Henry Boot secures agreement to acquire 100 per cent of Stonebridge Homes
Property development business Henry Boot has agreed a deal to buy out its joint venture partner of Stonebridge Homes.
The transaction will be undertaken in three tranches over the next five years with anticipated fixed payments totalling £30m and additional payments linked to Stonebridge's performance, Henry Boot said in a statement.
Stonebridge Projects Ltd (SP) is the joint venture partner selling its entire 50 per cent shareholding in Stonebridge.
Tim Roberts, Chief Executive Officer, Henry Boot, commented: "This transaction represents an important strategic milestone for Henry Boot, allowing us to acquire full ownership of a high growth builder of premium residential homes that we already know well through our existing 50 per cent share in the business.
"The acquisition of Stonebridge also further cements our position in the UK house-building sector, a market which currently benefits from a number of supportive structural and political tailwinds, while at the same time simplifies Henry Boot's structure.
"The consideration is performance linked, and the phased structure is designed to generate strong returns whilst maintaining gearing within our optimum range of 10 per cent to 20 per cent.
"All of this gives us confidence that this transaction will help drive enhanced shareholder value over the medium term and will be a significant part of our plans for growth."
Stonebridge is focused on building homes in Yorkshire and the North-East.
The business has grown significantly since it was founded in 2010, increasing output by an average 25 per cent per annum over the past 10 years, the statement said.
"In addition, in the five years ending December 31 2023, both revenue and operating profit more than doubled, reaching £94.4m and £5.9m, respectively. In 2023 Stonebridge completed 251 homes and has a medium term target of delivering up to 600 new homes annually.”
In a statement, Henry Boot said: “This transaction aligns with Henry Boot's strategy of focusing on high quality land, prime property development and premium homes.
"The board believes the transaction is in the best interests of Henry Boot shareholders as a whole and expects the transaction to create significant shareholder value.”
Henry Boot said the deal will provide an opportunity to increase exposure to the UK residential market, which benefits from strong structural trends.
The statement added: “The UK residential market is driven by positive long term trends, such as population growth and the Government's new target to build 1.5m new homes over the next five years, with improvements to the planning system being implemented to help achieve that goal.”
“According to Nationwide, house prices were up 1.9 per cent across England in the third quarter of 2024 compared with the same period last year. In particular, Northern England, where Stonebridge is focused, continues to outperform Southern England with prices up 3.1 per cent year-on-year.”