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(Sharecast News) - FRP Advisory announced a broadening of its real estate capabilities on Friday, with the acquisition of London-based Arc & Co Structured Finance for an upfront consideration of 6m, alongside net assets of around 0.65m and a three-year performance-linked earn-out.
The AIM-traded specialist business advisory firm said Arc & Co, an FCA-regulated provider of financial advisory services to the real estate sector, would form the foundation of a new sixth service line, FRP Real Estate Advisory.
It said Arc's founders, Andrew Robinson and Edward Horn-Smith, would join FRP as partners together with all 18 members of their team.
It said the acquisition - its 15th since listing in 2020 and its second this year - supported its strategy of expanding its service offering, growing market share and extending its national coverage.
The transaction, split between 4.85m in cash and 1.8m in new shares, was expected to be earnings-accretive in its first full year.
Arc & Co generated unaudited revenue of 5.4m and EBITDA of 1.6m in the year ended 30 June, with FRP expecting roughly 6m of revenue and 1.1m of adjusted EBITDA from the acquired business in the 2027 financial year.
Chief executive Geoff Rowley said the acquisition would allow FRP to strengthen its position across the property sector.
"Arc & Co's expertise broadens our existing Real Estate capabilities," he said.
"In launching FRP Real Estate Advisory as a service pillar we bring these specialists together in order to better serve clients with their Real Estate requirements."
Rowley said the acquisition would allow FRP to "deepen relationships" across the real estate sector, with increased opportunities for revenue generation across the group.
"Andrew, Ed and the team have built a great reputation and we're pleased to welcome them to FRP. They share our values and will make a strong contribution as we continue to grow."
Arc & Co co-founders Robinson and Horn-Smith said the deal provided a platform for the next phase of the business's development.
"We are delighted to be joining FRP and are excited at the opportunities that being part of FRP presents for our team and our clients," they said.
"We are all immensely proud of what we have achieved as a team at Arc & Co and being part of FRP will be a strong platform to enable us to offer a broader range of services to our clients and strengthen our reach across the UK through its nationwide office network.
"We are confident that by building upon our shared values of quality and professionalism with FRP we will accelerate our growth."
FRP said 1,285,714 new shares would be issued as part of the consideration, with admission to AIM expected on 19 November.
At 1301 GMT, shares in FRP Advisory Group were up 0.71% at 141p.
Reporting by Josh White for Sharecast.com.