The corporates are raiding their treasure chests to go on major acquisition trails of independent high street agents – and if not their businesses, their lettings portfolios.
In a buying spree unprecedented for years – probably since the eighties – the prices they are prepared to pay appear to be at the very top of the spectrum.
One two-branch business has just sold to Countrywide for a reported £1m-plus.
In the rush to consolidate their business, the buy-buy is translating to a bye-bye for some owners, allowing them to retire, follow their dreams or make their loved ones their priority.
In other cases, some partners are staying with the businesses post-acquisition while others are being enabled to leave.
The corporates also seem keen to get top quality local staff with the businesses they are acquiring, with no job losses yet reported to Eye.
In one of the latest deals, Underwoods Town & Country, with offices in Northampton and Wellingborough, has been sold to Countrywide for what is reported to be a seven-figure deal.
Underwoods was bought by Karen Southcott ten years ago through business transfer agency Watersheds.
She was subsequently joined in the business by her daughter, Laura Crouch, who has recently had a baby and who says her priorities have changed.
Watersheds has now completed the sale of the two-branch business to Countrywide at a reported £1m plus.
While Countrywide has yet to announce the acquisition, Watersheds has gone public with it, calling the deal a triumph for the mother and daughter team who built up their business with such success. More on this story here
Meanwhile LSL, the UK’s second largest chain of estate agents, is on the prowl for further acquisitions and yesterday evening revealed that it has doubled the size of its acquisitions team.
So far this year, its LSLi brand has bought six-branch London firm Hawes & Co, and Thomas Morris, with branches in Cambridgeshire, Bedfordshire and Hertfordshire.
Last year, LSL bought ten lettings books, and has acquired a further nine lettings portfolios this year, with more in the pipeline.
LSL owns a number of estate agency brands, including Your Move, Reeds Rains, Marsh & Parsons and Davis Tate. Its LSLi brand offers both growth and exit strategies to agents.
David Brown, LSL’s commercial director, said: “Acquisitions are a key part of our strategy.
“We understand that many independent agents have spent years in building their brand and reputation but have reached a stage where they need a helping hand to either grow their business or plan for their exit or retirement.
“We can provide that support and, by doubling the size of our acquisitions team, are actively looking to acquire even more businesses this year – building on our success so far.”
Meanwhile Sequence, part of Connells, has said it plans to add 75 new lettings branches to its network within the next six months.
Comments (4)
The real losers are the customers who signed up for an independent and suddenly find themselves in bed with a faceless corporate whose true north is delivering shareholder value. Customers can always exit and many do but I guess for the few that cannot be bothered to move agents the corporates are rubbing their hands with glee.
People who sell their own houses seldom get the best price and the same is true when selling a business. In a sellers’ market you will nearly always get a better price for your business by using a specialist broker who will advise on the correct guide price, identify buyers other than the obvious corporate chains, run an effective marketing campaign, negotiate offers, negotiate on going service contracts and other terms and conditions, ensure that the sale is structured in a tax efficient way and ensure that the sale goes through successfully first time.
Adam,
I was expecting a big plug but it never came! 🙂
Cheers Anthony
I have to say I don’t quite understand the bit about exit or retirement. I can understand bailout buyouts and why with the 23rd June deadline for protecting pre 2007 deposits there might be a few of those about at the moment, but I can’t see the benefit of exiting to grab a wad of cash that then creates a 40% inheritance tax planning issue and yields which are invariably lower than those available with a properly considered, inheritable succession plan that keeps a good business in the family.
I have done the retired thing, it is great for 3 months and is then like a prison sentence of comparative isolation. One of the worse things about selling a business is watching the destruction of values, morale and lives. As I once said to Geoff Core (respect!) it is like taking a fit dog to the vet and watching in horror as routine goes horribly wrong and a much loved pet is put down. (trust me, it hurts like hell)
There is good reason why 30 year of corporate cash has bought a stubbornly stable 20% (ish) of the industry with big corporations coming and going, My apprenticeship into agency (1986) was with a firm soon split by Prudential, fortunately I was in the independent half and built a career off that foundation. My advice to partners and principals take a long look at the cash on offer and wonder to themselves if the tempting offer is right for them and the generations to follow, right for their staff , right for the community the agency serves and is right for the industry.
This isn’t an attack on corporate agency, I have a huge respect for Countrywide and LSL but see a greater benefit in market share not being so readily available to them.