Lendlease, an Australian construction company, has signed a binding agreement with Atlas Holdings, an industrial holding company, to divest its UK construction business, effective 31 December 2024.
This marks Lendlease's complete exit from its international construction operations, ahead of the 18-month timeline announced in May 2024.
The sale speeds up Lendlease's efforts to simplify the group and focus on expanding its Australian operations and international investments platform, following the recent sale of its US East Coast construction operations.
As per the transaction terms, Lendlease will get £35m ($70m) in cash consideration, including £10m deferred until June next year, subject to completion adjustments.
The profit outcome is expected to be broadly neutral after accounting for retained risks related to completed or substantially completed projects before the exchange of sale deal.
The net cash outflow from the transaction is anticipated to be approximately $100m due to the unwind of negative working capital before and at transaction completion, including the offset from initial sale proceeds.
The transaction is subject to conditions, including regulatory approvals, with completion targeted before the end of fiscal year 2025 (FY25).
Lendlease Group chief executive officer Tony Lombardo said: “This transaction builds on our progress to simplify Lendlease as we look to lower our risk profile and increase securityholder returns. It also represents a positive outcome for both our people and our valued customers.”
Lendlease's existing UK construction employees will transition with the sale, ensuring a seamless transition for clients, projects, and business partners.
In September 2024, Consigli Building Group finalised the acquisition of portions of Lendlease’s construction operations in New York City and New Jersey, US, which included a portfolio of projects valued at more than $1.8bn.
Lendlease's FY25 earnings guidance remains unchanged, with group earnings per security expected between 54¢ and 62¢.
A significant contribution is anticipated in the second half of FY25 because of the delay in the Military Housing sale, now expected to generate $145-$160m of operating profit after tax.
