Estate agent Belvoir to merge with rival The Property Franchise Group

Belvoir Group is set to merge with rival The Property Franchise Group, creating a combined business with a market capitalisation of more than £214million.

The deal, should it be approved by shareholders, will create one of the UK’s largest multi-brand lettings and estate agency groups with more than 930 property franchise locations and around 152,000 tenanted properties across the country.

Belvoir told shareholders on Wednesday the deal will see the combined business sell more than 28,000 properties per annum, compared to the 10,970 it sold in 2022 and the 4,177 exchanged in the first half of 2023.

Merger: The combined business will have a  market capitalisation of more than £214m

The firm’s shareholders will receive 0.806377 new TPFG shares for each share they own, valuing the shares at 277.4p apiece – a premium to the 256.5p at close on Tuesday.

Belvoir Group specialises in rental properties, with a focus on the Midlands and the North, but has expanded into sales and mortgage advice.

Founded in the 1990s and listed on AIM in 2012, the company runs hundreds of estate and letting agencies, managing homes on behalf of landlords and tenants.

The company also benefits from operating a franchise model, with 240 franchisees running 335 offices across the country.

Belvoir defied difficult market conditions in the half-year result after the Lincolnshire-based company’s financial services arm saw revenues soar on bumper demand for mortgage refinancing and product transfers. 

TPFG Property Franchise Group runs a pure franchise model under multiple brands, such as Hunters, Ellis & Co and Parkers.

Belvoir and TPFG generated combined revenues of £60million in 2022, with management service fees of approximately £27million and adjusted earnings before nasties of approximately £22.5million.

It is intended that the combined group will be led by TPFG’s chief executive Gareth Samples, its finance boss David Raggett and Paul Latham as chair, and Belvoir non-executive director Michelle Brook.

Upon completion of the merger, Belvoir shareholders will hold approximately 48.25 per cent of the combined group while TPFG shareholders will hold approximately 51.75 per cent.

The deal is expected to be completed in the first quarter of 2024.

Belvoir Group shares were up 1.8 per cent to 261.15p approaching midday on Wednesday. 

TPFG shares were down 1.3 per cent to 339.44p.

Latham said: ‘We believe that the merger represents a compelling opportunity for all shareholders.

‘Belvoir brings further breadth through its nationwide network and a financial services business which will be complementary to our current offering. The merger will enable us to continue to grow in the sector and, ultimately, deliver greater value to shareholders of the combined group.’

Jon Di-Stefano, non-executive chairman of Belvoir, added: ‘The merger of Belvoir and TPFG combines two businesses with much in common, each supporting a network of entrepreneurial franchises, and will create one of the UK’s largest multi-brand lettings and estate agency groups combined with a growing financial services business.

‘With their complementary geographic footprints providing both scale and diversification across a variety of high street and hybrid brands combined with high levels of recurring revenue, we feel sure that the combined group will provide a robust platform from which to grow.’

This post first appeared on Dailymail.co.uk