PE-backed Keepmoat sells regeneration division to Engie for £330m

The partial exit comes two and a half years after the GPs acquired Keepmoat from Lloyds Banking Group in a deal reportedly giving the business an enterprise value of £400m.

Following the sale of the division, the management team of Keepmoat's homes division will remain in their roles and will continue to be led by managing director Peter Hindley. Keepmoat chief executive Dave Sheridan will join Engie, alongside the 2,500 employees who currently work in the regeneration division.

According to a statement issued by the selling company, Keepmoat's homes division has doubled in size since the GPs' initial investment in the group. The business intends to build more than 3,500 homes in the next financial year.

According to publicly available documents, the group as a whole has increased its turnover from £930m to £1.13bn under the PE backers' tenure.

The sale of the regeneration division is expected to complete in the coming months, following the granting of anti-trust clearance.

The acquisition by the trade buyer is intended to capitalise on the increased focus on energy efficiency within the building sector.

Previous funding
Bank of Scotland Integrated Finance (BOSIF) provided Keepmoat with an integrated debt and equity package in 2007 to support its £783m MBO – a deal that represented Yorkshire's largest ever buyout.

Subsequently, Lloyds took over from BOSIF as a result of the UK government's bank bailout packages during the financial crisis. The group then acquired a stake in the business in a debt-for-equity swap during a 2012 refinancing.

TDR and Sun then acquired Keepmoat from Lloyds in September 2014. Following the deal, Keepmoat's debt was reduced from £290m to £260m, with Lloyds continuing to provide banking services to the company.

Company
Headquartered in Doncaster and founded in 1983, Keepmoat is a homebuilder and provider of home maintenance and repairs services. The group, incorporating both the homes and regeneration divisions, generated a turnover of £1.13bn with adjusted EBITDA of £66.7m in the year ending March 2016, according to publicly available documents.

The homes division generated a turnover of £337m in the year to March 2016, according to publicly available documents, up from £262m in the previous financial year. The documents also reveal the division generated £26.7m in operating profit before exceptional items.

Keepmoat's regeneration business has a turnover of £800m, according to a statement issued by the trade buyer. Publicly available documents reveal the division generated £38.2m in operating profits before exceptional items and amortisation of intangibles in the year ending March 2016.

People
Sun Capital – Edward Hawkes (partner).
TDR Capital – Stephen Robertson (founding partner).
Keepmoat – Peter Hindley (managing director).
Engie – Isabelle Kocher, Wilfrid Petrie (CEOs).

Advisers
Vendor – Kirkland & Ellis, David Holdsworth, Timothy Lowe, Tom Bartram, Anne Stroude, Cian O’Connor, Paula Riedel, Mike Robert-Smith (legal, tax).

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• Topics
• Exits
• UK / Ireland
• Industrials
• United Kingdom
• TDR Capital
• Sun Capital
• Partial sale