The Royal Bank of Scotland and Jamie Ritblat’s Delancey have backed a £500m management buyout of city centre development specialist Allied London
The management, led by chief executive Michael Ingall, will also have a large stake.
Ingall and his team will have between 15% and 20% and the remainder will be split equally between the other two partners.
The three have formed Capital Holdco as an acquisition vehicle, which will buy out the entire issued share capital of Arrow Properties, Allied’s holding company.
Arrow was formed by Allied’s management, RREEF, and JER Partners to acquire Allied when it delisted from the London Stock Exchange in 2000.
The acquisition of Arrow will be financed with around £150m in equity and loan stock and RBS will provide the remaining debt.
Allied is best known for its mixed-use city centre redevelopment projects, notably Spinningfields in Manchester, Skypark in Glasgow and the Brunswick in London.
Allied has a property development and investment portfolio with a gross value of around £500m.
The total completion value of its existing commercial property developments is around £800m.
Allied also owns Pelham Homes, which has planned 5,000 properties in large community developments in Essex, Kent, Sussex and Norfolk. This business will be developed further.
Ingall said the relationship with RBS and Delancey would be different from that with its previous owners.
Equity generated from Allied’s schemes will be re-invested into subsidising further acquisitions of sites to develop. Previously, its owners took much of the profit.
‘Previously, the equity was normally repatriated, which meant we could be getting smaller and smaller,’ said Ingall.
He added: ‘I’d like to see us do one or two biggish acquisitions every year to build up our portfolio now.’