales side of Leaders and Romans, meanwhile all their recent acquisitions seem to be on the lettings side.
Lettings getting bigger and sales get smaller. Sad to see
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Whilst nothing surprises me anymore a £400 million price tag for a business that has almost £300 Million of debt (so I am told) sounds ridiculous. Be interesting to see how this plays out.
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Agree. Why are most estate agents owned by single operators? Because after you take a managers salary out, most agents aren’t profitable
It’s a dead industry made worse by rightmove allowing pay anyway and d.i.y agents on its platform.
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I imagine the sale would exclude the debt
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A potentially sensible move, and IMHO something of a “getting out whilst the going’s good” strategy.
Anyone who follows the markets, central Bank activity and the general wider economic environment, will know that we’re fast approaching an economic cliff-edge. Markets are on steroids across the board, and it won’t last much longer.
“a little smokey” is one way of describing the proposed sale value of the business…optimistic to the point of drug-induced euphoria, is another.
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Following on “Where there is smoke there is fire”
As Eyereader points out if not now, when? Belvoir reporting favourably this morning
“Having reported H1 profitability considerably ahead of our start of year expectations, and given the Group’s further investment in earnings enhancing businesses to expand both the property and the financial services divisions, and high activity levels within all areas of our business at the start of H2, the Board is confident of achieving a strong trading performance for the full year.”
So good time with forward momentum still going into Q4 .
What the Countrywide story showed was the huge mistake of buying in revenue ( which has a nasty habit of disappearing with individuals ) with hard cash not paper and increasing debt.
Bowmark will be looking to replace some of that debt with equity
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Bowmark are looking to exit. As PE firms do. No problem with that. They have wanted to for a while. The likely buyer of their equity will be another PE firm who feels they can double or triple the firm’s size.
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