Galliford Try is to buy a regional housebuilder for £67m.
The contractor is paying £67m in cash over two years for Chartdale in Lincolnshire. Chartdale is expected to add 1350 plots to Galliford Try's landbank. Most have planning permission.
In a statement to the stock exchange Galliford Try described the acquisition as a financially attractive opportunity that would create a more diverse and balanced landbank within the group.
The integration of Chartdale into Galliford Try will be overseen by the management of Stamford Homes, the eastern counties subsidiary of Galliford Try's housebuilding division. Chartdale will become a regional business within Stamford Homes.
Greg Fitzgerald, Galliford Try's chief executive, said: "This is an exciting opportunity for Galliford Try that we have secured without competition from other housebuilders. It fits our strategy of growing our housebuilding division through expansion in adjacent geographical locations."
Fitzgerald said the acquisition would add to Galliford Try's landbank, making it easier to hit its target of 1250 unit sales a year.
He said: "Chartdale also expands our geographic footprint and further raises the level of awareness of the enlarged business among land owners and agents."
This is an exciting opportunity for Galliford Try. It fits our strategy of growing our housing division
Greg Fitzgerald, Galliford Try chief executive
Chartdale had a turnover of £26.3m for the year ending 31 October, with a pre-tax profit of £14m. The firm operates throughout Lincolnshire, with 80 staff. It was formed in 1986 from a management buyout of Alfred McAlpine's Lincolnshire housing operations, led by current Chartdale managing director, Geoff Dyson.
Galliford Try's results for the six months to 31 December are expected to be announced on 23 February. Its most recent trading update, issued on 5 January, reported that the order book for its construction division stood at £1.1bn, an increase of £380m on the previous year's figure.
Galliford Try also reported that the group had traded in line with expectations in the six-month period to 31 December. The board is confident of a satisfactory out-turn for the financial year ending 30 June.
The Galliford Try and Chartdale deal is conditional on approval at an exceptional meeting on 15 February.
The move is Galliford Try's second acquisition in the past three months, after the purchase of chartered surveyor Pentland. It paid an initial £1.1m for the firm, which specialises in site acquisition and planning services for the mobile communications industry. This may rise to £1.7m, depending on future projects. The firm is being integrated into Galliford Try's design and construction services division for mobile phone infrastructure.