TDR teams up with UK investment firm in £400m housing deal

The investment in Keepmoat will be the fourth deal from TDR's €2bn third fund that closed in March

TDR Capital and UK-based investment firm Sun Capital have teamed up to buy Keepmoat, a UK housing development business, from Lloyds Banking Group.

Financial details were undisclosed, but the two buyout firms will acquire the company for approximately £400 million (€497 million, $643 million), according to a source familiar with the matter.

TDR declined to comment on the deal, which is subject to regulatory clearance, while Sun Capital did not respond to a request for comment at press time.

Lloyds will continue to support the business from a banking perspective, Keepmoat said in a statement. The company’s senior term debt is expected to reduce from £290 million to £260 million; further strengthening the balance sheet.

Keepmoat is a UK provider of affordable housing development and community regeneration services. It builds new homes and public buildings and also looks after maintenance and repairs. With sales of nearly £1 billion Keepmoat employs more than 3,000 people across 22 regional offices. In the year to March 2014, Keepmoat recorded revenues of £930 million, with nearly 2,000 properties sold by its homes division.

TDR has made the investment using capital from its third buyout fund, which closed on €2 billion in March. This will be the fourth deal from that vehicle. In June, TDR acquired IMO Car Warsh, a car wash business for an undisclosed amount. It also invested in Delek Europe, the European energy retail and marketing arm of Delek Group, an Israeli energy company for an undisclosed amount. Last September TDR bought David Lloyd Leisure, a European health club operator in a £750 million acquisition.

TDR, which was established in 2002, focuses on leveraged buyouts in Western Europe with enterprise values between €150 million and €750 million. It has approximately €2.6 billion under management.

Sun Capital is a UK private investment firm. Past investments include PizzaExpress, Phoenix Group, Punch Taverns and Integrated Dental Holdings. Sun Capital Partners has led, managed and invested in transactions worth more than £13 billion, according to its website.