Savills plc, through its wholly owned subsidiary Savills (Overseas Holdings) Limited will be paying a consideration of €50 million for HOK consisting of €26.4 million of cash on completion with the balance of €23.6 million, being a combination of loan notes redeemable over a period or 36 months and distributions to senior personnel in HOK. This acquisition is being funded from Savills cash balances.
HOK is the largest firm of commercial property advisors in Ireland and is a market leader in the Irish retail market where it has a dominant position in the shopping center sector. It offers a full service property consultancy in all commercial property sectors with 250 staff based in offices in Dublin, Cork, and an associated office in Limerick.
The company is also a leader in the Irish residential market with particular strengths in the development and new homes sector which has witnessed substantial growth in recent years.
For the year ended 30 September 2005, HOK reported a turnover of €35.7 million and pre-tax profit of €7.8 million, before charging non-recurring remuneration in the year of €4.7 million. As at 30 September 2005 the company had gross assets of €22.1 million.
HOK has been operating in Ireland for over 50 years and has developed into one of Irelands most successful property advisors. The company has been at the forefront of sourcing investment product in Europe for Irish investors and won the Estates Gazette Irish Property Advisor of the Year in 2005. The acquisition is in accordance with Savills Group strategy of expanding its European operations. Ireland is one of the most dynamic markets in the European Union and has one of the highest growth rates in Gross Domestic Product. Over the last five years Irish Investors have invested over 11bn in the UK commercial property market. As well as affording our existing clients greater access and expertise in the region, this acquisition will provide Savills with access to an extensive client base in Ireland.
HOKs management and staff are committed to Savills and the firm will continue to trade as HOK for the near future. Paul McNeive and Aidan OHogan will continue as managing director and chairman respectively.
Aubrey Adams, Chief Executive of Savills, comments: "We are delighted to welcome HOKs management and staff into the Savills Group, which will further strengthen our European offering. This is an important strategic acquisition for Savills as the HOK business model fits perfectly within our Group, and will provide a platform from which we can service the growing number of Irish based developers and investors who are looking for further opportunities in the European property sector."
Paul McNeive (MD) & Aidan OHogan (Chairman) of HOK, add: "We are delighted to join forces with Savills, which we see as a tremendous opportunity for the firm, staff and our clients. We have built up our international business significantly in recent years, having acquired over one hundred and fifty properties for Irish investors to a value of over €5 billion in the last five years. This deal sees us becoming part of the Savills international group and is great news for our clients as it gives us direct access to the Savills Groups 125 offices with over 15,000 property professionals throughout the world. We are particularly attracted to Savills global strength. Together we plan to capitalise on the next wave of Irish investment and development oversees."
Jeremy Helsby, Chairman and Chief Executive of Savills Commercial, says: "The acquisition of HOK will give us a leading position in Ireland, and presents exciting opportunities for our teams to work together for the benefit of our mutual clients. I am delighted that HOKs culture is a natural fit with the Savills entrepreneurial culture.
The strength in the Irish economy indicates that the residential and commercial property markets, in particular the retail sector, are likely to remain buoyant. The combination of HOKs expertise and client base and Savil