Lendlease to be bought by US private equity giant

The US private equity firm that owns cladding contractor Permasteelisa is set to buy Lendlease’s UK construction business, the company has said.

In an announcement made overnight on the Sydney stock exchange, Lendlease said: “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.”

The deal will see Atlas, which bought Permasteelisa in 2020, acquire Lendlease’s construction business and its operations including existing employees and leadership team.

Atlas will pay £35m for the business, £10m of which will be deferred until June next year. It added: “The profit outcome is expected to be broadly neutral after providing for retained risks in relation to projects that have completed or substantially completed prior to exchange of the sale agreement.”

Lendlease group chief executive Tony Lombardo 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.”

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The news will bring to an end Lendlease’s 25 year ownership of the business which saw it pay £285m for the then Bovis Construction in 1999.

Lendlease put the business up for sale in May last year after its Australian parent decided to concentrate on its home market.

In its last set of results filed at Companies House, Lendlease’s pre-tax profit slipped a third to £11.9m in the year to June 2023 on turnover down 8% to £509m. It said the fall in income was due to bidding less schemes over the covid-19 period but added that at its year-end it had £2.3bn of work at the preferred bidder stage.

Atlas, which was set up in 2002 and is based in Greenwich, Connecticut, has 26 companies in its roster which generate $16bn (£13bn) in annual revenues.

Its businesses include those working in metals, wire and cable, automotive supply, building materials, construction, power generation, food production, industrial machinery and services, packaging, printing, pulp, paper and tissue.

Lendlease’s ongoing jobs include a mixed-use scheme at 334 Oxford Street, the former flagship of Debenhams, a job to build a new stand at Crystal Palace’s Selhurst Park ground and the Google headquarters building at King’s Cross. It is also one of two firms bidding a huge tower scheme at 18 Blackfriars in London.