The Newcastle-headquartered Grainger plc has agreed terms to sell its interest in the New Sovereign Reversions Limited (Sovereign) portfolio, a business which owns and manages UK equity release plans, for £18.5m.
The property company said would it be selling its 50% stake in the portfolio - a joint venture with Moorfield Real Estate Fund II - to an affiliate of the private equity group, Lone Star Funds.
Grainger will receive a total cash consideration of around £18.5m, subject to completion adjustments for its interest in the portfolio, representing an anticipated pre-tax profit of roughly £4.5m and post-tax profit of £3.6m, which will be treated as a non-recurring item.
At March 31, 2015, the Sovereign portfolio comprised 767 properties primarily subject to home reversion plans, located throughout the UK.
The transaction is expected to complete by May 29, 2015, and FCA approvals for change of control have already been received.
Grainger chief executive Andrew Cunningham said: “We are pleased to announce today’s sale which was a compelling opportunity to realise an attractive return on our investment and support our JV partner’s wider strategic activity.”
Established in Newcastle in 1912, Grainger now has around £3.2bn of residential assets under management, making it the UK’s largest listed residential property owner and manager.