The housebuilder has agreed to buy Galliford Try’s Linden Homes and Partnerships arms, which are delivering a number of large-scale schemes across the region.
The deal for Gallford Try’s housing businesses has been ongoing for some time and with the sale now agreed, Bovis will aim to create a “top five UK housebuilder” with the capacity to deliver more than 12,000 homes a year in the medium-term.
The £1.1bn purchase is being supported by £300m cash coming from Bovis’ balance sheet and a £100m loan.
Galliford Try said the deal would allow it to “transform into a well-capitalised, standalone construction-focussed group”, with the company currently operating both a construction and infrastructure business.
Galliford Try Partnerships has been prolific in the North West in recent years, bringing forward large-scale schemes in Partington, Carrington, Runcorn, and Cheshire.
The group is set to deliver 237 homes and 100 extra-care apartments at Sandymoor in Runcorn in a joint venture with Together Housing, while in July this year, the group bought three sites in Ellesmere Port and Winsford from Cheshire West & Chester Council to deliver 188 homes.
Its largest scheme is in Partington, where it is working in partnership with Trafford Housing Trust to deliver up to 600 homes on a 72-acre site.
Greg Fitzgerald, former chief executive of Galliford Try and now chief executive of Bovis Homes, said: “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.”
Peter Ventress, chairman of Galliford Try, added: “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.”