Confidence in the housebuilding sector today received a further boost after CALA was sold for £210 million.
The Edinburgh-based firm, which builds around 875 homes a year with an average selling price of £340,000, was sold by Lloyds Banking Group to insurer Legal & General and private equity firm Patron.
CALA's sale follows the recent successful £600 million flotation of housebuilder Crest Nicholson and a raft of positive trading updates from the sector.
The company added that its trading performance so far this year has been "exceptionally strong".
It returned to profit one year ahead of schedule in 2011, having been loss-making since 2008, and recently announced a six-fold increase in profitability to £11.4 million for the year to June 30.
Chief executive Alan Brown called the deal, made up of £140 million of equity and £70 million of debt, a significant step forward for the company.
He added: "Having invested heavily in growing our land bank since 2010, we are now very well positioned to grow the business significantly over the next five years."
Lloyds Banking Group, which took control of CALA in a debt-for-equity swap in 2009, will continue to support the business with a new £100 million five-year banking facility.
Existing senior management will hold a 7% stake following the deal, with L&G and Patron each taking 46.5%.
The acquisition is part of L&G's strategy to target socially useful projects, such as housing, education, transport and energy sectors, that deliver high rates of return and fit its financial and strategic criteria.
CALA, which stands for City of Aberdeen of Land Association, has a land bank of 9,900 owned and contracted plots with a potential gross development value of £3.1 billion.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article