GVA TO STRENGTHEN BALANCE SHEET TO DRIVE GROWTH
Thursday, 17 May 2012
GVA, the UK's largest independent commercial property advisor, today announced a capital restructuring of its balance sheet that will prepare the business for the next stage of its ongoing strategic growth programme.
The restructuring, which involves a conversion of all outstanding loan notes that were set at the date of incorporation in 2007 into non yielding preference shares, will result in a vastly improved net debt position of circa £15m providing greater flexibility for the business and drive new growth plans. Heads of terms of the deal will shortly be voted through by GVA directors that will see LDC (Lloyds Development Capital) swap loan notes for 7.5% increase in shareholding over the next three years.
As part of the same process, shareholding amongst Directors and Departmental Heads will be further diversified, allowing wider ownership of equity in the business.
This release of capital creates a significant war chest for GVA to invest in areas it believes will lead to further growth for the company.
GVA has identified three distinct areas in which it will be investing heavily in to ensure its continued growth over the coming 12 months and beyond - that being new business acquisitions; strengthening its international platform; and boosting existing benefits to employees.
In the past 18 months and after successfully negotiated four separate niche business acquisitions, GVA's primary source for potential growth remains its ongoing business acquisition programme. GVA will therefore look to continue in its bid to secure further businesses, and in doing so capture significant market share in niche sectors.
GVA will undergo an expansion of its global arm, GVA Worldwide. The purpose of looking to its overseas operations will be to gain a greater share of the global investor market and to invest in an expansion programme of recruitment of new GVA firms in overseas growth markets.
The deal will allow GVA to invest in existing teams and encourage organic growth. As well as outlining a greater focus on ensuring longer term employee retention, GVA will re-apportion shares, currently owned and controlled by its executive and non-executive directors, to the wider business. By encouraging greater company-wide ownership and ensuring a wider spread of employee benefits, GVA aims to share the success and growth of the business with those that contribute the most.
Paul Manning, senior director at GVA's Leeds office, comments: "This is an exciting development for GVA which shows the strength of confidence we have from LDC and its desire to further invest in our business. We have ambitious growth plans, and this release of equity will invigorate our business just at a time when many are finding the market tough going. We have a fantastic opportunity to invest in our teams and people as well as explore new business opportunities through mergers and acquisitions. We must invest in our international platform to take advantage of the new opportunities that we see happening when the market starts to recover."