A neate fit
Two regional agencies, Carter Jonas and Dreweatt Neate, completed their merger on 1 May
Operation Sunshine, the codename for the merger between Carter Jonas and Dreweatt Neate, was invented 18 months ago.
Around this time last year, Property Week broke the news that the two firms were going to combine.
Now it has finally happened. On 1 May, Carter Jonas and Dreweatt Neate merged to become the new Carter Jonas.
But the story goes back three years, when the two firms’ finance directors met at a seminar.
‘They got chatting and thought that our two firms were similar to a large extent, but very different in the sense that they were located in different towns and cities,’ says Mark Granger, chief executive of Carter Jonas before and after the merger.
The two companies had similar divisions and histories – they were both built out of rural estate management – but their offices were in different locations.
‘They were very much a regional business,’ says Granger, ‘whereas ours was more of a national business.’
Whereas Dreweatt Neate’s strongholds were in the south and west of England, Carter Jonas’s offices ran along the east of England, up to the north. ‘Geographically, it’s a great fit,’ says Granger.
‘Both Dreweatt Neate and Carter Jonas were a certain size, and were looking to acquire and get larger,’ says David Smith, formerly senior partner of Dreweatt Neate and now senior partner of Carter Jonas.
‘The firms were very similar, but we were not similar in terms of geographical location. By putting the two firms together, the jigsaw puzzle was a very good fit.’
‘It’s a good merger of two long-established firms,’ says Mark McAndrew, head of farms and estates at Strutt & Parker.
Andrew Hay, a partner at Knight Frank who heads the country division, agrees: ‘They are two strong regional firms that covered different parts of the country.’
The two finance directors mentioned their encounter at the seminar when they returned to their own firms, and then the bosses got together. They ‘had a chat, and it all stemmed from there’, says Granger. ‘One of the first things you want to be sure of with a merger, is that you get on with the people who you are trying to do business with.’
So, around 18 months ago, the partners of both firms gathered together at a hotel in the Midlands.
‘We got together around a table, and then we had some supper together,’ says Granger.
‘If we had all hated the sight of each other, we probably wouldn’t have got any further.’
The Dreweatt Neate limited liability partnership has now been dissolved, and its partners have joined the Carter Jonas limited liability partnership. Their employees have moved across and are now Carter Jonas staff members.
Before the merger, Carter Jonas was the larger firm and had a wider geographical spread, and that is the main reason the name has stayed.
‘We decided it was better to go with one name rather than put the two names together and have a bit of a muddle, or invent a completely new name,’ explains Granger.
‘We thought that our name covered a much wider geographic area already, stretching from Marlborough in the south, with five Offices in London, and covering the whole way up the country up to Cumbria.’
In its regions in southern England, however, the Dreweatt Neate name is, of course, better known. Indeed, on the way to meet senior partner David Smith in the Dreweatt Neate heartland of Newbury in Berkshire, two days before the merger, the taxi driver is familiar with the company. ‘It’s the posh surveying firm,’ he says.
‘I am personally sad to see the Dreweatt Neate name disappear, because it is so old,’ says Strutt & Parker’s McAndrew. The firm dates back to 1759.
Smith admits that, among clients, ‘there is sadness that a name that they’ve known for so long will no longer be the trading name. But they welcome the access to a wider range of expertise and a larger network of offices, and they still have the same people working for them.
‘The name disappears from trading on 31 April, but on 1 May, the same people are working in the same offices doing the same business, but with the benefits of being part of the national firm.’ Around eight weeks ago, the existing Carter Jonas offices were rebranded, and the logo has changed from red to a mixture of purple, brown and Green. This, explains Granger, was designed to give the post-merger Carter Jonas a new identity.
In terms of the management of the new business, ‘we tended to split roles between the two firms,’ he explains. ‘There have been obvious people to fill the various roles.’
‘We all agreed it was important to have a balance in the management,’ says Smith. ‘Mark [Granger] is chairing the management board, which is responsible for running the firm from a financial and business point of view, and I am chairing the partnership board, which oversees looking after the interests of the partnership. Each board includes partners from each firm.’
The merger has taken longer than anticipated. ‘Both of us have been trying to manage our own business in the current market, which has rather got in the way of pushing ahead with the merger discussions,’ says Granger.
‘The idea came about when market was flourishing in 2007,’ says Smith. ‘It just seemed like too good an opportunity to miss.
It would allow both firms to achieve what they wanted to achieve.
‘We think it’s a good time to bring this new national business into the marketplace,’ says Granger. ‘There are lots of opportunities to drive this new merged business forward, and to take advantage of improved market conditions when they come about in all the sectors in which we operate. We have got this pretty broad-based firm that has stood us in good stead in this troubled time for the property market.’
Knight Frank’s Hay believes the merger will help the new Carter Jonas through the recession. ‘Mid-sized firms like Carter Jonas and Dreweatt Neate tend to lose market share during recessions, meaning they experience an increased pressure on cashflow,’ he says, ‘This will help ease that pressure.’
However, he does not believe that it will lead to increased market share in the long term because the firm does not have a strong enough national presence, nor does it operate internationally.
Nevertheless, the new Carter Jonas opened an office in Bath in March, and, for Smith, this expansion sums up what the firm can now achieve. ‘We have strong roots and deep local knowledge, but that is now spread across the country,’ he says.
No fee-earners have lost their jobs from the merger, as there is no overlap in terms of office locations. However, some support departments, such as finance and IT, have doubled up and a consultation process is under way.
Granger says that before the merger was finalised, the two firms had already tendered for work together in the last six months, and have subsequently won some contracts.
Smith says it is onwards and upwards for the new firm, but that he is still holding on to the Dreweatt Neate name. He has taken a ‘sold’ board home to remind him of the good old days.
How the new Carter Jonas measures up
- Around 400 employees and 75 partners
- 31 offices
- Annual turnover of nearly £30m
- Mark Granger, formerly chief executive of Carter Jonas, will be chief executive of the new firm
- John Henniker-Major, formerly chairman of Carter Jonas, will be chairman of the new firm
- David Smith, formerly senior partner at Dreweatt Neate, will be senior partner of the new firm
- The firm’s divisions will be: residential, commercial, planning, architecture and building consultancy, minerals and waste management and rural
- The rural division will have a combined turnover of £9m turnover and will manage around 850,000 acres on behalf of clients
- Rural special report, p67