Propencity MBO finally goes ahead

The £23m management buy-out of Peterhouse's Propencity division, comprising Totty, Jackson and Dean & Bowes, has finally gone head.

The new construction and developement group will have an annual turnover of around £230m and will continue to use its three established brand names: Toty in the North, Jackson in the south and Dean & Bowes, the fit-out contractor based in Cambridgehsire.

The MBO team, led by Propencity managing director Phil Brierley, is backed by the Bank of Scotland. The deal is due to complete on 3 January. Brierly will assume the role of chief executive of the new group.

Peterhouse put Propencity up for sale earlier this year when chairman David Jackson announced the division was becoming drain. "It's a cash user, rather than a cash generator," Jackson said when announcing the group's interim results in September. Propencity's pre-tax profit slid to just £370,000 on a reduced turnover of £53m in the first six months of 2002. However Jackson said: "Historically it has done [margins of] 3% net and I see no reason why it can't get back to that figure."

Propencity acquired Dean & Bowes at the end of September.

Brierley said: "We know we have quality businesses and excellent teams of people and the MBO will allow us to achieve our strategy of becoming a balanced property and construction business. This year has been one of consolidation and re-structuring leading to reduced profits in the first half. However, we have performed well in the second half and that, combined with record order books, gives us tremendous optimism for the future".