A DEAL has been struck to create Scotland’s second-largest factoring business with the acquisition by James Gibb Residential Factors of Edinburgh-based Life Property Management.

James Gibb declared the sector was “ripe for consolidation” after completing the deal, which it said has increased the number of properties it manages by nearly 70 per cent to more than 44,000.

And it declared it would seek further acquisitions, noting that it is targeting deals in the north of England.

The acquisition, James Gibb’s fourth to date, gives the combined firm a headcount of 88 across its offices in Edinburgh, Glasgow and Aberdeen.

Life Property Management had built up a portfolio of more than 18,000 properties under major shareholder David Reid. It had a workforce of 30 staff, all of whom have joined James Gibb.

Mr Reid has become group managing director of James Gibb further to the deal, reporting to chief executive Douglas Weir.

Mr Weir said: “The factoring sector in Scotland is ripe for consolidation. We have looked carefully at the market and the acquisition of lpm is a statement move designed to create genuine competition and differentiation across Scotland. It brings together two of the best factoring firms in the country, which can only benefit our owners.”

Mr Reid said: “The factoring sector in Scotland can improve dramatically. By coming together with James Gibb, we can deliver the quality standards, technological innovations and commitment to service that owners expect. Our business has been on a dramatic journey of growth and this latest step will ensure we are part of exciting change for the better right across Scotland.

“Owners should expect transparency, high quality service and value for money from their factors, and our promise to deliver that has helped us to grow as quickly as we have.”

The acquisition comes on the back of a period of strong growth at James Gibb. It is said to have expanded “ten-fold” in the last seven years, having managed just 4,000 properties at the time of its acquisition by Strathspey Capital in 2012.

Mr Weir added: “This is an exciting time for our industry where consolidation of existing factoring businesses will lead to improved resources and enhanced technological capabilities. We have seen the lettings sector consolidate dramatically and we expect to see factoring go through a similar process of change.”