Springfield Properties, the fast-growing Scottish housebuilder that floated on the stock market last autumn, has swooped to buy Glasgow-based Dawn Homes for up to £20.1 million.
Springfield, which is quoted on the Alternative Investment Market, also announced a placing of shares with new and existing institutional shareholders to raise £15m as part of the transaction.
The group, which is run by chief executive Innes Smith, will pay £17.6m in cash and shares upfront, and a possible additional £2.5m in cash dependent on Springfield receiving zoning on Dawn Homes’ site at Johnstone, near Glasgow.
The acquiror said that the deal would accelerate its growth and “expand the company’s private landbank in west central Scotland and Ayrshire in line with stated strategy to expand into new new regions”.
Sandy Adam, executive chairman of Springfield and grandson of the firm’s founder Wilfred Adam, said: “This was a rare opportunity to acquire a profitable company that builds great homes. Dawn Homes is a well-run business with an excellent reputation in Western Central Scotland.
“I am delighted that they are joining our team and welcome all their employees into our company. There is a massive need for more housing in Scotland and Springfield will play a significant part in addressing that need.
“We will be supporting the skilled Dawn Homes team to build more homes each year. Overall, this acquisition will enable Springfield to grow and deliver housing more widely across Scotland.”
The deal is expected to be “significantly earnings enhancing in its first full year”, Springfield added. Dawn Homes sold 87 houses in the year to end-January 2018 at an average selling price of £220,000. It has 49 employees.