Deal worth £605m
Legal & General takes full ownership of Cala Homes
Alan Brown: ‘another exciting new chapter’
Scottish housebuilder Cala Homes has been acquired by Legal & General Capital in a deal that values the builder at £605 million.
Legal & General Capital has paid £315m to acquire the 52.1% of Cala which it did not previously own.
In a statement L&G said the business has performed strongly under the joint ownership with Patron Capital Partners.
Revenues have grown threefold from £241m in 2013 to £748m in 2017, and profits are up 12% over the last three years.
L&G believes that Cala Homes has attractive growth prospects under its continued ownership based on Legal & General Capital’s long term approach to investing and the attractive market for housebuilding in the UK.
Its said that if Cala Homes had been 100% owned by Legal & General during 2017 on a post transaction basis, the operating profit before tax would have been £91.5m. Legal & General reported operating profit before tax for its 47.88% stake in Cala Homes in 2017 of £42.5m.
The acquisition cost of the 52.1% share capital Legal & General did not own was £315m plus additional transaction costs and financial adjustments to reflect the contribution of management and Patron during the period of joint ownership.
Kerrigan Procter, chief executive of Legal & General Capital, said: “Legal & General is delighted to assume full ownership of Cala Homes, a growing business which we know and understand well.
“It has a strong management team with proven experience of managing a housebuilding business across business cycles, and has delivered great returns for shareholders since its acquisition in 2013, having tripled in revenue during this time. I am excited to be working with the team as Cala Homes continues to develop and grow under our continued ownership.
“Legal & General has valued the contributions of Patron over the past years and is pleased to have successfully grown the business together.”
Alan Brown, chief executive of Cala Homes, said: “Today’s investment by Legal & General marks the start of another exciting new chapter for Cala Homes and is a fantastic endorsement of our growth potential from one of the UK’s most highly-respected, blue-chip investors who shares our long-term vision.
“Over the past five years we have become one of the UK’s fastest growing housebuilders and this is testament to the strength and ambition of our team, the quality of our homes and our approach to customer service.
“We have also benefitted from the ongoing backing of our shareholders and I would like to take this opportunity to thank Patron for their support alongside Legal & General.”
Keith Breslauer, managing director of Patron Capital, said: “With the combined resources of Patron and Legal & General, we have worked successfully with the management team to support the growth of the business and consolidate Cala Homes’ position in the market.
“Over the last five years, Cala Homes has expanded significantly, growing twofold the annual volume of homes sold and fourfold the operating profits, delivering on the business plan set out at the time of Patron and Legal & General’s acquisition.
“Patron wishes to thank the CALA management for delivering on the plan and Legal & General for its support of the investment; we are confident that the business will continue to grow and thrive under Legal & General’s ownership. Patron remains committed to the UK residential sector with our extensive investment activities in this area.”