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Kier completes £110m sale of housing business
The £110m sale of Kier’s housing business has been completed, with the newly acquired company to be rebranded as Tilia Homes.
The successful completion comes just over a month after it was announced that private equity investor Terra Firma and the large national construction company had agreed a deal for Kier Living.
Terra Firma is one of Europe’s largest private equity firms and has invested more than €17bn in 34 businesses since it was created in 1994. It was founded and is led by renowned investor Guy Hands.
The deal comes two years after Kier Group first put its housebuilding business up for sale in a bid to reduce the massive debt pile it had accrued. The decision came after a two-month strategic review of the company and a £250m rights issue was announced to reduce the debt pile.
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The business will be rebranded Tilia Homes and will be run by its existing management team, with David Bridges holding on to the position of chief executive.
The organisation currently employs 430 people and completed 1,100 private and affordable homes in the 12 months up to June 2020.
The deal agreed in April was subject to Kier’s shareholders accepting and would see Terra Firma, through its subsidiary Forster BidCo, pay £110m in cash on completion.
At the time, Kier said the deal would help simplify its business and remove the capital requirement to support land acquisition and remove off-balance sheet debt associated with certain Kier Living joint ventures.
Speaking about the deal, Mr Bridges said: “The completion of Kier Living’s sale is a really positive step for our teams, customers and partners, and presents an exciting opportunity to move forward with our new owner and invest in our future.
“The backing of Terra Firma will enable the business to build on our strong foundations and create a thriving and sustainable company which delivers quality homes and a first-class customer service. With the acquisition being equity-funded, our ability to compete in the land market will be significantly enhanced and continuing our active land acquisition programme will be a key pillar of our future growth plans.”
Mr Hands, chair and chief investment officer at Terra Firma, commented: “With the successful completion of the sale now behind us, Terra Firma are delighted to work with David and the management team to drive the business into this new and exciting phase. Under a new, refreshed brand – Tilia Homes – we believe the business will play a crucial role in delivering high-quality, affordably priced housing across the UK.”
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