Belvoir has announced the acquisition of Newton Fallowell, one of the largest estate agents in the east midlands.

The deal, for up to £6.38m, which is due to go through at the end of this month, will add 31 offices to the Belvoir network, bringing it up to 193 branches.

Newton Fallowell is a franchise business founded by Mark Newton in 1999. Newton is staying on for at least two years and the brand will retain its identity.

The deal also brings with it Newton Fallowell’s experience in estate agency. While Belvoir started out as a lettings-only specialist, it has more recently expanded into sales.

Newton Fallowell has its headquarters in Grantham, where Belvoir is also headquartered.

The acquisition involves an initial purchase price of £3.9m cash, with an additional earn-out of up to £2.33m cash determined by Newton Fallowell’s performance between completion of the deal and the end of February 2017.

The initial payment will be funded by the placing of new shares, raising £4.28m.

Dorian Gonsalves, Belvoir’s director of commercial and franchising, said the acquisition will propel Belvoir into the top five largest lettings and estate agency chains in the country.

He said: “This really was a golden strategic opportunity for Belvoir as Newton Fallowell is a highly successful and well-established estate and lettings agency.

“When Belvoir floated on the London Stock Exchange in 2012 we made a clear promise to our network and our investors that we would reach 200 offices before the end of 2016.

“With further acquisitions in the pipeline, this puts us well ahead of our target.

“The opportunity for Belvoir to acquire Newton Fallowell also demonstrates Belvoir’s commitment to significantly increasing its market presence and continuing to develop the network with multi-brand franchises.

“Newton Fallowell’s franchise owners will be able to benefit from their association with Belvoir. Likewise, our existing network of sales and lettings offices can also benefit from being part of a significantly larger network with the additional high-level expertise of an enlarged senior management team.”

As well as Mark Newton, who stays on as chief executive of Newton Fallowell, directors Andrew Derry and David Newton also remain with the business.

Gonsalves said: “The acquisition also marks the return of franchise director David Spackman to Belvoir.

“Prior to joining Newton Fallowell, David worked for Belvoir for two years and he has excellent knowledge of the company’s business model.”

Newton said of the deal: “I would say that this is a business match that was made in heaven.

“I will be remaining with the business, which will continue to be run by the same people in a similar manner, but will have the added strength and support of Belvoir as its parent company.

“This will have a very positive impact on our franchise owners who can only benefit from being part of such a large and successful company.

“Similarly, our strength and expertise in estate agency, which has been carefully developed over many years, can only help to enhance brand Belvoir, so this is a very exciting milestone for the business.”

Dorian Gonsalves, left, is pictured with Mark Newton