L&G takes full ownership of Cala Homes
Legal & General Group has bought the remaining stake in housebuilder Cala Homes from Patron Capital Partners, taking full ownership of the housebuilder.
The insurer, which was a minority shareholder, has bought the remaining 52.1% of the company for £315m plus transaction costs and financial adjustments. The transaction completes immediately.
L&G said the business had performed strongly under its joint ownership with Patron Capital Partners, with revenues growing threefold from £241m in 2013 to £748m in 2017, and profits growing at 12% over the last three years.
The total valuation of 100% of the equity in Cala Homes was £605m.
Kerrigan Procter, chief executive officer 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.”
Commenting on the deal, Mark Farmer, chief executive of Cast and author of an independent review into the capacity of the homebuilding industry, said: “Legal & General’s move to take over over Cala in its entirety is encouraging for the entire sector, as an injection of large scale fresh capital combined with L&G's much broader strategic ambitions to tackle the UK housing crisis on a number of fronts can only be a good thing.
“At a time of increasing uncertainty for the construction sector, acquisitions like this provide the strong and decisive leadership needed to address the industry’s many shortfalls.
He added: “As the capacity of the homebuilding industry continues to be challenged by skills shortages and Brexit-related risks in the movement of labour, the industry must think of novel and innovative ways to deliver more housing across all tenures to a high quality and also to deliver associated vital infrastructure projects.
“Personally, I am certain that this move will be a positive for an under pressure homebuilding sector being increasingly scrutinised for poor corporate governance, land banking, and its reliance on tax payer funded Help to Buy."