Bovis Homes agrees £1.1bn deal for Galliford Try’s housebuilding arm

November 7, 2019 / Isla MacFarlane
Bovis Homes agrees £1.1bn deal for Galliford Try’s housebuilding arm

Bovis Homes has struck a deal worth over £1.1bn with Galliford Try to acquire its housebuilding arm, following months of dancing around.

The deal will give Galliford Try shareholders £675m of shares in the new plumped up Bovis, equating to a 29.3% share. Bovis will also pay Galliford Try £300m in cash for its Linden Homes and Galliford Try Partnerships & Regeneration.

As a result of the agreement, Bovis will be inflated to nearly twice its current size and will become one of the top five largest housebuilders in the UK. The enlarged Bovis will have the capacity to deliver 12,000 homes a year.

The deal still needs the shareholders of both companies to give it the green light. They will vote on 2 December with a view to completing the acquisition on 2 January.

Peter Ventress, Chairman of Galliford Try plc, 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 has been bidding for Galliford Try’s housebuilding business for many months. Talks seemed to hit a wall in May this year, before being revived in September.

Greg Fitzgerald, CEO of Bovis Homes 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.

The 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.

“I 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 £35 million of synergies as quickly as possible.

Over 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.”

Galliford Try’s shares were nearly 3% down this morning, while shares in Bovis inched up 0.26%.

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