Bovis will pay 拢300m cash and the remainder in shares to acquire Linden Homes and Galliford Try Partnerships & Regeneration.
The two companies announced on 10th September that their boards had reached agreement in principle on a deal. The deal remains unchanged since then but has been fleshed it out with details to be put to a vote of shareholders.
Under the proposed deal, the share transfer will result in Galliford Try shareholders owning 29.3% of the enlarged Bovis Homes group.
Bovis plans to borrow 拢100m and raise 拢157m from a share placing.
The Galliford Try board said the sale would deliver 鈥渁n appropriate premium鈥� for the housing businesses and give Galliford Try shareholders a 29.3% shareholding in the enlarged Bovis Homes.
The deal more than doubles the size of Bovis Homes.
Linden Homes and Galliford Try Partnerships & Regeneration together generated revenues of more than 拢1,443m in the year to 30th June 2019, making operating profits of 拢195m. In 2018 Bovis Homes generated revenue of 拢1,061m and made an operating profit of 拢160m.
The combined house-building group will have a total consented land bank of more than 33,000 owned plots and approximately 33,000 plots of strategic land.
The deal also transforms Galliford Try into a 鈥渨ell-capitalised, standalone construction-focused group鈥�.
The construction business generated 拢1,387m revenue in the year to 30th June 2019 but made an operating loss of 拢15m.
Galliford Try chairman Peter Ventress said: "This transaction is a positive development which is in the best interests of both our shareholders and wider stakeholder group. For Galliford Try, it establishes a focused and well-capitalised construction business led by a very experienced and dedicated management team. Supported by a robust order book and strong market positions in key sectors, Galliford Try will be well positioned for the future. This transaction also creates one of the UK's leading Housebuilding and Partnerships businesses with great opportunity ahead, from which Galliford Try shareholders will benefit through their continued shareholding."
Bovis Homes, led by former Galliford Try chief executive Greg Fitzgerald, first approached Galliford Try on 4th April 2019 with a 拢1bn offer for its Linden and Partnerships businesses. The Galliford Try board rejected that approach but by September, following further negotiations, had relented.
Greg Fitzgerald 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.
鈥淭he combination with Galliford Try Partnerships gives Bovis Homes a market leading position in the high growth, more resilient partnerships market, with significant potential to increase revenue and profit while delivering more affordable homes at a time when they are needed more than ever.
鈥淚 am very focused on successfully integrating these businesses in early 2020 with strong management across all business areas, and on delivering the clear benefits from the combination including at least 拢35m of synergies as quickly as possible.
鈥淥ver the past few years we have worked hard to ensure the customer is central to everything we do. As a combined business, this commitment to delivering high levels of build quality and customer satisfaction will remain a core objective."
Got a story? Email news@theconstructionindex.co.uk
