Property group LSL, the residential sales, lettings, surveying, conveyancing and mortgage advice firm, will pay £9.1m in cash, paying one half on completion and the other in 2017.
The agreement also includes put and call option provisions from the date the GFL 2018 audited accounts are filed at Companies House, which if exercised would increase LSL’s investment in GFL to up to 100%.
The additional consideration payable for the remaining shares would be calculated on an earnings multiple of between five and six times EBITA plus excess cash in the business and is capped at a maximum of £25m.
Paul Maston (pictured) will continue as CEO of GFL who founded the business in 1988.
GFL, which won top AR for growth and quality in mortgage business at the Legal & General Awards in 2014, reported profit before tax of £0.7m for the year ended 31 May 2015, at which date it had gross assets of £1.8m.
Ian Crabb, LSL Group CEO, said: “This investment supports LSL’s strategy to grow long term profitability in the provision of residential property services in the UK, by identifying value enhancing opportunities. Further, the investment strengthens LSL’s relationships with its key house builder clients.”