Begbies Traynor acquires Mantra Capital for £18 million

LONDON, UK: Begbies Traynor Group announced the acquisition of Axiom Consulting & Investments Limited and Ellayaan Limited and their subsidiary undertakings, which together trade as Mantra Capital, a London-based property finance brokerage.

Highlights of the acquisition

· Initial consideration of £4.5m comprised of £4.0m in cash from the group’s existing facilities and the issue of 352,361 new ordinary shares

· Potential earn out of up to an additional £13.5m (in a mix of cash and shares) subject to delivering material growth in profits over the four years post completion

· Mantra to join with MAF Finance Group (acquired May 2021) to form a national finance brokerage with complementary sector expertise

· In line with our strategy to increase the scale, quality and range of the group’s services both organically and through value-accretive acquisitions

· Expected to be immediately earnings enhancing

About Mantra Capital

Mantra Capital is an FCA-regulated finance and insurance brokerage based in London. The team has significant expertise across both commercial and residential real estate lending, providing property investment and development finance, finance for trading businesses and residential mortgages. In addition, they provide insurance brokerage services to their commercial clients.

The team of 23 employees, including two directors, joining the group have extensive banking experience and will enhance our financial advisory services. The business has a strong relationship with a large panel of banks and specialist funders and raised finance in excess of £500m for its clients over the last year.

In its financial year ended 31 December 2021, Mantra (on a combined basis) achieved revenue of £4.2m and normalised pre-tax profits of £1.2m (when reported on the same basis as the group). It had net assets of £2.6m (including cash of £1.3m) as at 31 December 2021.

Reasons for and benefits of the acquisition

The group’s strategy is to increase the scale and quality of its businesses both organically and through value-accretive acquisitions to both complement and diversify its range of service offerings.

In May 2021, we acquired the MAF Finance Group, a well-established finance brokerage, which has performed strongly in its first twelve months within the group. Finance broking complements the group’s other advisory and transactional services, particularly debt advisory and restructuring, as well as the valuation and sale of assets.

Mantra together with MAF Finance Group will form BTG Funding Solutions, a finance brokerage with expertise across a wide range of sectors, including real estate, construction, engineering and manufacturing, haulage, healthcare, agriculture, renewables and vehicles. The combined team of 70 employees with an enhanced national coverage, generated annual fee income of c.£8m and arranged finance in excess of £800m for clients over the last twelve months.

The combined BTG Funding Solutions team will aim to continue its strong record of growth through the recruitment of experienced employees. It will market its services directly to the corporate community and also through the group’s existing, extensive referral network of accountants and other professionals, in addition to supporting the group’s client assignments.

The acquisition is expected to be immediately earnings enhancing and will be reported as a part of the business recovery and financial advisory division.

Principal terms of the acquisition

The acquisition is for a maximum potential consideration of £18.0m on a cash free and debt free basis with an agreed level of working capital, a statement said.

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