Rok buy out of social housing contractor comes in time to avoid capital gains tax hike

Rok has bought north of England social housing contractor Richardson Projects for up to £40.5m in cash and shares, as tipped by Building last week.

Ahead of changes to Capital Gains Tax laws, which introduce a flat rate of 18% on chargeable gains after the 6 April, the deal will see an initial payment of £22.5m, of which £20.5 will be paid in cash and the rest in shares.

A further maximum of £18m will be paid over the next two years after the sell-off of Richardson’s private housing division.

Rok chief executive Garvis Snook said: “Richardson's team with its substantial pool of skilled trades people, will extend our service to the social housing market.”

Richardson has offices in Rochdale and Leeds and employs 350 staff. In the year to 31 August 2007, it made a pre-tax profit of £4.2m and had gross assets of £24.2m.

Founder and chairman Alan Richardson will remain with the business for a minimum of six months to oversee the transition and other senior managers have signed have new two-year minimum deals.