Zoppi & Co Advises on Purchase of Lettings Agency

Client: Established lettings agent looking to expand their business

Challenge: The client wanted to acquire another lettings agency to grow their portfolio and market presence. However, they needed protection against the risk of landlords leaving after the purchase, which could significantly impact the value of the acquisition.

Solution: The deal was structured as an asset purchase with built-in clawback provisions. This meant that if landlords left the business within a specified period after completion, the seller would repay a portion of the purchase price. The transaction was financed through a combination of cash and seller financing.

Outcome: The acquisition completed successfully, allowing the client to expand their lettings business while having appropriate financial protection against client departures. The clawback mechanism provided security for the buyer's investment.

Comment from Malcolm Zoppi, Partner: "Asset purchases in the lettings sector require careful consideration of client retention risks. I'm pleased we could structure a deal that gave our client the expansion they wanted while building in practical protections that made commercial sense for both parties."