Countrywide is to sell a majority stake of its business to investor Alchemy Partners in a £90m deal that will see an overhaul of the leadership.
The estate agent has appointed former De Vere hotels chief executive Carl Leaver as chairman after a £90m recapitalisation from funds managed by existing shareholder Alchemy Partners. It has also secured a new £75m loan facility with existing lenders.
Alchemy will hold between 50.1% and 67.7% of the share capital. The investor is in discussions with a potential chief executive for Countrywide, following a strategic review of the business.
It will use the proceeds to reduce debt by £50m, support the company’s turnaround plan and boost the balance sheet resilience in market uncertainty.
Alchemy Partners has drawn up a turnaround plan for the agency, including appointing a new senior management team and cutting costs with greater use of IT systems. It said will seek to regain lost ground in the sales and lettings, grow its surveying and external conveyancing business, expanding mortgages and the geographic and service line within LSH.
Countrywide is pushing ahead with plans to sell LSH, which it said it expects to sell within 12 months of the initial classification date of 27 December. It is pursuing damages from would-be buyer John Bengt Moeller, after a £38m deal fell apart.
In a trading update for for the six months ended 30 June, the agency reported a pretax loss of £44.3m, down from a loss of £38.4m for the same period last year.
The loss was in part driven by £51.8m of exceptional costs, with £39m to goodwill associated with professional services and the residential development services, and the balance on intangible (brands, customer contracts and relationships) and tangible assets (computers).
Group income fell by 28% to £173.8m, with a decline reflecting branch closures during the lockdown. LSH income for the nine months to 30 September fell by 16.4% to £63.1m and adjusted EBITDA was around three-quarters of the previous year.
At the end of the period, Countrywide estimated LSH sale proceeds, after costs, of £14m, less than the net book value of the assets and liabilities.
Leaver said: “With the right capital structure and Alchemy as a supportive controlling shareholder, I am confident that there is a very bright future for Countrywide.”
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