By Scott Wright

MACTAGGART & Mickel has exited the housebuilding business nearly a century after the renowned Scottish company was established.

The Glasgow-headquartered company, which was founded in 1925, has sold its housebuilding operation to the acquisitive Springfield Properties in a deal worth £46.3 million.

It is the latest in a series of deals to be completed by Elgin-based Springfield, which floated on the stock market in 2017, in recent years that have allowed the housebuilder to break out of its Highlands heartland and move into central Scotland. These have included the acquisitions of Glasgow-based Dawn Homes and Livingston’s Walker Group in 2019, though prior to the Mactaggart & Mickel swoop its most recent deal was the purchase of fellow Highland housebuilder Tulloch Homes in December.

The move frees Mactaggart & Mickel, which forged its name building homes over many years in the west of Scotland, to focus on land investment and to develop its presence in the private rented sector. It has agreed a strategic alliance with Springfield that will give the Highland company the opportunity to buy further sites from Mactaggart & Mickel land across Scotland, which spans 2,300 acres.

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Springfield’s acquisition of Mactaggart & Mickel’s housebuilding business will see it take over six live private and affordable housing sites with work in progress, with a fair value of approximately £15m and fixed assets. It also secured a brand licence to build homes as Mactaggart & Mickel on a further 11 private and affordable sites.

Around 700 homes will be built across the 17 sites, for which 16 already have planning permission.

Springfield has acquired Mactaggart & Mickel’s timber frame factory in the west of Scotland as part of the deal, which will boost the production capacity currently provided by its existing timber factory in Elgin. The company noted that it will now be able to manufacture all the timber frames it needs off-site at its own factories.

Springfield will pay an initial £10.5 million on completion of the deal, while a deferred cash consideration of £35.8m will be paid proportionally as homes are sold over the next five years. It will fund the deal from existing cash and debt facilities.

Further to completion, 113 employees of Mactaggart & Mickel, known locally as Mac Mic, will transfer to Springfield. These include staff at the housebuilding business who will be based in Glasgow city centre, and at the timber kit factory in Bellshill.

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But there will be a significant change at Mac Mic. Long-serving chief executive Ed Monaghan, who has worked for the company for more than 40 years, will step down in October. He will be replaced by Paul McAninch, who has been group finance director for the last seven years.

Innes Smith, chief executive of Springfield, said the acquisition came after he and Mr Monaghan met by chance at the NHBC Awards in London earlier this year.

Mr Smith told The Herald: “In all the acquisitions we have made we look at the company first. Its reputation and its history. With Mactaggart and Mickel we have a company with 100 years history of building excellent homes in the central belt. This is backed up by its five star builder rating, which they have achieved from NHBC 10 years in a row, and also numerous housebuilder of the year awards.

"Customers speak very highly of them. The staff too are of high calibre and have demonstrated strong performance, they seem like a nice crowd. There are strong synergies between both companies, and our visions and cultures naturally align.”

He added: “Mactaggart and Mickel’s offering complements our existing business structure and Scottish presence very well, allowing us to expand our focus across the central belt, and particularly in the Glasgow and Edinburgh areas.”

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Asked if he had any concerns about the impact rising interest rates and the increasing cost of living could have on the housing market, Mr Smith replied: “The housing market has strong fundamentals, the housing deficit remains and there will always be demand for good quality homes. If there are challenges ahead then the pay-as-you-go structure of this deal, with payments made to Mactaggart and Mickel as homes are sold, will allow us to manage that. We believe our plans are robust for the future and we are definitely well positioned to continue our growth.

“The rising costs of living, particularly increased costs of running a home, demonstrate how important the supply of good quality, energy-efficient homes is and we are working hard to maintain margins and build a greener product that will be cheaper for our customers to run.”

Mr McAninch said the deal “enables us to focus on our future investment strategy, which has served the group well in recent years.”

He added: “This will also enable us to enhance our private rented sector portfolio, expand our strategic land ambitions and provide a platform for future joint venture interests.

“This stands us in good stead as we head into our second century in business.”