Estate agency software firm GMG Property Services has changed hands in a management buy-out heavily backed by a bank.
As of now, the group is no longer owned by the cash-strapped Guardian Media Group, which will fully exit the business, it was announced yesterday.
In an “important customer announcement”, a letter to customers says that GMG had sold to successful private equity firm LDC. and stresses that the change of ownership will make no difference to customers.
The company, which includes the Vebra and Core brands in its stable, will continue to be led by its current chief executive Mark Goddard and is to be rebranded The Property Software Group.
The buy-out is being backed by LDC (Lloyds Development Capital), part of Lloyds Bank, which says it is pumping £17.8m into the business.
LDS, a mid-market equity provider, will take a “significant” stake in the business, investing alongside the incumbent management team led by Goddard.
The announcement comes after months of speculation: in spring this year, the debt-strapped Guardian said it would be selling the business to raise funds, with an auction said to be due in May.
GMG has its software in some 6,700 estate agency and letting agency branches.
As well as Vebra and Core, GM owns CFP Software and the newly launched cloud-based Alto brand.
The business is believed to have been among those hit for six during the last property crash, but today employs over 170 people across the UK and has an annual turnover of more than £10m.
Yesterday, LDC said the deal provides the opportunity to accelerate growth, primarily through the ongoing roll-out of Alto, which it said is “already acknowledged as the leading cloud-based IT services product for estate agents”.
Part of the strategy will also be to acquire other software businesses, in order to increase market penetration.
LDC also announced yesterday that a new non-executive chairman, Alastair Hazell, has been appointed.
Goddard said: “LDC’s investment reflects their confidence in our future potential.
“We anticipate that LDC’s support will allow us to further strengthen our market-leading position, invest for future growth both organically and through acquisitions, as well as continuing the provision of high quality service for all our customers, existing and new.”
Andrew Miller, CEO of Guardian Media Group, said: “It is now right that LDC, Mark Goddard and the current Property Services Group management team take this consolidated entity into the future, and that GMG continues to focus on investing in the core part of our business, Guardian News and Media.”
The relinquishing by the Guardian of GMG Property Services means that no national newspaper group, apart from the Daily Mail, now has a commercial interest in the residential property sector.
The Mail continues to have a string of property-related businesses, and also owns the majority stake in Zoopla.