Begbies Traynor acquires insolvency practice

1st Apr 2015 11:58

Begbies Traynor has acquired Broadbents Business Recovery Services, a Yorkshire-based insolvency practice, for an initial consideration price of £0.2m.The purchase will be payable for in cash with a further deferred payment of £0.35m subject to revenue targets being met over the next two years.Broadbents posted full-year revenues of £0.6m and profits before tax of £0.1m this month.Executive chairman Ric Traynor said: "The acquisition of Broadbents further enhances our position as the UK's leading independent insolvency practice."We remain well placed to take advantage of opportunities to develop and enhance the business, both organically and through selective acquisitions."Shore Capital analysts said: "This transaction is in line with Begbies' strategy to consolidate the UK mid-market corporate insolvency space at a time when smaller operators are looking to sell due to increasing regulatory pressure and challenging market conditions."It appears to be reasonably priced to us, albeit its small size means that we do not expect it to have a material impact on our estimates in the near-term. We believe that the company remains well positioned to benefit as and when market conditions improve."Shares were down 2.82% to 43p on Wednesday at 11:31.