Redrow housebuilder sells to Elgin firm, Springfield
The housebuilder, Redrow, has sold its loss-making Scottish operation to the Elgin firm, Springfield Properties.
The total deal is worth £49m which consists of £5m in cash up front and £44m to be paid as developments are sold over the next three years.
The Elgin-based company will take over Redrow's Scottish head office, its sites and 60 staff.
Redrow said it was selling its Scottish division because its performance was not "acceptable".
In the year to the end of June 2010, it made a loss of £1.7m on a turnover of £31m.
The Scottish business consists of eight sites at Anniesland, Braehead, Dalkeith, Dunfermline, Inverkip, Kilwinning, Lenzie, and Motherwell - which have the potential for over 800 new homes.
Springfield said the deal would give it the opportunity to grow "from its current position to a company with a £100m-a-year turnover within the next five years".
The Elgin developer has already started to expand across the central belt. The Redrow deal will give it a total of 30 sites across Scotland and the ability to build about 500 new homes per year.
Although Springfield will use Redrow's Scottish headquarters as a central Scotland base it will continue to be controlled from Elgin.
The company said careful and prudent management had helped "steer it through the difficult economic situation" and it was the right time to expand.
Sandy Adam, chairman of Springfield Properties, said: "Last year we began that process by assembling new sites and strengthening our senior management team. Prior to this deal we have added 1,500 development sites to our portfolio in 2011 and post the deal we're still in the market for land and sites.
He added: "When Redrow announced its intention to sell its Scottish business, we saw a major opportunity to consolidate this growth."
Springfield was set up in the 1950s and is a family-led company.