MILLER Homes has been sold to the Bridgepoint private equity business in a £655 million deal that puts a multi-million valuation on the holdings of the founding family.
Bridgepoint has bought a controlling stake in Edinburgh-based Miller Homes from funds managed by US financiers Blackstone.
The deal comes five years after Blackstone took control of Miller in the wake of the downturn in the housing market that was triggered by the credit crunch.
It follows a period of rapid growth for Miller. The company has capitalised on the recovery in the housing market in recent years which has been fuelled by record low interest rates.
Miller grew sales 13 per cent last year to £565m, from £500m in the preceding period, cementing its standing as one of the biggest housebuilders in the UK.
Profits increased 44 per cent to £89 million, reflecting buoyant market conditions.
Chief executive Chris Endsor said: “I look forward to welcoming Bridgepoint as our new shareholder as we undertake our next phase of growth, in an ongoing favourable macro-economic climate for UK housebuilding.”
In March Mr Endsor highlighted the strength of the market in Scotland, which accounts for around a quarter of Miller’s sales. The company focuses on building homes in the Glasgow and Edinburgh commuter belts.
The firm expects to grow annual sales volumes in Scotland by at least a third by 2020.
He noted the key factors to a sustainable housing market, such as low interest rates, improved and disciplined mortgage lending and high employment, remained in place.
The Government’s Right to Buy scheme has boosted housing market activity.
Bridgepoint partner Jamie Wyatt said yesterday: “The UK regional markets in which Miller operates are in good health with a positive sales environment and an attractive land buying market. Miller’s strategic position within those markets combined with its historic robust financial performance position it well to address future growth in the UK new build housing market where demand currently outstrips supply.”
Blackstone said it was delighted with the growth achieved by Miller since the firm invested in it.
The price is lower than the £800m it was suggested in April that Bridgepoint could pay for Miller Homes.
In October 2014 Miller Homes pulled plans for a £450m stock market flotation citing market volatility.
The company had planned to raise £140m to support growth.
The firm is part of Miller Homes Group, known as Miller Group when it completed a restructuring in the wake of the 2008 housing market downturn.
Control of the group passed from the founding Miller family to funds run by Blackstone’s GSO Partners arm.
Keith Miller of the founding family stepped down as group chief executive in March 2015 after 20 years in charge.
Companies house filings show Mr Miller owns around 1.5 per cent of the shares in the parent Miller Homes Group. Other shareholders in the group include Miller family trusts and Noble Grossart investment bank.
Miller Homes will retain its Edinburgh headquarters following the Bridgepoint deal. It has 183 employees in Scotland out of a total of 832.
Bridgepoint’s portfolio includes food chain Pret A Manger. The investment in Miller was made by its £3.6 billion Europe V fund.
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