Lendlease sold for £35m to US private equity firm

Lendlease has announced it is selling its UK construction operations to a US private equity firm for £35m.

Parent company Lendlease Group announced to the Australian Stock Exchange (ASX) this morning (2 January) that it had entered into a binding agreement to sell its UK construction business to Atlas Holdings, a 23-year-old private equity fund based in Connecticut.

Lendlease Group will receive A$70m (£35m) for its UK assets, A$20m of which will be paid in June 2026, subject to adjustment as the sale process is completed. The sale is expected to complete before June, the end of the Australian financial year.

It expects to lose A$100m net cash as it pays off debts and other costs relating to its negative working capital.

After providing for risks on projects completed or substantially completed before the agreement was signed, Lendlease Group’s profit is expected to be “broadly neutral”, the statement said.

“Substantially all” of Lendlease UK’s employees will transfer to Atlas Holdings, according to the ASX statement.

Atlas Holdings operates businesses generating around US$16bn (£12.8bn) in revenues per year, in sectors including manufacturing, energy and packaging. It claims on its website to focus investments towards companies experiencing “financial or operational stress”.

Lendlease will become the 27^th company and fourth construction business in Atlas Holdings’ portfolio.

Atlas Holdings also owns envelope giant Permasteelisa, US steel fabricator Veritas Steel and multinational supply chain management firm EQI.

Lendlease Group chief executive Tony Lombardo said: “This transaction builds on our progress to simplify Lendlease as we look to lower our risk profile and increase securityholder returns.

“It also represents a positive outcome for our talented people and our valued customers and clients, marking a new chapter under the ownership of Atlas.”

Australian parent company Lendlease Group first announced plans to pull out of its overseas markets, including the UK and US, in May last year. Announcing the sale, group chief executive Tony Lombardo said these markets were a “drag” on shareholder returns.

Lendlease Group entered the UK market in 1999 by acquiring Bovis Construction, which later took on its parent company’s name.

The group posted a A$1.4bn pre-tax loss in the year to 30 June 2024, dragged down by building safety remediation provisions and the costs of implementing a new business strategy.

Atlas Holdings started in 2002 with the purchase of a paper mill in rural Indiana. It claims to have completed more than 300 transactions, including balance sheet restructurings and bankruptcy purchases.

Peter Bacon, Atlas operating partner, said: “We are excited to acquire one of the UK’s leading construction companies, which has a long track record of successfully delivering large complex projects for both private and public sector clients.

“We look forward to working with [UK construction head] David Cadiot and his team continuing to build the business.”