Edinburgh rental homes specialist Sigma to be bought in bumper £190 million deal

Sigma Capital Group, the Edinburgh-based residential development and urban regeneration specialist, is to be bought in a deal that values the group at almost £190 million.

Friday, 11th June 2021, 8:04 am

If the acquisition by pan-European property specialist PineBridge Benson Elliot is approved by shareholders it would mark the loss of another Scottish listed firm from the London stock market.

Sigma, which also has offices in Manchester and London, has already delivered thousands of new family homes for rent south of the Border and launched its first private rental development in Scotland earlier this year.

PineBridge said Sigma, whose shares are listed on the Alternative Investment Market, would continue to operate “materially in the same way” following the takeover, which has been recommended by the boards of both parties.

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Sigma Capital has already delivered thousands of new family homes for rent. Picture: Ant Clausen Photography
Sigma Capital has already delivered thousands of new family homes for rent. Picture: Ant Clausen Photography

The firm, which has made the offer through an acquisition vehicle called Six Bidco, said it did not intend to make “any material reduction to the headcount” of Sigma, though its independent directors are expected to step down.

The cash offer values Sigma at some £188.4m and the 202.1p-a-share offer marks a 35.6 per cent premium on Thursday’s closing share price.

Graham Barnet, chief executive of Sigma Capital Group, said: “We are delighted that our independent directors intend to recommend this offer from PineBridge Benson Elliot, having reviewed a number of options from other parties.

“We know the team well and believe that our complementary skills, experience and sector knowledge, as well as PineBridge Benson Elliot’s capital backing, will make a powerful combination, and enable Sigma to expand its activities significantly.

“Sigma has been a pioneer in the delivery of new, single-family homes in the private rented sector, creating an unrivalled property delivery and management platform.

“We believe we have delivered one of the largest number of new family rental homes in the UK. We also manage the rental of thousands of homes for our partners.

“The need for high-quality, professionally-managed rental homes remains a critical unmet need in the UK.”

Joseph De Leo, managing partner of PineBridge Benson Elliot, added: “Having spent the last number of months growing our understanding of the company’s many strengths and its strategic priorities as it strives to unlock its potential, we believe that the combination of our capital backing; strategic support; deep expertise; and track record can be an effective catalyst for achieving Sigma’s growth ambitions over the coming years.

“Sigma operates in an important part of the market that has shown remarkable resilience over the past year and, in partnership, we can further build on the successful UK housing platform the Sigma team have established.”

In February, Sigma kicked off its first Scottish private rental development in partnership with local housebuilder Springfield Properties. The move also marked the launch of Sigma’s rental brand, Simple Life, in Scotland.

Sigma said the site will comprise 75 family rental homes with a combined estimated rental value of approximately £760,000 per annum, which equates to about £840 a month. It forms part of a substantial, new standalone “village” development of around 3,000 homes already well underway by Springfield at Bertha Park, on the outskirts of Perth.

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