Bowey changes hands in significant deal for region

Sep 14 2006 North East Vision

Leading North-East builder Bowey Homes changed hands last month in one of the region's most significant deals.

The £31m sale, to Irish housebuilding group McInerney Holdings, brings to an end the Bowey family's 100-year-old ownership of the company.

Former Bowey Homes chairman Ron Bowey said: "Over the years we have had a lot of approaches from companies interested in buying us, but this intensified over the last two years with us being approached by a significant number of parties.

"This was particularly the case after Yuill Homes were sold to Irish company Taggart Holdings. The housing sector is consolidating with big players very much endeavouring to increase market share.

"This interest, as well as the desire by some shareholders to retire or exit from the business, prompted the wish to sell."

Formal sale proceedings began in November 2005 with a beauty parade which resulted in the selection as advisers of lawyers Robert Muckle and corporate finance accountants KPMG.

Robert Muckle has had a long relationship with Bowey Homes, having advised the company nearly 10 years ago on the formation of Bowey PFI - a joint venture to run the facilities for Northumbria Police's mounted section - and on a programme of rationalisation, disposing of non-core activities.

Three years ago Robert Muckle also advised the company on buying out the venture capitalist, investor 3i, prior to helping the group restructure in preparation for an eventual disposal.

By April of this year Robert Muckle, along with KPMG, had generated significant interest from potential buyers across the British Isles.

Robert Phillips, Head of Commercial Group at Robert Muckle, said: "We had to look at a number of expressions of interest and decide which represented best value for the shareholders, which represented the best future for Bowey Homes, and which of the potential buyers were most serious about doing the deal."

As part of that process, Robert Muckle prepared and hosted a data room in their Newcastle offices to provide potential buyers with detailed commercial and legal information.

Then, after McInerney were given exclusivity, the deal was completed in two months. Ron Bowey said: "The process was intense because of the high level of interest. This meant we had to present to a lot of people, but then, once that process was complete, the whole thing went very much according to plan.

"Robert Muckle were excellent. We chose them because we have worked with them in the past on a number of transactions and find them very easy to deal with, with a very commercial approach, which is all about getting the deal done."

"The deal was a genuine win-win for everyone," said Robert Phillips.

"An important consideration for the shareholders was to try to find someone who would preserve the current management team they had spent considerable time building up.

McInerney were looking to bolster their management structure within the North-East region so were prepared to buy not just the company assets but also the human expertise."

Ron Bowey concluded: "Another feature of the deal was the way Robert Muckle's team worked so well with KPMG, working together to ensure we found a suitable buyer, in this case one whose ambition to compete with the region's housebuilding heavyweights bodes well for the future of the business."