Retirement home firm McCarthy & Stone yesterday confirmed plans for a return to the stock market with a flotation set to value the group at around £1 billion.
The Bournemouth-based business, founded in 1977, said it plans to raise £70 million in net proceeds from an initial public offering (IPO) on the London Stock Exchange by selling at least 25 per cent of equity in the firm to new investors.
The company had been listed on the stock market for more than 20 years until 2006 when it was taken private in a £1.1bn deal by a consortium led by Halifax Bank of Scotland (HBOS) and Sir Tom Hunter.
The UK’s largest retirement home builder said it plans to use the cash as part of its plans to invest £2.5bn to buy land and build new homes over the next four years. The firm said the retirement home market is under-supplied and aims to build 3,000 homes a year.
It added that around 3.5 million people in the UK are interested in buying a retirement home, but up until April last year only 128,000 such properties had been built.
Chief executive Clive Fenton said: “There is a structural under-supply of specialist retirement housing in the UK and McCarthy & Stone has the expertise, track record and financial strength to address this need.
“Listing on the London Stock Exchange will provide the ideal foundation for the group to move to the next stage of its development.”
The group’s major shareholders include lender Goldman Sachs and buyout firms TPG, Strategic Value Partners, Anchorage Capital Partners and Alchemy Partners. The float is expected to take place in November. The IPO would mark a turnaround for the group, which along with a number of other housebuilders, was restructured due to the fall in house prices as a result of the financial crisis.
After HBOS was rescued by Lloyds in early 2009, Lloyds became the major shareholder in McCarthy & Stone before selling its stake to the current shareholders.