Savills plc Acquires Smiths Gore
Savills plc, the international real estate advisory firm, is pleased to announce the proposed acquisition by Savills UK (Savills) of the business and assets of Smiths Gore, a long established partnership providing rural property services in the UK, for up to £40 million in cash (including up to £8.5 million in respect of net current assets to be transferred on completion).
Founded in 1847, and headquartered in Peterborough, Smiths Gore has 27 partners and 532 staff, across 31 UK offices managing and servicing institutional, private client and Public Sector estates. This complements Savills existing rural business which is mainly focused on management of estates for the private client and charitable sectors and the provision of transactional advice.
The business will be integrated into Savills existing national network and will ultimately trade under the Savills brand.
For the year to 31st March 2014 (unaudited), Smiths Gore's revenue was £30.8 million. Profit before tax and partners' drawings was £6.3 million; on a proforma basis, assuming that Savills remuneration structures were in effect, this equated to approximately £2.4 million profit before tax, (excluding any cost and revenue synergies). Gross assets amounted to £14.9 million.
The cash consideration will be financed out of Savills plc's existing cash and banking facilities. On completion, Savills will pay £12.5 million plus up to £8.5 million in respect of net current assets. Deferred consideration of up to £16 million is payable on the third anniversary of completion and up to £3 million on the fifth anniversary of completion, both payments are subject to the achievement of certain performance conditions.
Subject to customary conditions, the transaction is expected to close by the third quarter of 2015 and to enhance Savills underlying earnings per share from the first year.
Jeremy Helsby, Group Chief Executive, said:
"Founded in the mid 19th century, Smiths Gore has a similar heritage to Savills and has developed a recognised position as a top quality rural advisory business. This transaction will enhance the enlarged Savills business' ability to serve the UK's landowners with national coverage and a full portfolio of management, agency and asset management services."