This article is from the Australian Property Journal archive
THE property valuation industry continues to consolidate with LandMark White buying rival MVS National, to be funded by a minimum-$16 million capital raising.
MVS was established in 1996 and now has more than 85 valuers across the country.
LandMark White will fund the acquisition by a total capital raising of $20.5 million.
Landmark White’s CEO Chris Coonan said it created the opportunity for the expansion of valuation services across private, corporate and government sectors within the market.
“Combining the businesses will allow us to build on the success and strength of both organisations, enhancing outcomes for all of our stakeholders,”
MVS CEO Tony Onsley said its people and customers could expect to realise the benefits of greater scale and national capability.
“Importantly, MVS’s current owners will become shareholders in LMW as part of the merger transaction, and form part of the leadership and management going forward,” Onsley said.
The $23.3 million agreement will comprise a $16 million cash consideration and $7.3 million scrip consideration, based on a maximum price of 4.5x the calendar 2017 EBITDA.
For the 2016 calendar year MVS returned revenue of $28.863 million, and $22.862 million for the 2016 financial year. NPBT for calendar 2016 was $6.542 million and NPAT $2.405 million, whilst for the financial year it was at $3.573 million and $2.405 million respectively.
Whilst boosting LandMark White’s residential and commercial operations, the acquisition will bring the group a considerable government and statutory division across the local, state and government sectors.
MVS entities will now operate under LandMark White’s branding.
It is anticipated the transaction will be “significantly” EPS accretive, at a 50% increase over the full financial year. Projected totals have Landmark White’s total consolidated assets increasing by 112% to $23.709 million, and total equity assets up 341% to $36.703 million. Assuming a payment of $8.7 million earn-out in 2020 equity interests will increase by 448% to $45.621 million, whilst an $11 million earn-out will take equity interests up by 485% to $48.696 million.
The remainder of the consideration is payable in late 2020 by way of issue of fully paid ordinary shares to the MVS vendors, and is subject to the performance of the acquired business over the 2018, 2019 and 2020 financial years. The earn-out payment is capped at $11.7 million, with theinitial consideration and earn-out consideration to be the lesser of the agreement figure or $35 million.
This is the second major consolidation within the valuation industry this year after JLL acquired two firms, Australian Valuation Solutions and Maloney Field Services.
It was JLL’s third acquisition in 15 months after it bought Propell National Valuers.
Australian Property Journal
