Foxtons Group PLC on Tuesday said it has made two acquisitions to expand its business outside of London, scooping up Haslams Estate Agents Ltd and Imagine Property Group Ltd.
The London-based estate agent acquired the businesses for a total of £12.6 million initially, plus up to £3.4 million more dependent on performance targets. This is comprised a £7.6 million initial consideration for Haslams and £5.0 million for Imagine.
Both acquisitions are ‘the largest lettings and sales agents in their core markets, and increase the group’s branch footprint to 64 branches’, Foxtons said. It expects the acquisitions to deliver approximately 2,900 further tenancies, which increases the size of Foxton’s tenancy portfolio by around 10% to over 31,000.
Haslams is focused on Reading and reported £800,000 in operating profit on £6.5 million in revenue for calendar 2023. Imagine is focused on Watford. It recorded operating profit of £500,000 on revenue of £3.3 million for its financial year that ended March 31.
Both Reading and Watford are markets forecast to deliver ‘leading levels of economic growth’ compared to the rest of the UK, Foxtons said, citing a UK regional economic forecast by accountants Ernst & Young.
Chief Executive Officer Guy Gittins said: ‘Our latest acquisitions add to our strong track record of identifying, acquiring and integrating high quality lettings businesses to deliver attractive returns and are a key part of our strategy to deliver £25 million to £30 million adjusted operating profit in the medium term.
‘We are delighted to have completed the acquisitions of Haslams and Imagine as we continue to pursue acquisitive lettings growth, to supplement our organic growth strategies. We have been impressed with the quality of both businesses which hold established leadership positions in their local markets and have built long-standing client relationships over many years, making them a great fit with Foxtons.
‘Reading and Watford are new markets for Foxtons and reflects our confidence that the Foxtons operating platform, and in particular our technology, data and reach can unlock new growth opportunities in these new markets.’
The acquisition will be funded by Foxton’s existing £30 million revolving credit facility, which it has the option to extend to £40 million.
Shares in Foxtons were down 0.3% at 58.80 pence each in London on Tuesday morning.
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