Springfield agrees £20m acquisition of Glasgow’s Dawn

● Dawn Homes snapped up in cash-andshares bid from listed housebuilder

Springfield Properties, the fast-growing Scottish housebuilder that floated on the stock market last autumn, has swooped to buy Glasgowbased Dawn Homes for up to £20.1 million.

Springfield, which is quoted on the Alternative Investment Market, also announced a placing of shares with new and existing institutional shareholders to raise £15m as part of the transaction.

The group will pay £17.6m in cash and shares upfront, and a possible additional £2.5m in cash dependent on Springfield receiving zoning on Dawn Homes’ site at Johnstone, near Glasgow.

The acquirer said that the deal would accelerate its growth and “expand the company’s private landbank in west central Scotland and Ayrshire in line with stated strategy to expand into new regions”.

Sandy Adam, executive chairman of Springfield and grandson of the firm’s founder Wilfred Adam, said he first approached Dawn Homes to ask if it might be for sale last January, and detailed talks in the past month had gone “very smoothly”.

He added: “This was a rare opportunity to acquire a profitable company that builds great homes. Dawn Homes is a well-run business with an excellent reputation in Western Central Scotland.

“I am delighted that they are joining our team and welcome all their employees into our company. There is a massive need for more housing in Scotland and Springfield will play a significant part in addressing that need.

“We will be supporting the skilled Dawn Homes team to build more homes each year. Overall, this acquisition will enable Springfield to grow and deliver housing more widely across Scotland.”

The deal is expected to be “significantly earnings enhancing in its first full year”, Springfield added. Dawn Homes sold 87 houses in the year to end-january 2018 at an average selling price of £220,000. It has 49 employees, compared with 520 at Springfield.

Innes Smith, Springfield’s chief executive, told The Scotsman: “We have been weak in the past in the Glasgow area. (An acquisition) is a far easier methodology of getting into an area, with a ready-made company and workforce.”

He added that there would be no redundancies resulting from the acquisition, “just opportunities”.

Adam said the stock market listing had given Springfield “greater scope to do things. We have another currency, our shares. We will bed this one down first but if other (acquisition) opportunities came along it would be wrong to ignore them.”

Springfield is placing 12.5 million shares at 120p per share, a 3.2 per cent discount to the closing price on 1 May.

The shares closed up 8 per cent at 134p, compared with a flotation price of 106p. In February, in its maiden results as a public company, Springfield announced profits up 19 per cent at £3.1m.