Bowmark Capital backs £48m MBO of UK property lettings agency

Bowmark, a mid-market private equity firm, is investing £21.2m (€23.6m) of equity for a significant majority interest in the company, with Lloyds TSB Corporate Markets and RBS Financial Sponsors co-leading a £14m (€15.5m) senior debt facility. An additional £12m (€13.3m) of further equity and debt funding is being made available for future acquisitions.  

Founded in 1983, Leaders Limited currently comprises 42 branches across the south of England, managing more than 15,000 residential properties for around 13,000 landlords, representing the largest tenant base in the region.

Since 2005, the company has bought and integrated 31 businesses, branches or portfolios, with revenues growing at 28 per cent per year over the last five years, to their current level of approximately £25m (€27.8m).

The UK lettings market is worth around £2.5bn (€2.78bn) a year, and is growing strongly due to the increasing demand for rental properties, driven by the fundamental shortage and decreasing affordability of housing, according to Bowmark.

Bowmark partner Mark Salter said, “Leaders is a market-leading business with a strong competitive advantage.  The opportunity to continue the company’s buy-and-build strategy and drive further value creation is compelling, given the fragmented nature of the lettings market.  

“There are an estimated 8,500 lettings branches across the UK, the majority of which are small, independent agencies, and the Leaders management team has a strong track record of transacting and assimilating acquisitions,” he added.

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