BTG Consulting (AIM:BTG) has completed the acquisition of Hornbeam CPAM for a maximum potential consideration of £4m, folding the property and asset management business into its BTG Eddisons real estate advisory arm.
The Milton Keynes-based firm employs 13 staff, all of whom have joined the group, and serves institutional investors and fund managers with portfolios weighted towards industrial property, including multi-let industrial estates.
Hornbeam generated revenue of £1.9m and normalised pre-tax profit of £0.6m in the year to 31 January, with trading projected to hold at similar levels this year; it also carried consolidated net assets of £1.3m, including £1.1m net cash.
The initial £2m consideration comprises £1.65m cash and £0.35m in new shares, with a further £2m earn-out split evenly between two-year financial performance targets and profit-enhancing conditions.
BTG Consulting will fund the cash element from existing resources, and expects the deal to be immediately earnings-enhancing.
Most of Hornbeam's revenue comes from contracted property management work, covering rent and service charge collection and compliance, which the group said strengthens the resilience of its earnings through recurring income.
"Hornbeam has built a strong reputation among institutional investors and fund managers through the quality of its advice and long-standing client relationships," said Anthony Spencer, managing director of BTG Eddisons.
Executive chairman Ric Traynor called the deal "further progress in the delivery of our strategy to increase the scale and quality of our businesses."
News Intelligence what this means for the company
BTG Consulting has acquired Hornbeam CPAM, a 13-person property and asset manager generating £1.9m revenue and £0.6m normalised pre-tax profit, for an initial £2m (£1.65m cash, £0.35m shares) plus up to £2m in earn-outs. The deal adds institutional clients and recurring contracted property management revenue to BTG Eddisons and is expected to be immediately earnings-enhancing, funded from existing resources.
Hornbeam's £1.9m revenue represents roughly 1% of BTG's £179.9m consensus group revenue, making this a bolt-on rather than transformational. The acquisition fits BTG's stated strategy of increasing scale and quality, and the contracted recurring revenue base (rent and service charge collection) should improve earnings stability, but the deal's modest scale and immediate accretion offer incremental rather than material uplift to group earnings.
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