Countryside Properties PLC Acquires Westleigh Group Limited
Countryside Properties PLC, a leading UK home builder and regeneration partner, announces today that it has acquired Westleigh Group Limited for total cash consideration of up to £135.4 million on a debt free and cash free basis.
- Increases the scale of our Partnerships Division and further accelerates growth
- Westleigh partnerships business delivered 1,159 mainly affordable homes in FY 2018
- Operations across the Midlands and South Yorkshire
- Land bank of 4,981 plots and overall new business pipeline of 13,000 plots
- Consideration of up to £135.4m based on future growth and funded from existing bank facilities
- Expected to deliver high single-digit accretion to adjusted earnings per share in the first full year of ownership
Westleigh is a well established partnerships home builder, headquartered in Leicester, covering the Midlands and South Yorkshire. In the year ended 31 March 2018, Westleigh delivered 1,159 homes in partnership with local authorities and housing associations of which 92 per cent were affordable. On an unaudited basis, revenue was £150.6m, operating profit was £15.6m and gross assets were £76.1m at 31 March 2018.
The business was founded in 1985 by the current Chairman, Chris Beighton, who will step down from his role on completion. The experienced management team and the company workforce of 456 will be retained to continue the growth of the business.
Strategic rationale for the Acquisition
Total consideration in cash for the Acquisition is up to £135.4m. This represents an approximate 6.5 times EBITDA multiple in the first full year of ownership. Up to £23.5m is deferred for two years from completion, a proportion of which is subject to performance. The Acquisition is funded from existing cash balances and borrowing facilities. The Acquisition is expected to deliver high single digit accretion from the first full year of ownership.
The acquisition of Westleigh is in line with Countryside's existing strategy to expand its Partnerships business. Westleigh broadens the geographical reach of Countryside's Partnerships business into regions that have strong underlying demand. It provides a strong strategic and cultural fit with the Countryside model and is an excellent platform for the acceleration of Partnerships delivery.
Countryside's mixed tenure model of delivering private for sale, private rental sector and affordable homes together with the enhanced buying power from being part of a larger group will improve underlying returns in the Westleigh business.
Commenting on the acquisition, Ian Sutcliffe, Chief Executive of Countryside, said:
"Westleigh is a well run business with a strong strategic, geographic and cultural fit to Countryside and provides us with an excellent platform for further Partnerships growth. We see huge opportunity in combining Westleigh's regional expertise with the Countryside mixed tenure business model."
Countryside's trading for the first six months of the financial year has been in line with its expectations. It will update the market on 18 April 2018 on Group performance and its half year trading statement for the six months to 31 March 2018.