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Countryside is set to build 408 homes in Maghull. Credit: via SEC Newgate
By merging the two housebuilders together, the new combined group aims to achieve a revenue of more than £3bn a year.
Vistry Group is one of the largest private sector providers of affordable housing in the country and has the capacity to build more than 8,000 homes. Vistry Group consists of Bovis Homes, Linden Homes and Vistry Partnerships.
Countryside Group develops mixed-tenure communities and operates several timber-frame modular factories. Countryside’s market capitalisation was £1.14bn as of 2 September.
Both groups are active in the North West. Countryside started work on 377 homes in Blackburn and 408 homes in Maghull earlier this year. Vistry is building 164 homes in St Helens and 98 affordable homes in Langley.
They both also have offices in Warrington. Countryside operates out of Birchwood Park, while Vistry is situated a little over a mile away at Innovation House.
Together, Vistry and Countryside have a land bank of more than 80,000 plots across the United Kingdom.
Vistry spotlit Countryside’s timber frame capability and strong partnership track record as several reasons for the takeover. The takeover took the form of a cash and share offer from Vistry that valued Countryside at £1.25bn. Vistry estimates that the merger will see £50m in cost savings within two years.
“This proposed combination has a highly compelling strategic rationale,” said Vistry chief executive Greg Fitzgerald.
“It will create a leader in the partnerships housing sector, with the scale and expertise to accelerate profitable growth across both partnerships and housebuilding, and expand the delivery of much-needed affordable housing across England,” Fitzgerald continued.
“The proposed combination will add the strength of the Countryside brand to Vistry’s own well-established Bovis Homes and Linden Homes brands and will leverage the skills and market knowledge of both the Countryside and Vistry teams.”
Douglas Hurt, chairman of Countryside, echoed Fitzgerald’s sentiments.
Hurt said: “The combination will create a leading, enlarged partnerships business and is an opportunity to leverage both Countryside’s brand and place-making experience with the growing Vistry partnerships business, alongside Vistry’s established housebuilding business.”
When the takeover completes in the first quarter of 2023, Fitzgerald will take the lead role in the combined company. Ralph Findlay, the non-executive chairman of Vistry, will become the chairman.
Tim Lawlor, the chief financial officer of Countryside, will have the same role in the merged group, with Vistry’s chief financial officer, Earl Sibley, becoming chief operating officer.
Vistry’s Stephen Teagle will be chief executive of the partnerships division, while colleague Keith Carnegie will be chief executive of the housebuilding division.
Should the merger not succeed in generating the desired revenue results by 2025, Vistry and Countryside stated that the two organisations should be able to separate and succeed as independent companies.
Countryside was advised by Rothschild & Co, with Barclays and Numis acting as joint financial advisers and joint corporate brokers. Norton Rose Fulbright was the legal adviser for Countryside.
Vistry was advised by HSBC and Lazard, with Linklaters acting as legal adviser.
On the day of the takeover announcement, Vistry’s stock price had decreased by .41%. Countryside’s share price had increased 5.7%.
Will this mean they become a bit more innovative in their house designs or will we just be seeing more of the same types of cardboard houses copy + pasted onto every green field in the country?
Set to complete by the end of this year, the deal includes 12 convenience store sites in the North West and three in North Wales.
What happens when housing policy goes wrong. Plus: a reminder that Liverpool’s Garden Festival site has been dragging on since 1984.
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