LONDON Housebuilder Taylor Wimpey has sold its North American business to a group of private equity firms for $955 million (592 million pounds), in a long-awaited deal that will help it cut debt and focus on its UK business.
"The sale is a significant step towards our goal of becoming a UK-focussed homebuilder," Chief Executive Pete Redfern said on Thursday.
"The sale will provide us with a strengthened balance sheet and increased financial capacity to invest in the UK and to pursue our strategic aims of focussing on margin growth."
Shares in the company, which have risen 45 percent in the last six months, gained 2.7 percent to 42.4 pence by 9:10 a.m.
"We believe this deal will be taken well -- post completion, the group is predominantly a UK-focussed housebuilder with a strengthened balance sheet," said Arbuthnot analyst Kate Moy, noting the company retains underperforming assets in Spain.
Taylor Wimpey enjoyed a good start to the spring house-selling season, Redfern told reporters in a conference call, and could use some of the sale proceeds to add to its portfolio of land.
"Our prices are a little bit higher than they were three months ago," he said.
"Given the economic uncertainty that's around, we're pretty pleased with the way the UK market has performed in the first quarter of this year."
Proceeds from the North American sale would mainly be used to reduce Taylor Wimpey's borrowings, said Redfern, adding some 30 million pounds ($48 million) would be allocated to cutting its pension deficit with some capital left for land purchases.
"The balance, we have no immediate short-term plans for, but it does give us the opportunity if there are good quality land opportunities in the UK to participate more fully," Redfern said.
Britain's third-largest homebuilder by value said the sale price of its North American unit represented a premium of 3.4 percent to net asset value, and was at the top end of the range it had targeted.
The well-flagged and competitive sale process saw the company dispose of Taylor Woodrow Holdings (USA) Inc. and Taylor Wimpey Holdings of Canada.
The buyer, TMM Holdings, is a partnership controlled by investment funds affiliated with TPG Capital, Oaktree Capital Management and JH Investments and its subsidiaries.
Reuters reported in February that Canada's largest homebuilder Mattamy Homes, which is privately held, and No. 9 U.S. builder Meritage Homes Corp, submitted bids for Taylor Wimpey's North American business.
(Editing by Mark Potter and David Hulmes)
Our top photos from the last 24 hours.