Knight Frank Ireland is to be taken over as part of a management buyout. Staff at the commercial and residential property agency were informed yesterday morning that an offer was made last Friday by head of residential sales Robert Ganly (above), along with his wife Sandra Ganly and lawyer Karen Erwin, to buy all parts of the existing business.
The move represents the first major break-up of a leading estate agency since the crisis began. The Irish Times has learned that agreement has been reached in principal with Knight Frank Ireland's main shareholders, and due diligence is under way.
Under the deal, from May 1st, Ganly Walters will re-emerge as the trading name for the company, which employs 41 people. It's understood the new entity plans to operate as a partnership, similar to the John Lewis group in the UK.
The value of the cash deal has not been disclosed, but it is believed to amount to several hundred thousand euro.
The main beneficiaries will be four shareholders: Knight Frank Ireland managing director Paul McDowell, Keiron Diamond, Paul Hanna and Callum Bain.
According to Ganly, Knight Frank Ireland’s employees will transfer to the new entity. The partnership model gives employees the option to buy into the business. “The franchise model is restrictive in that there is no scope for investment in the local business. With Ganly Walters, I can make a 50-year plan to bring the business forward. I would hope people will come knocking on our door with cheques to join us.”
Ganly Walters may now forge a commercial partnership with Strutt and Parker a major UK commercial property agency.
The move has raised industry speculation that Paul McDowell may relaunch Knight Frank here under a new licensing agreement. Knight Frank Global has already indicated its continued committed to the Irish market.
Equally HT Meagher O’Reilly has made major inroads in the commercial property space in recent times, and it may also be seen as a potential partner for any new agreement.
In 2007 Knight Frank Ireland bought Ganly Walters - which was founded in 1847 - in a sum reported at the time to be somewhere under €10 million. However the timing couldn’t have been worse as the property market began to collapse. Two years later the local management took the business back, and Knight Frank Ireland has operated since then as a licensee of the global network.
The business is broadly split between two thirds commercial and one third residential property, recording a turnover of between €1 and €2 million last year. Recently Knight Frank Ireland’s commercial arm has pursued an aggressive competitive pricing model, allowing it retain a position in that space over the past year. Ganly Walters will continue to drive the bulk of earnings through commercial sales.
Knight Frank Ireland has lost several high profile figures in recent times, including Mark Smith, a senior commercial negotiator who moved to CBRE about a year ago.
Karen Erwin is a former Irish Times executive director and was a partner in solicitors firm A&L Goodbody. Ms Erwin's father, Major Tom McDowell was chief executive and chairman of The Irish Times for almost 40 years.