Developer Urban Splash has acquired SIG’s loss-making modular offsite construction business SIG Building Systems for the nominal fee of £1.
The building supply giant confirmed the deal in a statement to the London Stock Exchange, in which the firm revealed it would suffer cash costs of £4.9m until March 2020 and would take a £7.9m hit in its 2017 accounts as a result of the sale.
Building Systems reported sales of £9.2m in the year to 31 December 2016 and made a loss before tax of £5.7m.
Its sale means that, following the closure of its prefab panel business Metechno, the only remaining offsite construction business within the SIG group is panelised room-in-roof manufacturer RoofSpace.
SIG also announced it had sold GRM, its small UK pipe insulation manufacturer, to a subsidiary of Kingspan Group for an undisclosed fee.
The company said the divestments were part of its new management team’s business strategy.
Urban Splash said the acquisition formed part of plans to expand its offsite construction capacity and give the firm control of the production of its houses.
Urban Splash chairman Tom Bloxham said it became clear the “natural home” for SIG’s modular business was Urban Splash as its factory “gradually filled up with Urban Splash product”.
He also vowed to continue work with SIG’s supply chain following the acquisition.