Construction firm Cala Group has agreed to a new partnership arrangement, which ultimately is a £200m takeover.
The Edinburgh-based firm will see Patron Capital Partners and Legal & General each take a 46.5% stake in the firm. The deal, which is valued at £210m, will leave Cala with a 7% share in the new company.
The move will come as a surprise to many in the construction industry. Cala also announced a 34% rise in its private home sales for the start of the year. In 2011, the firm also posted its highest profits in nearly 15 years, of £11.4m.
Speaking about the deal, Cala’s chief executive Alan Brown, explained the intention:
“We went out looking for new partners about nine months ago and have today signed up a deal with two excellent partners.
“We had a really good financial year which ended in June 2012 and the equity markets were moving in a positive way so it just made sense for us to go out and see if we could find somebody who would like to invest alongside us.”
Such tie-ups are becoming more and more common-place in Scotland, as is alternative finance such as invoice factoring. With Brown going on to say that with the firm’s debts reduced, and a “normalised” balance sheet now in place, significant growth is possible.
The investment from Patron and Legal & General further allows this, with Brown further explaining that the funds will emphasise the development and buying of new land.