The London-listed residential developer with a portfolio of private rented homes across the North West and beyond has agreed to be acquired by funds managed by a pan-European real estate private equity investor.
Under the deal valued at £188.4m, Six Bidco, which is managed by PineBridge Benson Elliot, would take over Sigma Capital Group at a level representing 61% of the company’s shares. The acquisition has been recommended unanimously by Sigma’s shareholders as part of a wider growth strategy but remains subject to approval of independent shareholders.
Late last year, Sigma appointed private bank Rothschild & Co to market the company for sale following a review of its options “to maximise value for shareholders and fund its future growth…in light of the strategic progress Sigma had made during the year, notwithstanding the Covid-19 crisis”, it said in a filing to the London Stock Exchange today.
“This process attracted participation from multiple well-funded parties,” it added. “Following a period of review…Sigma directors believe that the all-cash offer from Six Bidco represents the most attractive option for all Sigma shareholders in terms of value, the form of consideration offered and execution certainty.
“Discussions with all other interested parties have terminated.”
Sigma aims to further grow its business by forming new housebuilder partnerships, expanding operations into new regional markets, and widening its rental product offering, and would require “consistent access to capital to invest in scale into UK PRS product” to achieve this, it added.
“We are delighted that our independent directors intend to recommend this offer from PineBridge Benson Elliot, having reviewed a number of options from other parties,” said Sigma’s founder and chief executive Graham Barnet.
“We know the team well and believe our complementary skills, experience and sector knowledge, as well as PineBridge’s capital backing, will make a powerful combination.”
Sigma is the parent company of London-listed PRS Reit and its investment adviser, Sigma PRS Management. As of last March, Sigma PRS REIT had 34 sites in the North West, of which 21 were in Greater Manchester including Baytree Lane in Middleton; 10 were in Merseyside including Prescot Park in Prescot, and three were in Cheshire, including Woodford Grange in Winsford.
Sigma also helped to build the Thistle portfolio, in a partnership with Gatehouse Bank, which comprises around 900 income-producing single family build-to-rent homes in the UK including 918 homes across 15 neighbourhoods in Greater Manchester and Liverpool.
The portfolio was sold to Goldman Sachs’ merchant banking division, working with operating partner Pitmore, in January.