The developer has agreed terms to acquire certain trade and assets of SIG Building Systems, the modular offsite construction business of SIG, for a nominal £1.
The listed business was originally formed as the Sheffield Insulations Group. Under the terms of the deal, Splash will take on SIG’s modular factory in the East Midlands, all of its intellectual property, patents of its modular housing system and around 70 staff.
SIG said: “The divestment is part of the ongoing management of the group’s portfolio and is in line with the group strategy set out by the new management team in November last year.”
In the 2016 calendar year, SIG’s building systems division reported sales of £9.2m and made a loss before tax of £5.7m. Gross assets transferred on the sale are valued at £4.5m. SIG’s former parent will incur cash costs of £4.9m over the period to 31 March 2020.
As the Tom Bloxham-headed company looks to ramp up its presence in modular development, it has added two prominent figures to the Urban Splash Modular board, in architect and Channel 4 presenter George Clarke, who has worked with the firm in Smith’s Dock, North Shields, and North West motor trade entrepreneur Noel McKee.
Bloxham said: “We are pleased to have agreed terms on this acquisition with SIG; Urban Splash is committed to expanding its offsite construction capacity and this purchase is a way to vertically integrate our business and give us control of production. It is a testament to our commitment to, and investment in, modular housing.
“SIG has been a great company to work with, but as the factory gradually filled up with Urban Splash product, it became clear to all that its natural home was with Urban Splash. We will continue to work with SIG’s excellent supply chain and welcome our great new colleagues from SIG into the Urban Splash team.
“We are committed to delivering these homes because we know that the accelerated use of modular will help give this country more much-needed houses and will help meet Government aspirations and targets.”
Splash first used offsite construction with Moho, in its Castlefield heartland, but has stepped things up in the last two years by developing the House concept with architect Shedkm, under which buyers design the layout of their modular-built houses.
The first scheme, comprising 47 units, sold out in New Islington, Manchester and it now has two further sites under way, in Salford and North Shields, while a Birmingham site now has planning permission.
On his new board members, Bloxham said: “I have known and admired George and Noel for a number of years; they are both great entrepreneurs and it’s fantastic they have come on board as investors in and advisors to our modular housing business.
“Noel disrupted the used car market with WeBuyAnyCar.com; in housing, we’re challenging another traditional market – new homes – so Noel’s wealth of knowledge is crucial for us as we look to move innovation forward in this sector.
“George will give us a brilliant design counsel; he shares our passion for the way architecture can transform our everyday lives and believes that houses are the single most important pieces of architecture – and that everyone has the right to a decent, well designed home.”