Edinburgh-based residential development company Sigma Capital has accepted an offer from property private equity firm PineBridge Benson Elliot which values the group of £188.4m.
A statement explained that during late 2020, in light of the progress Sigma had made during the year, its directors decided to review their strategic options.
They appointed Rothschild & Co to run a private sale process, which attracted participation from multiple parties.
In order to deliver its next phase of growth, Sigma stated that it requires consistent access to capital to invest in scale into UK private rented property sector, growing through forming new house builder partnerships and expanding operations into new regional markets.
The directors believe the acquisition will accelerate Sigma’s business at a rate, “which would be otherwise difficult to achieve” as a standalone AIM-listed company.
PineBridge Benson Elliot stated that it believes that Sigma is a “market-leading, vertically-integrated private rented sector delivery and operating platform”, which benefits from a leading position in the rapidly growing UK single-family rental market.
Having delivered around 5,400 homes to date, Sigma’s platform recently entered into new long-term partnerships with housebuilder delivery partners and end investors in the UK, with expansion plans to deploy further capital towards new opportunities.
Over its history, PineBridge Benson Elliot has built a track record of acquiring and scaling real estate investments in Europe, in partnership with management teams.
The acquiring company is set to buy 54,694,121 Sigma shares, representing approximately 61% of its existing issued share capital. The deal is expected to conclude during the third quarter.
Graham Barnet, chief executive and founder of Sigma, said: “We know the team well and believe that our complementary skills, experience and sector knowledge, as well as PineBridge Benson Elliot’s capital backing, will make a powerful combination, and enable Sigma to expand its activities significantly. “
David Sigsworth, senior independent non-executive director of Sigma, said: “Following a competitive sale process initiated by the company in line with its strategic growth plans, which attracted strong interest from multiple well-funded parties, the independent Sigma directors believe the cash offer of 202.1 pence per share is highly attractive and in the interests of all Sigma shareholders.
“The offer presents an opportunity for Sigma Shareholders to crystallise a meaningful premium today to various share price based metrics and the directors intend to recommend the offer unanimously.”
Joseph De Leo, managing partner of PineBridge Benson Elliot, said: “Having spent the last number of months growing our understanding of the Company’s many strengths and its strategic priorities as it strives to unlock its potential, we believe that the combination of our capital backing; strategic support; deep expertise; and track record can be an effective catalyst for achieving Sigma’s growth ambitions over the coming years.”
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