Springfield swoops on Dawn Homes in £20.1m deal
Sandy Adam: ‘rare opportunity’
Springfield Properties has acquired Dawn Homes in a £20.1 million deal which will expand its operations in west central Scotland and Ayrshire.
A placing of 12.5m shares with existing and new investors has raised £15m towards th cash element in acquiring DHomes 2014 Holdings Limited, trading as Dawn Homes, a Glasgow-based housebuilder focused on private housing.
Springfield, which floated on the stock market last year, will pay an initial £17.6m, of which £15.5m will be settled in cash and initially financed by available headroom within the company’s existing revolving credit facility
A further £2.1m will be in new ordinary shares. An additional £2.5m may be payable in cash, contingent on the company receiving zoning on Dawn Homes’ site at Johnstone, near Glasgow, and is expected to be financed from available free cash flow at that time. Springfield will assume net debt of approximately £6.7m.
The directors believe the acquisition will accelerate the company’s growth and be significantly earnings enhancing in its first full year.
It will expand its land bank in west central Scotland and Ayrshire and provide an established supply chain in Glasgow with access to local labour and subcontractors.
The placing of 12,500,000 Placing Shares with new and existing investors is at 120p per share, a 3.2% discount to the closing price on 1 May.
Sandy Adam, executive chairman, said: “This was a rare opportunity to acquire a profitable company that builds great homes.
“Dawn Homes is a well-run business with an excellent reputation in western central Scotland. I am delighted that they are joining our team and welcome all their employees into our company.
“There is a massive need for more housing in Scotland and Springfield will play a significant part in addressing that need. We will be supporting the skilled Dawn Homes team to build more homes each year. Overall, this acquisition will enable Springfield to grow and deliver housing more widely across Scotland.”
Innes Smith, CEO of the company, added: “We are delighted to have successfully completed this placing and for the strong support received from new and existing investors.
“The acquisition is part of our stated strategy of accelerating growth through expansion into new areas.”