HBOS-backed social housing firm EPS on block for £30m

HBOS will step up the disposal of its construction assets with the sale of social housing contractor Environmental Property Services, Building understands.

The bank holds a 43% stake in the business through its Uberior investment vehicle, while private equity group Alchemy holds 19% and EPS management 38%.

David Anderson

The £80m-turnover firm is one of only a handful of construction companies to be put up for sale this year and could fetch between £20m and £30m. The sale has been driven by the retirement of shareholders David Anderson (pictured), its chairman, and George Rajendra, the former finance director.

But observers say the move also fits a wider strategy at Lloyds Banking Group, which took over HBOS in January. The bank is trying to sell a portfolio of 50 HBOS assets that includes its stakes in social housing contractors Apollo and Keepmoat. EPS is not part of the same stable and operates under the bank’s joint ventures arm alongside Crest Nicholson and McCarthy & Stone.

The sale process is understood to be at an early stage but sources said one buyer could be private equity firm Sovereign Capital, while trade buyers such as Mears, Connaught, Bouygues and Interserve have been linked with the company.

One private equity source said: “Social housing continues to be a hot area for mergers and acquisitions in an otherwise quiet market for construction.”

In addition to social housing repair and maintenance work, EPS has M&E and security operations. One source close to the sale process said: “It’s a decent enough firm, but some may be put off by the fact it’s not a pure social housing business.”

Despite the reports, Anderson denied there were plans to sell EPS. He said: “We are completely committed to the future of the business.”