Ausnet changes name to The Agency Group and announces Wild West expansion intentions

The listed real estate and financial services group, The Agency Group, formerly known as Ausnet, has agreed to buy another estate agency with some $3 million sought via a shareholder capital raising.

It announced the $950,000 extended tranche deal with another Perth-based company, ServTech Global, which is trading at 2 cents.

The Agency, trading at just under 2 cents, has the aim of having 600 sales representatives within three years.

It has indicated its intention to buy the Sell Lease Property agency which has 210 agents and an $8 million annual revenue, reflecting $38,000 per current agent.

It will pay up to $950,000 for the acquisition of three businesses from the Western Australia-based proptech disrupter ServTech which floated earlier this year with Perth investors Keith and Patricia Scudds the biggest shareholders.

Sell Lease Property has around half its agents in WA having recently expanded onto the east coast, where it has 45 agents in Queensland and 25 in Victoria. The company does not have suburban real estate offices.

The Agency says after the deal it will have 280 agents across Australia generating 120 sales every month worth $80 million.

Unlike other real estate franchise groups which take some of the agent's commission, Sell Lease Property (SLP) allowed its agents to keep all their commission in exchange for using ServTech's Angel Platform, an online system which handles all the back-office paperwork at a cost of $700 per transaction.

The ServTech company was founded by real estate entrepreneur Brett Quinn and was chaired by former Fortescue mining executive Nick Cernotta, who recently stepped down. Bert Mondello is the new chairman.

Last month ServTech announced a convertible loan facility with Ausnet after a detailed strategic review of its business including its operating costs and cash burn.

"The impact one of changing market conditions resulted in slower than expected revenue growth which resulted in an unacceptably high and unsustainable rate of cash burn," its ASX listed shareholders were told. Shareholders were told Ausnet had agreed to actively oversee an ongoing strategic review of the business plan and technology associated with Sell Lease Property, plus assist with growth strategies and national rollout, identify and implement strategic synergies with its associated companies, where appropriate as well as provide the Company with significant management and marketing expertise.