Apollo in £1.2bn deal to buy UK housebuilder from Bridgepoint

Apollo Global Management has struck a deal to buy housebuilder Miller Homes for more than £1bn as the private equity investor aims to increase its exposure to the UK’s booming housing market.

Funds managed by Apollo affiliates will take control of the company from British buyout group Bridgepoint, which recently listed on the London Stock Exchange, with the deal expected to complete early next year.

Apollo will pay in excess of £1.2bn for the company, according to two people familiar with the deal,

Miller Homes, a midsized developer that builds about 4,000 homes a year in England and Scotland, has benefited from an unexpected boom in the UK housing market over the past 18 months.

Sales and house prices have surged on the back of changing buyer preferences, record-low interest rates and government stimulus measures after initial fears that the coronavirus pandemic could slow the market or even precipitate a crash failed to materialise.

According to housing market analysts, the increase in homeworking in the pandemic, which is expected to remain elevated even as offices reopen, has prompted buyers to look for homes with more space, enabling them to look further afield from city-centre workplaces.

“Miller Homes has a strong presence in suburban locations that continue to see strong consumer demand, and we look forward to working alongside the talented management team to execute on their growth strategy,” said Alex Humphreys, a partner at Apollo, which posted record profits in the third quarter of this year thanks in part to the buoyancy of US stocks.

Chris Endsor, chief executive of Miller Homes, said the deal would enable the company to continue its “recent strong momentum” and pointed to Apollo’s “deep housing expertise, with a global platform, extensive resources and capital to create value for all stakeholders”.

The US investor agreed to take New York-listed housebuilder The New Home Company private in a $338m deal earlier this year and is investing in UK mortgage lender Foundation Home Loans.

Private equity groups have been deploying some of the record levels of cash they have built up over the past year, including spending $42bn buying companies from their own portfolios.

Bridgepoint, which acquired Miller Homes in 2017, was advised by Rothschild and Co and Moelis & Company on the Miller Homes deal. Barclays and HSBC advised Apollo.