The Agency Group (ASX: AU1) is going ahead with its acquisition of Top Level Real Estate, after securing $13.4 million in new equity.
The Agency emerged from a trading halt this morning to announce that it will acquire the fast-growing Sydney firm upon raising $8.4 million from a share placement and $5 million from converting Top Level's debt into new shares.
While shareholders are yet to give the official nod, the share placement is strongly supported by existing shareholders including non-executive director John Kolenda whose stake in The Agency is expected to increase to 19.9 per cent on approval.
Managing director of The Agency Paul Niardone (pictured) says the acquisition of Top Level is a "game-changer" for the company which expects its market capitalisation to hit approximately $30 million once the transaction is finalised.
"The acquisition of Top Level will result in the addition of a highly experienced east coast real estate sales and project marketing team, significant property management portfolio and extensive sales pipeline," says Niardone.
"Top Level, which has been trading as 'The Agency' on the east coast of Australia since launching in March last year, has established, with our support, a significant business in a short period of time, surpassing our recruitment and sales targets."
Top Level was co-founded by its CEO Matt Lahood, former executive at McGrath, alongside Ben Collier, Steven Chen, Shad Hassan and John Kolenda.
Lahood will join The Agency's board as an executive director and says he is looking forward to building the company's momentum.
"The past 15 months has been a period of exceptional growth for both businesses, and we look forward to continuing on this upward trajectory with The Agency to become Australia's leading disruptive, high-growth real estate agency," says Lahood.
Over the past 15 months, Top Level has booked 693 residential sales with a combined value of $1.4 billion and has built a property management portfolio comprising more than 3,300 properties.
On completion of the transaction, The Agency will be comprised of around 300 sales reps across Perth, Sydney, Melbourne and the Gold Coast.
The Agency says it will also boast around 4,000 properties under management and a total mortgage book of $1.1 billion.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Get our daily business news
Sign up to our free email news updates.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support