Morgan Sindall Investments Limited has agreed to pay £2mln in cash for Ashley House's stake, £500,000 of which is to be deferred and should be received in instalments over the next twelve months including £200,000 that is dependent on the monies being generated from a particular scheme.
The terms of the deal stipulate that Ashley House must not work in the elderly care housing sector for three years but that still leaves similar fields open to the group, such as affordable housing and healthcare.
On the plus side, Ashley House has signed an agreement with the Morgan Sindall Group PLC (LON:MGNS) subsidiary to work on a pipeline of health, well-being and primary care developments across established health partnerships on which Morgan Sindall is already working.
Ashley House had previously flagged delays to deals that were in the Morgan Ashley pipeline and noted that this had caused a bit of a cash flow crunch.
The sale of its stake in Morgan Ashley will satisfy the short term cash requirements and enable Ashley House to restructure and return its focus to its key strengths as a developer of health and wellness buildings, as well as driving opportunities for its majority-owned modular business, F1 Modular.
"The board has reviewed funding and strategic opportunities available for the company and has concluded that the transaction and a re-focus on its key strengths in health development and modular construction are the most suitable options,” said Antony Walters, the chief executive officer of Ashley House.
“We look forward to being able to exploit opportunities in these sectors and further developing the company's strategic reach,” he added.