Thursday 7 November 2019 9:36 am

Bovis Homes agrees £1.1bn deal for Galliford Try housing business

Bovis Homes has agreed to snap up Galliford Try’s housing arm for almost £1.1bn.

The housebuilders have shaken hands on a deal that will see Bovis stump up £300m cash and £675m in shares to acquire Linden Homes and Galliford Try Partnerships & Regeneration.

Read more: Uncertain times are leading to London property microclimates

The move will more than double the size of Bovis’s housebuilding operations, making the firm one of the five largest residential developers in the country.

Galliford Try will continue as as a standalone, listed construction business.

The deal, which will be voted on by shareholders early next month, will formally be completed on 3 January 2020.

Jefferies said: “Compatibility appears strong, and even without the cost savings which management envisages, the combination of Bovis & Galliford Try’s housing & partnership has the capability to produce profitability at the top end of peers.”

It added: “However, integration is not without risk and the journey time extended. With dividend yield unlikely to prove differentiated in a sector context, proof of progression may be required before any premium is afforded.”

Read more: Falling London house prices hit Foxtons

Greg Fitzgerald, chief executive of Bovis Homes said: “This is an exciting and transformational opportunity to create a leading UK housebuilder with an enhanced customer proposition and the ability to increase delivery to more than 12,000 new homes per year.”

He added: “The combination with Galliford Try Partnerships gives Bovis Homes a market leading position in the high growth, more resilient partnerships market, with significant potential to increase revenue and profit while delivering more affordable homes at a time when they are needed more than ever.”