Knight Frank and New Zealand’s Bayleys Corporation have joined forces to acquire McGrath, the Australian real estate group founded by John McGrath, in a buyout worth $95.5 million. This move is poised to reshape the national property sales market.

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The consortium, offering a premium of 27.7% over McGrath’s Friday closing price, has secured approval from the McGrath board, which holds 48.1% of the company’s shares. John McGrath will retain his role as CEO under the new ownership structure and plans to roll over his 23.2% stake into the new entity.

Bayleys complete acquisition of McGrath Real Estate

The acquisition promises synergies between McGrath, Knight Frank’s global residential expertise, and Bayleys Realty Group’s expansive New Zealand operations. McGrath shareholders will have the option of cash or unlisted scrip, with the company set to delist from the ASX post-acquisition.

McGrath chair Peter Lewis praises the offer as a significant premium, providing shareholders with value certainty. The transaction, expected to finalize before June 30, 2024, includes a permitted dividend based on McGrath’s cash reserves.

James Patterson, CEO of Knight Frank Australia, anticipates the acquisition will bolster their position in the Australian real estate market, combining local expertise with global capabilities.

Bayleys, which entered the Australian market through this deal, sees the partnership as a gateway to enhance real estate services across Australasia.

Bayleys is ‘UP THE WAHS’

Overall, the acquisition marks a strategic expansion into Australia for Bayleys and a significant growth opportunity for McGrath under new ownership.