Heijmans acquires British company Denne Construction (NL/UK)

Heijmans NV has acquired the British company Denne Construction Ltd. Denne Construction is primarily active in housing construction and operates in the southeast of England. The acquisition augments the existing activities of Heijmans' British subsidiary J.B. Leadbitter Ltd and forms part of the strategy to expand operations in England.

Denne Construction
Denne Construction is active in the field of subsidised housing, the education sector and the healthcare sector. The construction firm's activities encompass both new developments and renovation projects. Denne Construction has acquired extensive experience in the British subsidised housing market, having now been active in it for over thirty years. The company also operates in the industrial and commercial property sectors.

Denne Construction is active in southeast England, especially in the area southeast of London and the Thames Gateway region. Spanning both sides of the River Thames to the east of East London, the Gateway has been given priority status by the British government for restructuring as an urban residential area.
The company is based in Borden, Kent, and has 136 employees. The yearly turnover is approx. €75 million. Leadbitter's turnover for 2005 amounted to €227 million with 391 employees. Heijmans is paying a maximum of €25.5 million for the Denne Construction shares, with up to €9 million dependent upon future profit increases. It is expected that the acquisition of Denne Construction will contribute approx. €0.05 to the profit per share of Heijmans in 2007.

Strategy and prospects
Heijmans is currently active in the British market with its subsidiary Leadbitter. Leadbitter is particularly successful in the fields of subsidised housing, care facilities and school buildings. With respect to subsidised housing, which accounts for one third of turnover, Leadbitter often works on the basis of framework agreements with housing corporations. Denne Construction has also acquired considerable expertise with this method of working, which enables homes to be built in greater numbers using the same subcontractors and suppliers. This operates to the benefit of continuity and is therefore favourable in terms of margin and risk profile.

Subsidised housing in England is a growth market characterised by a relatively high margin. In order to deal with the shortage of affordable housing, the British government has undertaken to invest € 8 billion in subsidised housing in the period 2006 - 2008.

In geographical terms, Leadbitter's and Denne Construction's respective spheres of activity will clearly be augmented, as there is hardly any overlap. Denne Construction will operate through the Leadbitter organisational structure and continue to trade under its own name. The present management staff will remain linked to the company.

Source: Heijmans

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