Lendlease sells UK construction business to Atlas Holdings for $70m
Embattled property giant Lendlease has wrapped up the sale of its international construction businesses with its UK operation being sold for about $70m.
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Embattled property giant Lendlease has sold its UK construction business to a US-based industrial holding company, which on completion will finalise its exit from its international building operations.
The ASX-listed developer, that announced in May last year it would sell its offshore construction businesses, said it has entered into a binding agreement with Atlas Holdings.
Under the terms of the transaction, Lendlease will receive £35m ($70.75m) cash consideration, including £10m ($10m) deferred until June 2026, subject to completion adjustments.
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.
The net cash outflow as a result of the transaction is anticipated to be about $100m due to the unwinding of negative working capital in the business prior to and at transaction close, and
including the offset from receipt of initial sale proceeds.
The agreement was effective from December 31, 2024, and Lendlease Group chief executive Tony Lombardo said the transaction built on the company’s progress to simplify its operations as it sought to lower its risk profile and increase securityholder returns.
“It also represents a positive outcome for both our people and our valued customers,” he said.
Based in Connecticut, Atlas Holdings started in 2002 and with its affiliates own 26 companies that employ about 50,000 people in 350 manufacturing and distribution facilities across the globe.
The UK sale markets Lendlease’s exit from its international construction operations, well ahead of the targeted 18-month timeline announced at the May 2024 strategy update.
At the time the Group pledged to sell off the bulk of its international development and building businesses and return about $4.5bn of capital to Australia, where it’s staking its future on winning higher-return projects
Soon after Lendlease announced its sell off plan it revealed an agreement to sell its US East Coast construction business to Consigli Building Group. That business included around 45 current, under contract and pre-construction projects in New York and New Jersey. It has also sold an Asian life sciences business into a joint venture.
In August Lendlease reported a $1.5bn annual loss after taking heavy writedowns on its offshore operations.
However, the loss included $1.38bn of impairments and charges on businesses it was selling off. A large component of the loss was a $513m write-off of goodwill, primarily related to its 1999 acquisition of British building firm Bovis Construction, which made up the UK construction business which has been sold.
The company was also hit by the industry-wide slide in property valuations, slashing its holdings by 10 per cent.
Lendlease on Thursday said its earnings guidance for FY25 remained unchanged with group earnings per security of 54c to 62c anticipated.
There will be a heavy skew to the second half of FY25 due to the delay in the completion of its US military housing sale which is now expected to contribute $145m to $160m of operating profit after tax.
Lendlease said its gearing for the first half of FY25 was anticipated to be in the range of 26 per cent to 28 per cent although is expected to trend down significantly in the second half to 5 per cent to 15 per cent.
The sale of its UK construction business is subject to conditions precedent including regulatory approvals, with completion targeted before the end of FY25.
All of Lendlease’s existing UK construction employees will leave the Group as they transfer with the sale, providing a seamless transition for clients, projects and business partners.
Lendlease shares had fallen 1c to $6.22.at 2.58pm (AEDT).
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Originally published as Lendlease sells UK construction business to Atlas Holdings for $70m
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