Springfield Properties acquires Walker Group for £31m net

AIM listed housebuilder Springfield Properties has acquired Walker Holdings (Scotland) Limited (trading as Walker Group), a Livingston-based housebuilder focused on private housing in Edinburgh’s commuter belt, for a net consideration of up to £31.0 million.

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The net consideration of the acquisition is to be funded from Springfield’s existing cash balances and borrowing facilities with Bank of Scotland.

Under the terms of the Acquisition, the Group has paid an initial net consideration of £21.0 million in cash.

The Group will acquire £41.4 million of cash in Walker, as part of the gross consideration of £72.4 million.

Walker is a family housebuilder primarily targeting the two to five bedroom private home market in desirable locations within the Edinburgh commuter belt. Headquartered in Livingston, Walker is well-positioned to access the core markets of Midlothian as well as East and West Lothian – areas that have recently seen the highest rate of price growth in Scotland.

Walker’s developments generally comprise between 50 and 200 homes and the company also has the capability to deliver cost-effective larger, multi-phased schemes. Walker is currently developing five active sites with a gross development value (“GDV”) of £100 million and has five further sites in the pipeline with a GDV of over £300 million.

The Acquisition is in line with Springfield’s stated strategy of expanding its land bank and sales presence. The Acquisition utilises and exceeds the Group’s budget for its current financial year for land purchases and therefore supports and enhances the Group’s existing forecasts and visibility for future years. Walker has a highly complementary land bank and sales presence, located in the popular commuter belt surrounding Edinburgh. The Directors believe that the Acquisition will complement last year’s acquisition of Dawn Homes, which gave Springfield access to land and a sales presence in Glasgow’s commuter belt.

The Group will retain Walker’s premises in Livingston, all of the company’s 50 staff and the well- known Walker brand. Peter Matthews, Springfield’s Managing Director for Central Scotland (Private Housing), will take over the responsibility of running the Walker business.

Following the Acquisition, the Group is currently operating on a total of 43 active sites.

Sandy Adam, Executive Chairman of Springfield, said: “We are very pleased to have completed this acquisition and welcome Walker Group’s employees and customers to Springfield. Walker Group has a reputation for building excellent homes in great locations. The ethos among employees and the quality and location of the land bank are a great fit for Springfield.

“The acquisition has enabled us to diversify our land bank with sites at various stages of planning and development in East Central Scotland, where we have been looking to strengthen our foothold. We are pleased to have efficiently delivered a large proportion of our land-buying plans for the wider Edinburgh area, adding 10 sites to our land bank in one deal rather than with multiple individual deals. Walker’s active sites bring an immediate sales presence in new locations and the sites in the pipeline further strengthen our land bank and enhance our quality of earnings.

“The acquisition of Walker supports Springfield’s growth aspirations with land and skilled employees. It enables us to deliver housing more widely across Scotland at a time when supply continues to fall well short of demand and average house price growth in Scotland is ahead of the rest of the UK. Interest rates are low, mortgage availability is good, barriers to new entrants are high and Springfield is well positioned to benefit.”

Innes Smith, CEO of Springfield, said: “The positive experience we have had with the acquisition and integration of Dawn Homes last year makes us confident that an established company with great people, product and reputation like Walker will be a further positive addition to our group. This bulk addition to our land bank also gives us very good visibility in our three-year projections. Last year we strengthened our management structure with investment in four high calibre MDs responsible for distinct geographic areas. Peter Matthews, MD of Springfield Central Scotland, will take charge at Walker, adding to the Springfield developments for which he is already responsible. We look forward to working with the Walker team and continuing to grow our business.”

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