Bovis to buy Galliford Try housing arm for just under £1.1bn
FTSE 250 housebuilder Bovis Homes said on Thursday that it had agreed to buy the housing business of Galliford Try for just under £1.1bn.
Bovis will pay £300m in cash and £675m in shares for the housing arm in a deal that will create a top five national housebuilder with the capacity to deliver more than 12,000 homes a year over the medium term.
The deal is expected to be low double-digit earnings per share enhancing in the first full financial year after completion, with further "significant" EPS enhancement in the second year, Bovis said.
Chief executive Greg Fitzgerald 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 £35m of synergies as quickly as possible."
Bovis announced a placing of up to 13.5m shares to part-fund the acquisition, in which it expects to raise gross proceeds of as much as £157m.
At 0830 GMT, Bovis shares were up 0.3% at 1,167p and Galliford shares were 1.9% higher at 720.50p.