Legal & General announces sale
of CALA Group
Legal & General Group Plc
("Legal & General" or "L&G" or the "Group") today announces
that it has agreed the sale of the UK house builder CALA Group
("Cala") for an enterprise value of £1.35bn, to Ferguson Bidco
Limited, an entity owned by funds managed by Sixth Street Partners
and Patron Capital.
The consideration for the sale will
result in cash proceeds of £1.16bn (after adjustment for net debt),
of which c£500m will be paid at closing with the remaining
consideration being paid over the next five years on a deferred
non-contingent basis. As at HY24, Cala had a Net Asset Value of
£1.15bn and generated operating profits of £42m.
The disposal reflects L&G's
disciplined approach to capital allocation and follows the Group's
decision to create a Corporate Investments Unit as outlined at the
Capital Markets Event ("CME") in June 2024.
Disposal proceeds from the
sale will primarily be used, as they become
available, to reinvest in the Group in line with our
strategy and the capital allocation framework set out at
the CME. The Board will also consider the proceeds as part of
the Group's announced intention to increase returns to shareholders
through ongoing buybacks. As signalled, the sale of Cala reduces
the Group's Solvency Capital Requirement (SCR) by c£100m after
diversification.
The transaction is expected to
complete in Q4 2024.
António Simões, Group Chief Executive Officer of Legal &
General said:
"This
transaction demonstrates continued momentum in executing our
strategy, simplifying our portfolio to enable a sharper focus on
our core, synergistic businesses. Cala has been an important part
of L&G for over a decade, with profits increasing ten-fold
since our initial investment in 2013[1]. The sale
announced today will provide capital to deliver our strategic goals
of sustainable growth alongside enhanced returns for
shareholders. I would like to thank the
whole Cala team for their contribution to the Group and wish them
every success in the future."
Kevin Whitaker, CEO of Cala said:
"Today's announcement is excellent
news for Cala. The acquisition by Sixth Street Partners and Patron
Capital demonstrates confidence in Cala's business plan and growth
potential, as our talented team continues to build high quality,
sustainable new homes throughout the UK. L&G has been a great
support to Cala throughout its investment and ownership. Since
2013, we have grown revenues and profits five- and ten-fold
respectively, and tripled the number of homes we build each
year."
Julian Salisbury, Co-Chief Investment Officer of Sixth Street,
said:
"Cala has a bright future and we are
proud to be entering this new chapter as stewards of a company with
such a deep history and long track record of sustainable growth.
We, together with Patron Capital, look forward to continuing to
support Cala and its management team, not only with capital but
also with the significant resources of our London-based real estate
investment team led by Giulio Passanisi."
Keith Breslauer, Managing Director of Patron Capital,
said:
"We are pleased to be able to back
the Cala business once again. Cala is one of the UK's leading
housebuilders with a best-in-class landbank and a focus on building
high-quality homes, being consistently ranked five-star for
customer service. Furthermore, Cala is also a people business with
a strong corporate culture and a business we know well, and we look
forward to working closely with Cala's impressive management team
and our partner, Sixth Street, to further build the business and
help tackle the undersupply of homes in the UK."
Notes
About Legal & General
Established in 1836, Legal &
General is one of the UK's leading financial services groups and a
major global investor, with £1.1 trillion in total assets under
management (as at HY24) of which c40% (circa £0.5 trillion) is
international.
We have a highly synergistic
business model, which continues to drive strong returns. We are a
leading international player in Institutional Retirement, in Retail
Savings and Protection, and in both public and private markets
through our Asset Management division. Across the Group, we are
committed to responsible investing and dedicated to serving the
long-term savings and investment needs of customers and society. As
at 17 September 2024, Legal & General has a market
capitalisation of £13.5bn.
About Sixth Street
Sixth Street is a global investment
firm with over $80 billion in assets under management and committed
capital. The firm's dedicated London-based real estate team
partners with property managers and institutional investors to
acquire, finance, and provide servicing expertise across the global
real estate sector. Sixth Street uses its long-term flexible
capital, data-enabled capabilities, and One Team culture to develop
themes and offer solutions to companies across all stages of
growth. Founded in 2009, Sixth Street has more than 650 team
members including over 200 investment professionals operating
around the world. For more information, follow Sixth Street on
social media and visit www.sixthstreet.com.
About Patron Capital
Patron represents approximately €5.2
billion of capital raised across several funds and related
co-investments, investing in property, corporate operating entities
whose value is primarily supported by property assets and
distressed debt and credit related businesses.
Since it was established in 1999,
Patron has undertaken more than 200 transactions across 110
investments and programs involving over 9 million square metres in
17 countries, with many of these investments realised.
Investors represent a variety of
sovereign wealth funds, prominent universities, major institutions,
private foundations, and high net worth individuals located
throughout North America, Europe, Asia and the Middle East. The
main investment adviser to the Funds is Patron Capital Advisers
LLP, which is based in London, and Patron has other offices across
Europe including Barcelona and Luxembourg; the group is comprised
of 61 people, including a 37-person investment team.
Further information about Patron
Capital is available at www.patroncapital.com
About Cala
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Cala Group is a major UK
housebuilder focused on building well-designed, high quality homes
in prime locations throughout the South of England, the Cotswolds
and Scotland.
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Cala started as the City of Aberdeen
Land Association in 1875 and was the first Scottish company listed
on the London Stock Market.
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Cala Group employs over 1,300 people
across 10 offices and has around 75 live developments at any
time.
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Cala was awarded the maximum 5 Star
rating in the Home Builders Federation's National New Homes
Customer Satisfaction Survey 2024, for the seventh year running.
The independent survey found that 93% of our customers would
recommend Cala to a friend.
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In the year ending 31st
December 2023 Cala Group sold 2,917 homes, resulting in a turnover
of £1.3bn and profit before tax (before exceptional items and
revaluations) of £112m.
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Cala is proud to have Samaritans as
its national charity partner. Cala's support will help to ensure
that Samaritans can continue to be there for anyone who is
struggling to cope. In turn, Samaritans provides training to help
equip Cala's staff - as well as employees of its subcontractors -
with the skills to take care of their own wellbeing and that of
their colleagues.
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Cala has made a commitment to help
fight the effects of climate change on the planet
by:
o Building homes that are operationally net zero carbon enabled
before 2030.
o Reaching net zero greenhouse gas emissions in line with the
Scottish Government's 2045 target and ahead of UK Government's 2050
target.
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Enquiries
Investors
Edward Houghton, Group Strategy
& Investor Relations Director
investor.relations@group.landg.com
+44 203 124 2091
Gregory Franck, Investor Relations
Director
investor.relations@group.landg.com
+44 203 124 4415
Media
Natalie Whitty, Group Corporate
Affairs Director
Natalie.Whitty@group.landg.com
+44 738 443 5692
Lauren Kemp, Group Head of Corporate
Media & Issues
Lauren.Kemp@lgim.com
+44 794 651 4627
Lucy Legh / Nigel Prideaux, Headland
Consultancy
LandG@headlandconsultancy.com
+44 20 3805 4822
