Springfield Properties plc acquires Tulloch Homes for £56.4 million

The Maples, Tulloch Homes.

Springfield Properties plc (AIM: SPR), a leading housebuilder in Scotland delivering private and affordable housing, announces the conditional acquisition of Tulloch Homes, an Inverness-based housebuilder focused on building high-quality private housing in the Scottish Highlands, for a net consideration of £56.4 million.

This is Springfield’s third acquisition since joining the market in 2017, becoming Scotland’s only listed housebuilder.

The acquisition significantly enhances Springfield’s foothold in the Scottish Highlands in and around Inverness – an area of high and growing demand. It is expected to be earnings enhancing from the current year and significantly enhancing from the first full year of ownership.

The Company also announces a proposed placing of new ordinary shares at a price of 140 pence per share to raise gross proceeds of £22.0 million. The placing is being conducted via an accelerated bookbuild and the net proceeds will be used to re-finance part of the initial cash consideration of the acquisition.

Please find some highlights below and additional details in the announcement attached. If you would like anything further or to speak with the company, please let me know.

Acquisition Highlights

  • Acquisition of Tulloch Homes, a profitable, cash generative and well-run housebuilder with significant land ownership in the Scottish Highlands around Inverness.
  • Total net consideration of £56.4 million, being gross consideration of £77.6 million less expected net cash in the Tulloch Homes business, on completion, of not less than £21.2 million, is comprised of:
    • Initial net cash consideration of £43.4 million; and
    • Deferred cash consideration of £13.0 million.
  • The Directors believe the Acquisition will:
    • Accelerate the growth of Springfield;
    • Enhance the Company’s foothold in an area of high demand in Scotland, and where Springfield has been organically building a presence in recent years, in line with the Company’s strategy of expanding via acquisition and into new territories to accelerate growth;
    • Reinforce supply chain capabilities such as gaining access to labour and subcontractors;
    • Strengthen the Company’s private housing land bank and create opportunity for affordable housing;
    • Bring a strong, established management team into the Company; and
    • Enhance earnings from the current financial year and significantly enhance earnings from first full year of ownership.
  • Completion of the acquisition is conditional upon binding commitments being received from investors in the placing of not less than £22.0 million (or such lesser amount as Springfield may in its absolute discretion elect).

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BDC 314 : Mar 2024