The deal values CALA Group at an enterprise value of £1.35 billion.
Under the terms of the agreement, Legal & General will receive £1.16 billion in cash, adjusted for net debt. An initial payment of £500 million will be made at the deal’s closing, with the remaining amount to be paid over the next five years on a deferred, non-contingent basis. CALA Group had a net asset value of £1.15 billion as of the first half of 2024 and reported operating profits of £42 million.
António Simões, Group Chief Executive Officer of Legal & General said: “This transaction demonstrates continued momentum in executing our strategy, simplifying our portfolio to enable a sharper focus on our core, synergistic businesses. Cala has been an important part of L&G for over a decade, with profits increasing ten-fold since our initial investment in 20131.”
He continued: “The sale announced today will provide capital to deliver our strategic goals of sustainable growth alongside enhanced returns for shareholders. I would like to thank the whole Cala team for their contribution to the Group and wish them every success in the future.”
Legal & General plans to reinvest the proceeds into the business in line with its strategic objectives and capital allocation framework. The company also stated that the funds will be considered as part of its ongoing commitment to enhancing shareholder returns, including through share buybacks.
The transaction is expected to be finalized by Q4 2024.
Kevin Whitaker, CEO of Cala, also commented, saying: “Today’s announcement is excellent news for Cala. The acquisition by Sixth Street Partners and Patron Capital demonstrates confidence in Cala’s business plan and growth potential, as our talented team continues to build high quality, sustainable new homes throughout the UK. L&G has been a great support to Cala throughout its investment and ownership. Since 2013, we have grown revenues and profits five- and ten-fold respectively, and tripled the number of homes we build each year.”
Julian Salisbury, Co-Chief Investment Officer of Sixth Street, added: “Cala has a bright future and we are proud to be entering this new chapter as stewards of a company with such a deep history and long track record of sustainable growth. We, together with Patron Capital, look forward to continuing to support Cala and its management team, not only with capital but also with the significant resources of our London-based real estate investment team led by Giulio Passanisi.”
