UPDATE 1-Legal & General to buy stake in UK housebuilder Cala
LONDON, March 18
LONDON, March 18 (Reuters) - Insurer Legal & General said on Monday it has bought a 46.5 percent stake in Cala Group from Lloyds Banking Group in a deal that values the British housebuilder at 210 million pounds ($318 million).
L&G made the acquisition alongside private equity group Patron Capital Partners, which will also buy a 46.5 percent stake, while Cala's management will take a 7 percent share. The deal will be financed by 140 million pounds of equity and 70 million pounds of debt.
L&G said its 65 million pound equity investment would be financed from its own resources, and is expected to be earnings accretive for L&G in its first year and to deliver a return above the group's weighted average cost of capital.
Cala, which builds homes in Britain's Cotswolds region and around Glasgow and Edinburgh in Scotland, posted profits before tax of 11.4 million pounds and had gross assets of 354 million pounds for the year to the end of June.
L&G's investment comes after a year of robust profits at British housebuilders such as Persimmon and Taylor Wimpey, which have largely beaten a sluggish market with the help of government support and a strategy of buying land cheaply during the recession.