Renew sells Allenbuild business
RENEW has sold the new build affordable housing part of its Specialist Building business.
Leeds-based Renew’s Allenbuild business has been sold to Places for People Group (PFP) for £2.75m.
The cash sale is taking place in two tranches. PFP has acquired 50% of the issued share capital for £1.375m which has been paid in full. The second tranche, whereby PFP will assume 100% ownership of Allenbuild, will occur after ten outstanding contracts reach practical completion, which is expected to be in about 12 months’ time.
PFP is one of the largest property and leisure management, development and regeneration companies in the UK. It owns or manage 148,000 homes and has assets in excess of £3bn. It has Yorkshire-based offices in Leeds, Hull, Sheffield and York.
During the joint ownership period, Renew, which operates in UK infrastructure markets, will retain the benefit of these ten contracts and PFP will have the benefit of four new contracts and any further new work which Allenbuild subsequently procures. There are arm’s length commercial agreements in place which will endure throughout the joint ownership period.
In its results for the year ended September 30 2014, Renew will account for the results of Allenbuild as a discontinued business. Renew said it considers that the effect of this transaction will be to reduce reported Specialist Building revenue from continuing operations for the year end by approximately £50m but that there will be no impact to the expected operating profit from continuing operations. The transaction is expected to have a similar impact on results from continuing operations for the year ending September 2015.
Renew’s preliminary annual results will be announced later this month.
Debbie Jackson and Graham Mackenzie from Walker Morris advised Renew on the transaction.
Jackson said: “We are delighted to be working with Renew again and this is our third transaction in six months for them. This highlights the upsurge in deal activity across the market that we have seen in general this year.”
Usman B Malik of Grant Thornton also advised Renew on the transaction.
