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Bowmark Capital backs GBP48m MBO of lettings agency

Private equity firm Bowmark Capital is backing the GBP48m management buy-out of Leaders, a UK residential lettings and property management agency, from property investment and development business RO Group. 

The buyout team is led by Leaders’ managing director Paul Weller (pictured right), who has been with the company for 17 years.
 
The UK lettings market is worth around GBP2.5bn a year, and is growing strongly due to the increasing demand for rental properties.
 
Leaders was founded in 1983 and now comprises 42 branches across the south of England, managing more than 15,000 properties for around 13,000 landlords. 
 
Over the past five years revenues have grown at 28 per cent per annum to their current level of approximately GBP25m.
 
Bowmark is investing GBP21.2m of equity for a significant majority interest in the company. Lloyds TSB Corporate Markets acquisition finance and RBS Financial Sponsors are co-leading a GBP14m senior debt facility. An additional GBP12m of further equity and debt funding is being made available for future acquisitions. 
 
Bowmark partner Mark Salter (pictured left) says: “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.”
 
Weller adds: “We are very excited about this next phase in our development and look forward to working with Bowmark – drawing on their considerable experience of working with businesses to achieve strong acquisitive growth.”

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