The Edinburgh-based firm, which changed hands itself for £210m last year, said the takeover would help to “significantly” accelerate its plans to double the size of its business by 2017.
Cala chief executive Alan Brown said Buckinghamshire-based Banner, which focuses on central and southern England, was a “perfect strategic fit” for the builder’s operations across Scotland, the Midlands and south-east England.
He added: “Banner has a deserved reputation as one of the finest luxury housebuilders in the UK and combining the two businesses will put us in the top ten of UK homebuilders, with significant growth potential.”
Banner sold 235 homes during the 12 months to May, at an average selling price of £511,000. That compares with Cala’s average price of £361,000 achieved in the six months to January.
The privately-owned builder, founded in 1975, delivered an operating profit of £16.4m on revenues of £111m last year and is sitting on a land bank of almost 1,100 units. Cala has an existing land bank of 10,770 plots.
Brown said the combined group will employ more than 600 people and is targeting a turnover of more than £800m by 2017, with the goal of selling about 2,000 homes a year for an average of £400,000.
He added: “Both businesses build high-quality homes, place a strong emphasis on customer service and have very similar cultures. I am tremendously excited about bringing together the best of Cala and Banner.”
Given its premium position in the housing market, Cala has seen little direct benefit from the UK government’s Help to Buy scheme, which offers
taxpayer-backed support to those trying to get on the property ladder. Earlier this month, Chancellor George Osborne announced he was extending the initiative, which had been due to end in 2016, until the end of the decade, making a further £6 billion available to provide interest-free loans up to 20 per cent for buyers of new-build properties in England.
Cala had been majority-owned by Bank of Scotland – now part of Lloyds Banking Group – since 1999, but was bought by insurer Legal & General and private equity firm Patron Capital in March last year. The builder’s management ploughed £10m into the business at the time of the deal.
The Banner acquisition has been funded with additional equity from L&G, Patron and fellow investor Electra Partners, with an increased debt facility from Bank of Scotland and Santander. No value was disclosed, but it is understood the takeover values Banner at about £200m.
A further investment from Banner’s senior directors brings the total management investment in Cala to £14m. Before its buyout, Banner was 75 per cent owned by the Prowting family, with management holding the remaining 25 per cent.
Brown said: “Both Cala and Banner are trading strongly and, with a positive market backdrop, the ongoing support of our shareholders and a strong management team, the combined business is well placed to meet our long-term growth plans.”