Barratt prepares to buy more land with £91m proceeds of American sale
Barratt Developments has agreed to sell its US housebuilding subsidiary Barratt American to finance growth in the UK. Management buyout firm Barratt Investments paid £91m for Barratt Holdings, which owns Barratt American.
Proceeds from the sale of the £170m-turnover company will be used to acquire more brownfield sites in the UK and reduce gearing.
David Pretty, Chief Executive of Barratt said: "Barratt American is a profitable but relatively small part of our total Group operation. Its disposal in a strong US housing market on terms, which we believe are attractive for our shareholders, will enable greater focus on our core UK operations.
"We are the largest housebuilder in the UK producing 14,000 homes per annum but we only have a 9% market share, so there are significant opportunities for future growth in the UK."
Barratt Investments was formed by Barratt American president Michael Pattinson and two other senior managers, and is being financed by Bank of America and a private equity investor.
Barratt will also 5% of any profit, up to a maximum of $35m, generated by Barratt Investments on the development of a site in San Diego County for which planning permission has not yet been granted.
The transaction is expected to be completed in early September 2004.