North-east housebuilder Springfield Properties has acquired Glasgow-based Dawn Homes for up to £20.1 million.
The listed company, which floated on the stock market last autumn, announced the takeover yesterday morning. It said it has conditionally raised £15m through the placing of 12.5m new ordinary shares with new and existing investors.
The firm said under the terms of the acquisition, it will pay an initial £17.6m, of which £15.5m will be settled in cash, with £2.1m being satisfied by the issue of 1.75m new shares.
It added an additional £2.5m may be payable in cash, depending on the company receiving zoning on Dawn Homes’ site at Johnstone, near Glasgow.
Sandy Adam, executive chairman of the company, 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. There is a massive need for more housing in Scotland and Springfield will play a significant part in addressing that need.”
Innes Smith, chief executive, added: “The acquisition is part of our stated strategy of accelerating growth through expansion into new areas. Through the purchase of Dawn Homes, we have gained another foothold in another part of Scotland. The focus of both companies continues to be looking after our customers, building great homes and building more homes.”
The directors of the firm believe the takeover will accelerate the company’s growth and significantly enhance its earnings in the first full year.
Dawn Homes sold 87 houses in the year to end January 2018 at an average selling price of £220,000.