Renew disposes of Allenbuild in Â£2.75m deal
Leeds-based engineering services group Renew has disposed of Allenbuild, the new build affordable housing part of its specialist building business.
Allenbuild has been sold to Places for People Group (PFP) for a total sum of £2.75m in cash.
The sale is taking place in two tranches. PFP has acquired 50 per cent of the issued share capital for £1.375m which has been paid in full.
The second tranche - whereby PFP will assume 100 per cent ownership of Allenbuild - will take place after ten outstanding contracts reach practical completion, which is expected to be in approximately 12 months.
During the joint ownership period, Renew will retain the benefit of these ten contracts and PFP will have the benefit of four new contracts and any further new work which Allenbuild subsequently procures.
In its results for the year ended 30 September 2014, Renew will account for the results of Allenbuild as a discontinued business.
The group said the disposal is expected to reduce reported specialist building revenue from continuing operations for the year ended 30 September 2014 by approximately £50m. However, there will be no impact to the expected operating profit from continuing operations.
Debbie Jackson and Graham Mackenzie at law firm Walker Morris advised Renew on the transaction.
"We are delighted to be working with Renew again and this is our third transaction in six months for them," said Jackson. "This highlights the upsurge in deal activity across the market that we have seen in general this year."
Usman B Malik of Grant Thornton Corporate Finance originated and advised Renew on the transaction.