City of London Group has conditionally agreed to buy equity release provider Milton Homes from a Delancey-advised fund for £20.2m.
The reverse takeover from DV4 will comprise £13.2m in new ordinary shares in COLG and £7m in cash.
COLG has also proposed to raise £11m through equity fundraising.
Milton Homes has a UK residential property portfolio of 586 properties with a market value of £77m.
It has plans to start acquiring additional homes for equity release, with an expected £15m invested in the first year, reaching a total of £100m over a five-year period.
COLG said the acquisition will allow the company to develop its financing business, with the additional balance sheet strength giving it access to a wider range of funding.
Following the acquisition, DV4 will continue as the majority shareholder, holding 51% of the share capital.
Colin Wagman, deputy chairman of Delancey and chairman of Milton Homes, said: “This acquisition is very positive for all of the parties.
“Milton Homes now has the opportunity to advance its business prospects with access to a wider pool of capital and to provide it with more profile to enable it to expand its equity release products.”
To send feedback, e-mail karl.tomusk@egi.co.uk or tweet @ktomusk or @estatesgazette
