Scottish housebuilder Springfield Properties (LON:SPR) is to acquire Livingston-based Walker for a cash consideration of up to £31mln net.
The deal will boost Springfield’s earnings by over 10% and expand its land bank and sales presence in the area surrounding Edinburgh.
Springfield will pay an initial £21mln, followed by £6mln when planning permissions on Carlaverock come through and £4mln in deferred consideration. The gross consideration is £72.4mln but Walker has £41.4mln of cash.
Walker specialises in two to five bedroom family homes within the Edinburgh commuter belt, an area where prices are rising strongly.
Springfield's specialist affordable housing division also plugs a gap in Walker's capability.
Walker is currently developing five active sites worth £100mln with five further sites worth £300mln in the pipeline.
Acquisition trail
Last year, Springfield acquired Dawn Homes, which gave it a sales presence and land in Glasgow's commuter belt.
Sandy Adam, Springfield’s executive chairman said: "Walker Group has a reputation for building excellent homes in great locations.
"The acquisition has enabled us to diversify our land bank with sites at various stages of planning and development in East Central Scotland, where we have been looking to strengthen our foothold.
Supply continues to fall well short of demand and average house price growth in Scotland is ahead of the rest of the UK, he added.
"Interest rates are low, mortgage availability is good and barriers to new entrants are high."
Shares rose 4% to 122.5p, valuing Springfield at £113mln.