Atlas Holdings, a US firm that also owns cladding contractor Permasteelisa, announced the deal yesterday
Atlas Holdings will acquire Lendlease’s construction business in the deal, including all existing employees and leadership.
Lendlease has owned their construction business for 25 years after buying it from the now-retired Bovis Construction in 1999. They are selling their UK and US companies as the parent company switched to focus on their Australian home market.
Lendlease’s profits have been dropping
According to Companies House, Lendlease’s pre-tax profit had dropped to £11.9m in the financial year to June 2023, a third down from the previous period with turnover down to £509m, or 8%.
This was chalked up to more infrequent bidding in the pandemic, but still had £2.3bn of work at the preferred bidder stage at the end of the year.
Atlas Holdings was established in 2002, and currently owns 26 companies generating £13bn in annual revenue, with companies working in metals, wire and cable, building materials, construction, power generation, industrial machinery and services, and more.
In 2020, Atlas Holdings bought the cladding firm Permasteelisa, taking on jobs including the Google HQ building and Battersea Power Station.
The deal will finalise Lendlease’s exit from the international construction market, well ahead of the 18-month deadline target.
The deal sees a £35m cash consideration for the construction company, with £10m deferred to 2026, subject to completion adjustments. The net cash outflow resulting from the deal and profit outcome is expected to be around $100m (£80,100,000) with the unwinding of negative work capital in the business.
“A long track record of successfully delivering large complex projects”
London jobs being undertaken by Lendlease include 334 Oxford Street, previously the Debenhams flagship store, as well as a new stand for Selhurst Park grounds, home of Crystal Palace, and the Google Headquarters at King’s Cross. Bidding is also underway for a towerblock at 18 Blackfriars.
The announcement of the deal reads: “Lendlease and Atlas Holdings today (1 January) announced they have entered into a binding agreement for the sale of Lendlease’s UK Construction business.
“Completion of the transaction is subject to conditions precedent including regulatory approvals, with completion targeted before the end of the Australian financial year in June 2025. Key contract terms remain commercial in confidence until completion of the deal.”
Tony Lombardo, group chief executive of Lendlease, said: “This transaction builds on our progress to simplify Lendlease as we look to lower our risk profile and increase securityholder returns.”
Peter Bacon, Atlas operating partner, said: “We are excited to acquire one of the UK’s leading construction companies, which has a long track record of successfully delivering large complex projects for both private and public sector clients. We look forward to working with [UK managing director] David Cadiot and his team continuing to build the business.”
Lendlease’s earning guidance for the financial year 2025 is expected to be relatively unchanged, with the military housing deal expected to contribute a large chunk in the second half in OPAT, roughly worth $145-160m.
