Legal & General announces sale of CALA Group
Legal & General announced that it has agreed to sell UK house builder CALA Group for an enterprise value of £1.35 billion, to Ferguson Bidco Limited, an entity owned by funds managed by Sixth Street Partners and Patron Capital.
The consideration for the sale will result in cash proceeds of £1.16 billion (after adjustment for net debt), of which £500 million will be paid at closing with the remaining consideration being paid over the next five years on a deferred non-contingent basis. As at HY24, Cala had a net asset value of £1.15 billion and generated operating profits of £42 million.
Disposal proceeds from the sale will primarily be used to reinvest in the group in line with its strategy and the capital allocation framework. The board will also consider the proceeds as part of the group’s announced intention to increase returns to shareholders through ongoing buybacks.
The transaction is expected to complete in Q4 2024.
“This transaction demonstrates continued momentum in executing our strategy, simplifying our portfolio to enable a sharper focus on our core, synergistic businesses. Cala has been an important part of L&G for over a decade, with profits increasing ten-fold since our initial investment in 20131. The sale announced today will provide capital to deliver our strategic goals of sustainable growth alongside enhanced returns for shareholders. I would like to thank the whole Cala team for their contribution to the Group and wish them every success in the future.” – António Simões, Group Chief Executive Officer of Legal & General.
“Today’s announcement is excellent news for Cala. The acquisition by Sixth Street Partners and Patron Capital demonstrates confidence in Cala’s business plan and growth potential, as our talented team continues to build high quality, sustainable new homes throughout the UK. L&G has been a great support to Cala throughout its investment and ownership. Since 2013, we have grown revenues and profits five- and ten-fold respectively, and tripled the number of homes we build each year.” – Kevin Whitaker, CEO of Cala.
“Cala has a bright future and we are proud to be entering this new chapter as stewards of a company with such a deep history and long track record of sustainable growth. We, together with Patron Capital, look forward to continuing to support Cala and its management team, not only with capital but also with the significant resources of our London-based real estate investment team led by Giulio Passanisi.” – Julian Salisbury, Co-Chief Investment Officer of Sixth Street.
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