Sherry FitzGerald, the publicly-quoted estate agent, has announced the acquisition of 80 per cent of the Ross McParland Agency, which specialises in the sale of new homes, for £4.5 million (€5.7 million).
The beneficiaries of the deal will be the three partners who held a stake in Ross McParland, who are all executives of the firm.
Founder Mr Ross McParland was the major shareholder and will therefore receive over half of the sale price. Mr Brendan Byrne also had a substantial holding, while Mr Eamonn Foley is believed to have had a smaller stake.
The purchase price for the 80 per cent stake valued Ross McParland at £5.6 million. While the consideration was paid in cash, the agency's directors subscribed for £1.1 million worth of Sherry FitzGerald shares, meaning that they will hold some 25 per cent of the proceeds in stock.
Sherry FitzGerald has an option to buy the remaining 20 per cent of Ross McParland based on average formulae of the after-tax profit average over a five-year period. The agency had pre-tax profits of £804,000 in the year to last April.
Sherry FitzGerald wants to increase its stake in the new homes market. Following the acquisition, its share in this area will rise to 23 per cent.
Mr Mark FitzGerald, chairman and chief executive of Sherry FitzGerald, said Ross McParland was a significant player in the new homes market with an established niche brand, a high quality team of outstanding professionals and a large stock of new homes' schemes both on the market and coming to the market over the next number of years.
"This, coupled with our existing new homes business, will place us in a leadership position in the Dublin market and a very significant national player in this important sector."
Mr McParland, who founded the agency in 1985, said the take-over would give his business and clients access to a large brand network, and a quality property research resource, which will give them a competitive edge in the market.
Mr McParland will be managing director of the new subsidiary Ross McParland Ltd and will join the Sherry FitzGerald board as an executive director.
The Sherry Fitzgerald Group also announced pre-tax profits for the first six months of this year, up 54 per cent at €1,330,836 while group turnover was up 55 per cent to €7,736,316. Earnings per share were 6.9 cents, an increase of 1.7 cents on the same period last year. According to Mr Fitzgerald: "The figures show substantial real growth with profits over 2 1/2 times the rate of house price inflation at 21-22 per cent and a maintenance of margins at around 17 per cent despite extensive investment in IT."
Sherry Fitzgerald's residential turnover was up 66 per cent to €5,520,571 while its commercial property arm, DTZ Sherry Fitzgerald, achieved fee growth of 33 per cent.
Mr Fitzgerald said sales of second-hand houses and new houses had increased by 31 per cent and 23 per cent respectively in the first half of this year and the company had received a positive response to expansion across the State. He criticised the recent housing Bill, which suggests builders should give 20 per cent of their new stock to social housing, describing it as a "sledgehammer approach" to the housing issue.
He suggested that the real solution to the housing problem was increasing the supply of housing which would take pressure off social housing programs, and reduce waiting lists.
