The local estate agent who made a killing: Tony Snarey sold out for a sky-high price and bought back in for a song

TONY SNAREY is a happy man. You probably would be too if you had hit the jackpot twice in five years and ended up a multi-millionaire, writes Richard Thomson.

His story is typical of many estate agents who sold their companies to insurance groups or building societies in the late 1980s for absurdly large sums of money, only to buy them back a few years later for absurdly small sums of money. In Mr Snarey's case, he is not buying back his old firm but a different one. But the principle is identical.

In 1986 he was a 25 per cent partner and chairman at William H Brown, a chain of 65 offices in the Midlands. He was a successful businessman on a small, local scale. When the frenzy for buying agents began, he suddenly found he was very popular.

At the time, the housing market was motoring and he was not keen to sell. In fact, he wanted to expand but did not have the capital to do so. He chose to link up with Royal Insurance because it had the required money and wanted only a minority stake.

Royal was issued with new shares, giving it a 25 per cent stake in the agency, in return for injecting several million pounds of new capital. William H Brown went forth and multiplied. By 1988 it had expanded to 250 offices, paying a mixture of shares and cash to those it swallowed up. Mr Snarey's personal shareholding shrank to 5 per cent, but its financial value was much greater than his old 25 per cent had ever been.

By the end of 1988, Royal had spent so much on the agency that it decided to take full control. 'We still didn't really want to sell, but when you value your life's work at X and someone offers you Xx12 for it, what else can you do?' says Mr Snarey. William H Brown sold all its recently acquired branches and made a killing. Royal, meanwhile, paid more per office - about pounds 300,000 - than it had in 1986. It also seemed unperturbed at having, in effect, paid twice over for much of the company. After all, nearly four-fifths of William H Brown's branches had just been bought with the help of capital provided by Royal.

It spent a total of about pounds 90m in buying the company - more than pounds 4m of which went straight into Mr Snarey's pocket. Jackpot - but not for Royal. A few months later, the housing market collapsed.

Mr Snarey sat out the recession as an employee of Royal, managing part of its 800-branch estate agency chain. With the housing market showing renewed signs of life, however, he got itchy feet and left. Now he and Bill McClintock (who also sold an estate agency chain to Royal in the 1980s) are buying the 347-branch Cornerstone chain with the backing of Provident Life. The price? A mere pounds 8m, or about pounds 23,000 per branch. Jackpot again. Several million pounds richer, Mr Snarey has ended up with an even bigger estate agency chain than he had in the 1980s.

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