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Bowmark Capital Buys Leaders Ltd

Bowmark Capital has sponsored a £48 million management buyout and expansion funding for Leaders Ltd., a UK residential real estate listing and property management agency. The seller was RO Group.

PRESS RELEASE

Bowmark Capital, the mid-market private equity firm, is backing the £48 million management buy-out and expansion financing of Leaders Limited, the UK’s largest specialist residential lettings and property management agency, from RO Group, a property investment and development business.

The buyout team is led by Leaders’ managing director, Paul Weller, a highly respected and experienced manager, who has been with the company for 17 years.

The UK lettings market is worth around £2.5 billion a year, and is growing strongly due to the increasing demand for rental properties, driven by the fundamental shortage and decreasing affordability of housing, as well as socio-demographic factors – such as the growing percentage of younger adults who see renting as a preferred lifestyle choice.

Leaders has grown every year since it was founded in 1983, through a combination of strong acquisitive and organic growth, and now comprises 42 branches across the south of England, managing more than 15,000 properties for around 13,000 landlords. It has the largest active tenancy base in most of the regions it serves, and the brand has become synonymous with the highest standards in residential property letting and management.

Since 2005, Leaders has bought and integrated 31 businesses, branches or portfolios, and has developed a leading edge IT and operational infrastructure to enable it to assimilate and capitalise on acquisition opportunities. Over the past five years revenues have grown at 28 per cent per annum, to their current level of approximately £25 million.

Bowmark is investing £21.2 million of equity for a significant majority interest in the company. Lloyds TSB Corporate Markets acquisition finance and RBS Financial Sponsors are co-leading a £14 million senior debt facility. An additional £12 million of further equity and debt funding is being made available for future acquisitions. Bowmark’s knowledge of the sector and its experience of buy-and-build investments were key to the success of the transaction.

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.”

Paul Weller added: “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.”

For further information, please contact:

Bowmark Capital: Charles Ind on

020 7189 9000

Caroline Cecil Associates: Caroline Cecil on

020 7610 4110

Notes to editors:

Photographs are available from Nicky Swain on 020 7610 4110/ nswain@carolinececil.co.uk

Bowmark Capital is a leading private equity firm specialising in smaller UK companies. Founded in 1997, Bowmark manages and advises funds totalling approximately £700 million on behalf of a blue chip investor base including public pension funds, insurance companies and banks from the UK, US and Continental Europe.

The Bowmark team has extensive experience of investing in growth companies run by experienced management teams, and has supported over 50 different businesses across a range of industries including business services, leisure, healthcare, media and IT services. Investments include: Healthcare Homes, a private pay residential elderly care provider; DATIX, a provider of patient safety and risk management software to the healthcare sector; and Las Iguanas, the UK’s leading chain of Latin American restaurants. Exits include Education and Adventure Travel, the leading specialist educational travel services group; Medscreen, Europe’s leading dedicated provider of drug and alcohol testing services; The Regard Partnership, a provider of care and residential services to people with a learning disability; and RDF Media, a leading independent TV production company.

Bowmark Capital LLP is authorised and regulated by the Financial Services Authority. www.bowmark.com

Advisers to the transaction

Bowmark Capital:

Financial due diligence: Ernst & Young, Richard Hall

Commercial due diligence: Deloitte, Justin Darlow

Legal: SJ Berwin, Jonathan Pittal

Leaders management:

Legal: Olswang, Stephen Rosen

Debt finance:

Finance providers: Lloyds TSB Corporate Markets acquisition finance, Adrian Peckham; RBS Financial Sponsors, Andrew Clayton

Legal: Osborne Clarke, Hugh Jones

RO Group

Financial: BDO Stoy Hayward, Peter Hemington

Legal: Taylor Wessing, David Roberts