Springfield buys fellow housebuilder for £46m

Affordable-home builder Springfield Properties is to buy the housebuilding division of Glasgow-based Mactaggart & Mickel Group in a deal worth £46.3m.

The pair have entered into an agreement that will see Springfield, which has offices in northern and central Scotland, deliver homes under the Mactaggart & Mickel brand on six live sites and 11 future developments across the country’s central belt.

Some 700 homes are expected across these schemes, with an estimated gross development value of £230m.

The acquisition includes Mactaggart & Mickel’s Timber Systems factory near Glasgow, which will become Springfield’s second wooden-frame production site.

The acquiring company said it would retain all employees across the purchased housebuilding and timber systems units.

A strategic alliance will establish further opportunities for Springfield to buy sites from Mactaggart & Mickel’s remaining land bank across Scotland in the future.

A £10.5m cash sum will be paid on completion of the acquisition deal, coming from existing cash and debt facilities, with a deferred consideration of £35.8m to be paid as homes are sold over the next five years.

Springfield Properties said it expected the acquisition to enhance earnings in the current year to 31 May 2023.

The firm reported a 51 per cent hike in revenue to £216.7m in the 12 months to 31 May 2021, and said it expected to report further growth in the year to 31 May 2022, when it makes its full-year results announcement in September.

Springfield Properties chief executive Innes Smith said: “As well as bringing another premium brand into the group, this acquisition gives us land with planning permission in areas of significant demand.

“The structure of the acquisition – with the majority of the payment to be made as homes are completed – de-risks the deal, and creates an effective and efficient means of acquiring land.

“The addition of a timber-frame facility in the Central Belt, alongside our existing facility in Elgin, secures our supply of timber kits and provides further capacity to support our next stage of growth. It will also reduce our carbon footprint by enabling local manufacture of all kits.”

Mactaggart & Mickel group finance director Paul McAninch said the agreement “provides a strong platform for growth for both parties”.

“Our company has had a proud tradition as a leading housebuilder in Scotland, which is built on the work of its dedicated teams,” he added.

“This tradition will continue, and I’m pleased that there will be continuity of employment as a result of this agreement. I’d like to wish transferring colleagues every success for their future.”

Mactaggart & Mickel’s group turnover was up 11 per cent to £73.2m in the year to 30 April 2021.

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