Legal & General has agreed the sale of housebuilder CALA Group to private equity investors for an enterprise value of £1.35 billion.
The sale, to US investment firm Sixth Street Partners and real estate investor Patron Capital is expected to complete in Q4 2024.
Cala was founded in 1875, originally as the City of Aberdeen Land Association, with around 1,300 people in its employ.
The housebuilder is aiming to and to construct 3,000 new homes annually throughout Scotland, the Cotswolds, and the South East of England.
Legal & General Capital acquired full ownership of CALA Homes in May 2018, acquiring 52.1 per cent of the business which it did not previously own for £315 million from Patron It first bought a share in the business in 2013.
Earlier this year, FTSE-100 company Persimmon Homes was rumoured to make a potential offer for Cala Group which Legal & General (L&G) had put up for auction via Rothschild.
CALA’s latest financial results for the year ended 31 December 2023 showed turnover fell to £1.26 billion from £1.35 billion in the previous year, with 2,917 homes sold compared to 3,027 in 2022, generating a pre-tax profit of £112.3 million.
Kevin Whitaker, CEO of Cala, said: “Today’s announcement is excellent news for Cala. The acquisition by Sixth Street Partners and Patron Capital demonstrates confidence in Cala’s business plan and growth potential, as our talented team continues to build high quality, sustainable new homes throughout the UK.
“L&G has been a great support to Cala throughout its investment and ownership.
“Since 2013, we have grown revenues and profits five- and ten-fold respectively, and tripled the number of homes we build each year.”
Julian Salisbury, co-chief investment officer of Sixth Street: “Cala has a bright future and we are proud to be entering this new chapter as stewards of a company with such a deep history and long track record of sustainable growth.
We, together with Patron Capital, look forward to continuing to support Cala and its management team, not only with capital but also with the significant resources of our London-based real estate investment team led by Giulio Passanisi.”
Keith Breslauer, managing director of Patron Capital, said: “Cala is one of the UK’s leading housebuilders with a best-in-class landbank and a focus on building high-quality homes, being consistently ranked five-star for customer service.
“Cala is also a people business with a strong corporate culture and a business we know well, and we look forward to working closely with Cala’s impressive management team and our partner, Sixth Street, to further build the business and help tackle the undersupply of homes in the UK.”
António Simões, group CEO of Legal & General, said: “This transaction demonstrates continued momentum in executing our strategy, simplifying our portfolio to enable a sharper focus on our core, synergistic businesses.
“Cala has been an important part of L&G for over a decade, with profits increasing ten-fold since our initial investment in 2013.
“The sale announced today will provide capital to deliver our strategic goals of sustainable growth alongside enhanced returns for shareholders. I would like to thank the whole Cala team for their contribution to the Group and wish them every success in the future.”
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