In an update accompanying the acquisition news, the lettings agent said that trading in the second half of the financial year to date continues to be strong and it should comfortably achieve market expectations for the full year.
Jonathan Lovelle, Lovelles managing director, said: “Having seen how the Newton Fallowell network has flourished as part of the Belvoir Group, I knew that Belvoir would be the right home for the Lovelles network.
“Belvoir shares my vision of franchising as being the optimum business model for our industry and I know that its management team is committed to supporting the growth aspirations of all franchisees.“
Lovelles is being acquired for £2mln in cash, with the acquisition to be earnings accretive in 2020.
In the year to July 2019, the Grimsby-based firm was the largest agency in its region delivering 1,425 completed sales transactions and managing 1,600 properties.
In a note to clients, Guy Hewett, an analyst at 'house' broker finncap pointed out that Lovelles generated operating profit of £0.5mln in the year to March 2019 so the business is being acquired for only 4x (times) historic profits.
“It is a good geographic and cultural fit and there are a number of opportunities for Belvoir to quickly add value," the analyst said, raising his price target for Belvoir shares to 194p following the deal.
In early trade, Belvoir shares added 1% to 122.5p.