Thursday 10th April 2008
Bank of Scotland Corporate's Joint Ventures business has acquired a 40 per cent stake in Tulloch Homes Group in a deal worth £27.5 million.
Following the transaction, chairman and chief executive David Sutherland will remain Tulloch's largest shareholder with a 43 per cent shareholding. The deal represents a significant development in Tulloch's history, with Sutherland securing a major financial institution in Bank of Scotland as a shareholder to support the Group's future growth aspirations.
Established in 1925, Inverness-based Tulloch Homes Group has become one of the most experienced and respected names in the Scottish homebuilding industry. The Group operates three principal brands through its housebuilding division: Tulloch Homes, Tulloch Homes Express and Argyll Homes. Tulloch Homes Express focuses on the social housing market which is closely aligned with the current Government priority initiative to increase housing affordability in Scotland.
In 2007, Tulloch made three major acquisitions – Castleglen Properties Ltd, Aviemore & Highland Developments Ltd and Cameron & Paterson Holdings Ltd – providing the Group with a strong landbank in the North of Scotland.
The transaction has enabled Bank of Scotland Corporate's Joint Ventures division to invest in a UK region where the market is expected to outperform the national average. The Scottish housing market outlook is still considered to be strong, having outperformed the UK market over the past four years and with Halifax forecasting 2008 House Price Inflation at 4%.
Sutherland said: "This is an excellent move for Tulloch Homes Group and I am delighted that our bankers of more than 20 years have decided to invest in our future.
"We currently have a significant landbank at current volumes of five years across Scotland and this investment by Bank of Scotland will give us the opportunity to grow our business even further.
"We have built Tulloch from small beginnings in the north of Scotland to the size it is today and I look forward to working closely with Bank of Scotland over the coming years as we continue to build our housing across the north of Scotland, Aberdeenshire, the Central Belt and the islands."
Commenting on the transaction, Gordon More, head of joint ventures transactions at Bank of Scotland Corporate said: "This is a fantastic opportunity for Bank of Scotland to partner with a highly valued customer with a good track record and reputation in the Scottish housing market, particularly in the North of Scotland where it has strong land buying credentials.
"The deal also fits perfectly with our ambition to invest in the North of Scotland housing market, which we see as having strong growth potential over the coming years. We're looking forward to working alongside David and his team as they attempt to step up their business to the next level. "
Notes for Editors:
Bank of Scotland Corporate,part of HBOS plc, has a reputation for excellence in the provision of corporate finance, delivering innovative funding solutions across a range of markets. With experience across many areas of corporate finance, including specialist teams covering Real Estate, Joint Ventures, Integrated Finance, Structured Property Finance, Infrastructure Finance and Housing Finance, Bank of Scotland can draw on an expert pool of professionals with proven track records. Bank of Scotland provides funding to more Management Buy-Outs than any other bank in both the UK and Europe and is now recognised as the top UK arranger for PFI/PPP deals. Bank of Scotland Corporate employs around 9,000 employees. Total lending at December 2007 stood at £109.3 billion.
Tulloch Homes Groupbuilds homes across the UK, ranging in price from £130,000 to £500,000. The company employs 300, predominantly in Scotland.
In its 2006 Annual Report and Strategic Review, published in June 2007, results for the year showed the group's pre-tax profits increasing to £33.6 million (2005: £11.2 million). The significant rise in pre-tax profits was due to the disposal of the Group's construction, civils, services and insulation businesses in 2006. Operating profits increased to £13.2 million, up from £12.5 million in 2005. Group turnover was £153.5m and sales from continuing operations rose to £67m from £49.2m the year previously.
Tulloch Construction – Tulloch's construction and civil engineering business – was sold to Rok plc in 2006 and was recently rebranded as Rok Construction. Tulloch Homes Group is the largest private shareholder in Rok plc.
