Lendlease has announced its binding agreement with Atlas Holdings for the sale of its UK construction business. The binding agreement with the manufacturing and distribution affiliates is the last step in making final Lendlease’s exit in international construction operations.
This comes after the company’s announcement in a strategy update in May 2024. The May announcement projected an 18-months timeline for the exit, but this major event will see fruition way earlier following the announcement today. Under the agreement, Lendlease will receive $70 million cash consideration plus $20 million that is in defer until June 2026. The deferred amount is however subject to completion adjustments. Some of these include regulatory approvals and are to be finalized before the end of the 2025 fiscal year.
The sell to Atlas Holdings follows the recent sale of the company’s US East Coast construction operations. This sell is however not an unwise move as Lendlease will now put more focus and resources in its Australian construction operations, and international investments platform.
Cash hurdles may have been the cause for the sale as it is with most businesses. The international construction company’s business in the UK was running on negative working capital prior to and at close of the sale. This also included the offset from receipt of initial sale proceeds. Wholesomely, the net cash outflow surrounding the transaction will be around $100 million as per official estimates.
What next for Lendlease UK construction team, clients and projects
The UK construction employees are “part of the transfer”, alongside the partners, clients, and projects. Some notable projects Lendlease UK construction company has undertaken include Euston Over-Site development in London, Manchester Town Hall in Manchester, Milan Innovation District in Italy, Paya Lebar Quarter in Singapore and 21 Moorfields in London. These range from residential to urban planning developments, with everything in between – from energy to transport projects. Notable clientele include Transport for London (TfL), Manchester Group (MG), and NHS Calderdale Huddersfield Hospital Trust.
The CEO of Lendlease Group, Tony Lombardo, termed the transaction as a move to “lower our (their) risk profile”, and “increase stakeholder returns”. Lendlease has other arms in itself other than construction. These are: investment management, development, and consulting. These span various industries and economic sectors.
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