Galliford Try’s offer for Linden Holdings will cost £245m. The deal marks a further surge in Galliford’s housebuilding capability.
There are two parts to the spend: £110m for Linden’s shares and a further £135m to assume Linden’s debts. The offer is recommended by Linden’s board.
Over the past three years, Linden has built 1,000 to 1,100 units a year. Turnover in that period has grown from £200m to £280m, while profit before finance costs and tax have also moved upwards from £23m to £30m.
A spokesman for Galliford was unable to specify the size of Linden’s finance costs.
A statement from Galliford said that Linden’s housebuilding operations “overlap and complement” its own in the South East of England. The combination will cover a larger region, running from the West Country to Lincolnshire.
The enlarged housebuilding division will have a 3,000-a-year capacity, which would position it among the top 10 players in the sector.
Linden’s operating margin of 11% is lower than Galliford’s figure of 14%. Galliford says it will lift Linden’s performance level to match its own.