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Bovis to house a deal with Galliford
Posted on Friday, 08 November 2019 10:42
Bovis Homes Group has agreed to buy the Linden Homes and Partnerships & Regeneration businesses of Galliford Try for GBP 1.08 billion.
The consideration includes new stock worth GBP 675.00 million, GBP 300.00 million in cash and the assumption of the vendor’s GBP 100.00 million senior unsecured notes due February 2027.
Upon completion, Galliford’s shareholders will own a 29.3 per cent stake in the enlarged company.
Bovis plans to fund the acquisition through a 9.9 per cent accelerated bookbuild, a GBP 100.00 million new term loan and by using resources from its balance sheet.
The deal remains subject to stockholder approval and is due to close on 3rd January 2020.
Linden Homes was formed in 1973 and is billed as one of the leading housebuilding and construction companies in the UK.
The group provides house-moving services such as home reach, which allows customers to buy a share of their chosen property and pay a low monthly rent for the holding they do not acquire.
Galliford’s Partnerships & Regeneration business works with local authorities, housing associations and investors to regenerate homes and buildings across the UK.
The company has 90 sites in production and serves a range of customers in the private rented, extra care and mixed tenure housing sectors.
For the financial year ended 30th June 2019, Linden Homes and Partnerships & Regeneration recorded group and share of joint ventures’ revenue of GBP 820.40 million and GBP 623.20 million, respectively.
The deal represents the end of a long acquisition process for Bovis, after it initially offered to buy the two divisions back in May.
At the time, the group’s GBP 1.05 billion bid, including debt, was rejected as it was deemed too low and not in the best interests for all of Galliford’s shareholders.
Greg Fitzgerald, chief executive of Bovis, said: “This is an exciting and transformational opportunity to create a leading UK housebuilder with an enhanced customer proposition and the ability to increase delivery to more than 12,000 new homes per year.”
The deal complements the buyer’s geographic footprint and provide opportunities to expand into attractive regions.
Furthermore, the combination of the Bovis and Linden Homes brands will increase the enlarged company’s overall production and sales.
The acquiror expects to post savings of around GBP 35.00 million by the end of the second full financial year following closing.
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