"Most acquisitions are no-brainers – but you have to have the right team in place…’
It’s fair to say that Martin & Co Ashford’s Kevin Hall is becoming something of an expert when it comes to independent agency acquisitions.
Although, as he freely admits, securing the kinds of deals capable of growing his business also requires a bit of luck.
“It was back in November and I was due on a flight the following day, but Storm Ciarán was forecast along with 70mph winds,” says Kevin, reflecting on his most recent acquisition of Andrew & Co in Ashford.
“I’m a bad flyer so I rescheduled the flight for the following day.
“It must have been fate because at the exact time the original flight would have taken off, I got a phone call from the Property Franchise Group to tell me that Andrew & Co were selling their lettings business and they’d already had an offer from another agent.
“I got straight on the phone and in the time it would have taken me to fly where I was going, we had the deal tied up.
“Had I not been part of my franchise I would never have known of the sale and I would have missed the opportunity.”
Since taking over the Ashford branch in 2010, Kevin has completed three substantial acquisitions that, along with organic growth, has secured his office’s place as Ashford’s largest letting agent.
“I’ve learned from each acquisition we’ve done,” reflects Kevin.
“With any acquisition, the numbers have to stack up, of course, but most importantly, you need to have a good team around you capable of absorbing a portfolio seamlessly. There are often messy elements to sort out early on and keeping your new clients happy from day one is obviously massively important.”
“Its too early to say what the outcome of the latest acquisition will be however we have achieved a positive retention from our previous purchases so I am hopeful that we will not lose any clients. By positive retention I mean that we have covered any losses of properties by receiving new instructions from the landlords we have acquired that more than makes up for the small number that have left.”
“That confidence is really important for future acquisitions, as I know whatever is thrown at the guys in the office, they’ll be able to deal with it.”
For Kevin directly, he highlights being able to see off intense competition for independent agency purchases from other larger agencies – something he says is made much easier when you have an enviable reputation in your territory.
“Property Management is a numbers game, the more properties you have the less the it costs to run each one. We see that with corporate agencies however where they go wrong is that they then set up remote call centres. Landlords don’t want that, how can a property manager potentially hundreds of miles away understand the geography, the type of housing, the history of the property and the contractor that they propose to use to fix things. Having an efficient operation that covers all bases in one office located in the heart of the area covered is optimal”
“Acquisitions are not cheap however they provide instant income that can be used to easily cover the costs of purchase (and financing costs – should borrowing be required). Typically debt will be repaid within 2 to 3 years leaving the business much more profitable and a much more valuable business. A real no brainer.”