The private equity owners of housebuilder Avant Homes are set to appoint investment bank Moelis to handle a potential £600 million sale, the Standard understands.
The trio of buyout houses — Alchemy Special Opportunities, Angelo Gordon and Avenue Capital — held a beauty parade of bankers including JP Morgan and Rothschild & Co to weigh up strategic options for the builder last month, City sources said.
The firms paid Lloyds Banking Group £175 million for the business, formerly known as Gladedale, in 2014. Ex-boss Remo Dipre embarked on an ill-judged acquisition drive in the lead-up to the financial crisis backed by loans from HBOS. Gladedale changed its name to Avant Homes five years ago.
Avant, which has more than 700 staff, sells homes in Scotland, north-east England, Yorkshire and the Midlands. In the year to April it produced a 40% jump in operating profits to £63.2 million, on revenues of £446.9 million, selling nearly 2000 homes. Its owners aim to double revenues to £1 billion a year, helped by more buoyant house prices away from London and the South-East as well as political initiatives such as the Northern Powerhouse.
But Moelis’s senior banker Mark Aedy takes on the Avant brief at an uncertain time for the housing market. The current travails of the quoted sector leave little appetite for a float, making a trade sale the preferred option — potentially to a builder focused on markets in the South, such as Bovis Homes.
One source said: “The City doesn’t need another listed housebuilder at the moment, but a trade sale is also difficult because this is a very tough time to be doing a major acquisition.” If a trade sale falls through it is understood the PE owners will also look at refinancing their debt.
Avant Homes chief executive Colin Lewis said: “We regularly review our strategic options and financing arrangements.”
