Legal & General Capital acquires full ownership of Cala Homes

Kerrigan Procter

Insurance giant Legal & General has announced that its Legal & General Capital division has acquired the 52.1 per cent of Scottish housebuilder Cala Homes which it did not previously own.

L&G said the business had performed strongly under joint ownership with Patron Capital Partners, with revenues growing threefold from £241m in 2013 to £748m in 2017, and profits growing at a CAGR of 12 per cent over the last three years.

Legal & General said it believes CALA Homes has “attractive growth prospects” under its continued ownership based on its long term approach to investing and the “attractive market for housebuilding in the UK”.



L&G said that had CALA Homes been 100 per cent owned by it during 2017 on a post transaction basis, the operating profit before tax would have been £91.5m.

L&G reported operating profit before tax for its 47.88 per cent stake in CALA Homes in 2017 of £42.5m.

The total valuation of 100 per cent of the equity in CALA Homes was £605m. The acquisition cost of the 52.1 per cent share capital Legal & General did not own was £315m plus additional transaction costs and financial adjustments to reflect the contribution of management and Patron during the period of our joint ownership.

Kerrigan Procter, chief executive officer of Legal & General Capital, said: “Legal & General is delighted to assume full ownership of CALA Homes, a growing business which we know and understand well. It has a strong management team with proven experience of managing a housebuilding business across business cycles, and has delivered great returns for shareholders since its acquisition in 2013, having tripled in revenue during this time. I am excited to be working with the team as CALA Homes continues to develop and grow under our continued ownership.

“Legal & General has valued the contributions of Patron over the past years and is pleased to have successfully grown the business together.”

Alan Brown, chief executive of CALA Homes, said: “Today’s investment by Legal & General marks the start of another exciting new chapter for CALA Homes and is a fantastic endorsement of our growth potential from one of the UK’s most highly-respected, blue-chip investors who shares our long-term vision.

“Over the past five years we have become one of the UK’s fastest growing housebuilders and this is testament to the strength and ambition of our team, the quality of our homes and our approach to customer service. We have also benefitted from the ongoing backing of our shareholders and I would like to take this opportunity to thank Patron for their support alongside Legal & General.”

Keith Breslauer, managing director of Patron Capital, added: “With the combined resources of Patron and Legal & General, we have worked successfully with the management team to support the growth of the business and consolidate CALA Homes’ position in the market. Over the last five years, CALA Homes has expanded significantly, growing twofold the annual volume of homes sold and fourfold the operating profits, delivering on the business plan set out at the time of Patron and Legal & General’s acquisition.

“Patron wishes to thank the CALA management for delivering on the plan and Legal & General for its support of the investment; we are confident that the business will continue to grow and thrive under Legal & General’s ownership. Patron remains committed to the UK residential sector with our extensive investment activities in this area.”

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