Bridgepoint has agreed to acquire UK housebuilder Miller Homes from GSO Capital Partners in a deal worth £655 million. The company generated revenues of £565 million and operating profit of £103 million in 2016—increases of 13% and 31%, respectively, on the previous year.
The deal, if completed this year, would be the largest PE investment in European construction and engineering in 2017, according to the PitchBook Platform. Yet the larger picture suggests that private capital is increasingly sitting on the sidelines. Deal numbers
have slid each year since 2014, per PitchBook data. However, with reported housing supply shortages across the continent and an increasing need to update some of Europe’s ailing infrastructure, it is possible a rebound could be on the cards as demand rises for bricks and mortar.
Completed PE deals in European construction and engineering
Looking at UK housing in particular, the prospects for growth in the sector could indicate the reason behind Bridgepoint’s move. The government is assessing how to tackle the country’s housing shortage, with one option considered being the allowance of new projects on historically protected (so called ‘green belt’) land, which in turn could lead to a building boom.
The Eurozone economy meanwhile confirmed its robust expansion so far this year, with preliminary data suggesting it grew twice as much as Britain for the second consecutive quarter. This has led to speculation that the construction sector in Southern and Eastern Europe might be moving from recovery—following the collapse after the 2008 financial crisis—and finally turn to expansion mode. Indeed, a report by industry forecaster Euroconstruct highlights countries such as Spain, Hungary and Portugal as some that can expect a building boom in the coming two years.