FINANCE: Scottish house builder Miller Homes has announced its intention to raise £140m through an initial public offering.
The group, which is part-owned by Blackstone and Royal Bank of Scotland, will use the proceeds of the offer to pay down debt and expand its business.
The offer by the Edinburgh-based group comprises an issue of new shares and sale of existing shares by the company’s major shareholder, Grain Holdco.
Miller Homes recapitalised in 2012, around two years after its listed competitors undertook similar recapitalisations.
It now has a “clear strategy” to increase margin and return on capital employed by improving the quality of its land bank and product mix.
As at 30 June it had a strategic land bank of 16,553 plots on 56 separate sites held under options with an estimated gross development value of £3.7bn, which represents 8.9 years of supply.
Some 24% of the strategic land bank was located in the Midlands, 45% in the South of England, 25% in the North of England and 6% in Scotland.
Barclays Bank and Jefferies International Limited are joint sponsors, joint global co-ordinators and joint bookrunners.
HSBC Bank is acting as lead manager. Moelis & Company UK is acting as financial adviser.
Miller Homes chief executive Chris Endsor said: “Our distinctive focus and deep knowledge of the regions in which we operate, together with our large and well-located strategic land bank, position Miller Homes to drive strong and sustainable growth and to benefit from the continued recovery in these regional markets.
“It is an excellent time to be operating in the house building sector, with demand for new housing continuing to grow, supported by improving macroeconomic conditions and mortgage market and a more favourable planning environment.
“We are proud of what we have achieved so far and look forward to developing our business and creating value for our new stakeholders as a publicly listed company.”
?Miller Homes’ new chairman, Tony Rice, said: “I am delighted to have been appointed at such an exciting time in the company’s development. Miller Homes is well positioned to take advantage of the opportunities for growth and the creation of shareholder value in the future.”
bridget.oconnell@estatesgazette.com
