Bovis Homes has agreed a deal for UK builder Galliford Try’s residential business, more than doubling the size of its housing development business. Galliford shareholders will hold a stake of 29.3% in the enlarged Bovis Homes.
Jefferies analysts say that the combination of Bovis and Galliford Try’s residential businesses has the capability to generate profitability at the top end of peers.
Bovis says that it expects the Galliford housing arms to boost its earnings per share by the low double digits in the first full financial year after completion.
Under the cash-and-share deal initially proposed in September and due to close in January, Bovis will buy Galliford’s Linden Homes and Partnerships & Regeneration businesses for £1.08bn.
Linden Homes and Partnerships & Regeneration together brought in £1.44bn of sales in 2018. Bovis’ total revenue in the same period stood at £1.06bn.
Bovis in 2017 had rejected an approach from Galliford.