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Bovis agrees £1.1bn deal to buy Galliford Try housing businesses
Bovis Homes has announced it has agreed to buy the housebuilding arm of construction giant Galliford Try in a deal worth nearly £1.1bn.
The house builder announced today that it has agreed a preliminary deal with Galliford Try to buy Galliford Try Partnerships and its housebuilding arm Linden Homes for £1.075bn.
It comes after Bovis revealed it had agreed “high-level terms” to buy the two divisions in September.
Shareholder meetings at both companies will be completed by 2 December, with the deal expected to be fully completed around 3 January next year.
The deal will be funded through a £300m cash payment, a £100m private debt placing to Bovis, and a £675m share issue of Bovis shares to existing Galliford Try shareholders on a pro rata basis.
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In a note on the deal to the stock market this morning, Bovis said the acquisition would give the company a leading position in the high growth, resilient partnerships and regeneration market as well as shift the partnerships’ revenue towards higher-margin land-led development.
In September, Greg Fitzgerald, chief executive at Bovis, said the deal which would see it pick up Galliford Try Partnerships would allow it to become the “go-to” for affordable housing providers at a time when affordable housing is most needed.
Galliford Try Partnerships currently works with nearly 70 housing associations, and last year achieved profits of £14.5m on a turnover of £284.9m.
Bovis launched its own partnerships business this year and Galliford Try Partnerships will now be merged with Bovis Partnerships.
Linden Homes had revenues of £820m in the 12 months up to April 2017 and achieved an operating profit of £19.6m.
Galliford Try’s construction arm will remain as a standalone business after the deal.
Bovis said it believes the transaction will achieve pre-tax cost synergies of at least £35m per annum by the end of the second full financial year following completion.
The agreement between both companies comes after Galliford Try rejected an initial bid from Bovis for its housing businesses in May.
