Three QS firms to merge and float on Stock Exchange as Baqus

Three quantity surveyors have joined forces in order to float on the London Stock Exchange. The new group will be called Baqus. Shares will start trading in November.

The three privately-owned QS practices making the move are:

• Boxall Sayer – offices in Chichester, St Albans, London and Manchester.
• Denley King – offices in Poole, Winchester, Canterbury and London
• Fletcher McNeill – offices in Liverpool, Manchester, Lichfield and Oxford.

They have 110 employees in all. Their combined turnover runs to £7m and latest results show a combined pre-tax profit running to £1m.

They were brought together by Roger Knowles, founder of JR Knowles, the legal services and dispute resolution group, and Patrick Lineen, a former finance director at Knowles.

Clive Sayer, executive chairman at Boxall Sayer, will be chief executive of Baqus.

The plan is to raise turnover to £20m within three years through acquisitions. They will be funded by money raised at flotation and from future profits. Baqus says that it will not expand by taking on borrowings.

When Knowles and Lineen contacted QS groups a year ago to see who might be interested, 12 firms showed interest. Five of these got into serious talks and three stayed the full course.

“We were looking at medium-sized players, those in the £2m-£3m turnover band, and making a decent profit,” said Lineen. “Of the ones who didn’t quite make it, some said it was not the right time for them while others were not profitable enough for us.”

It is not yet known how many shares will be issued. The flotation share price will be set by brokers.

The three QS groups’ existing shareholders will hold 70%-80% of the total shares offered, leaving the public with a 20%-30% tranche.

Employees will be able to buy into their future through a SAYE scheme. They will have an additional incentive of share options. These will run to 10% of the total shares issued, an upper limit imposed by City regulations.

“We’re looking at the future,” said Sayer. “We’re showing our younger staff that we’re going somewhere. We’re looking to motivate our good staff by showing them that a stake in the business is available.

“We’ll be looking to make geographic acquisitions in the North East of England, Scotland, Wales and East Anglia.

“We also want to broaden our skills base. We three are strong in the building sector so we’d like to expand in civils, infrastructure, road and rail.”

When Baqus floats will rank 15th in the list of QS groups.