Springfield Properties PLC (AIM:SPR) said it is is to buy the Scottish housebuilding business of Mactaggart & Mickel Group Ltd for £46.3mln in a deal expected to be earnings enhancing in the current year to end-May 2023.
The company is paying £10.5mln in cash on completion of the deal, with a deferred cash consideration of £35.8mln to be paid proportionally as homes are sold over the next five years, Springfield said in a statement.
The acquisition includes six live private and affordable sites with work in progress as well as a brand licence to build homes as Mactaggart & Mickel on a further 11 private and affordable sites, which will transfer to Springfield as homes are sold in line with the payments of the deferred consideration.
The total 17 sites have a gross development value of around £230mln and gross margins on the sites are expected to be in line with margins delivered by the rest of the Springfield group.
The acquisition also includes Timber Systems, a timber frame factory near Glasgow.
The two companies have entered into a strategic alliance which allows Springfield to buy further sites from Mactaggart & Mickel's remaining land bank in future.
"We are very pleased to welcome Mactaggart & Mickel's Scottish housebuilding business into the Springfield group. As well as bringing another premium brand into the group, this acquisition gives us land, with planning permission, in areas of significant demand,” said Innes Smith, CEO of Springfield Properties.
"The addition of a timber frame facility in the Central Belt, alongside our existing facility in Elgin, secures our supply of timber kits and provides further capacity to support our next stage of growth. It will also reduce our carbon footprint by enabling local manufacture of all kits.”