Private equity group Terra Firma has struck a £110m deal to buy Kier Living.
Terra Firma has paid a deposit of £40m, with the balance to be paid on completion in the coming weeks.
It is conditional on shareholder approval at the May general meeting.
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Private equity group Terra Firma has struck a £110m deal to buy Kier Living.
Terra Firma has paid a deposit of £40m, with the balance to be paid on completion in the coming weeks.
It is conditional on shareholder approval at the May general meeting.
The new business will be named Tilda Homes and will be run by the existing senior leadership team.
Kier Group announced plans to sell the business as part of a strategic review in 2019 that sought to reduce high levels of debt. The business will focus on its core businesses in infrastructure services, construction and property.
In the year to 30 June, Kier Living completed more than 1,100 private and affordable home sales.
Guy Hands, chairman and chief investment officer of Terra Firma, said Kier Living “operates in the sweet-spot of the housing market, delivering affordably priced homes in areas with strong demand”.
Hands added: “Post-Covid, more and more people are thinking again about where they want to live, with a focus on having their own space, including more bedrooms and outdoor living areas.
“We believe the business, under a new, refreshed brand, has significant growth potential, and can play a critical role in delivering much-needed housing in communities across the UK. With the acquisition being equity funded, Kier Living’s ability to compete in the land market will be significantly enhanced.”
Andrew Davies, chief executive of Kier Group, said: “The actions we have taken over the last two years have created a strong operational platform for sustainable profitable growth and free cash flow.
“The disposal of Kier Living delivers another key milestone in the group’s strategy to simplify the business and strengthen its balance sheet.”
Kier Group is also continuing to consider an equity raise. It will publish interim results on 21 April.
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