Springfield Properties has completed the acquisition of Glasgow-based housebuilder Dawn Homes for a consideration of up to £20.1 million.

The private and affordable housing provider has also conditionally raised gross proceeds of £15m through the placing of 12,500,000 new ordinary shares with new and existing investors, the net proceeds of which will be used to partially re-finance the initial cash consideration paid in respect of the acquisition.

Under the terms of the acquisition, Springfield will pay an initial consideration of £17.6m, of which £15.5m will be settled in cash and initially financed by available headroom within the company’s existing revolving credit facility with £2.1m covered by the shares issue.

An additional £2.5m may be payable in cash, contingent on the company receiving zoning on Dawn Homes’ site at Johnstone, near Glasgow, and is expected to be financed from available free cash flow at that time. Dawn Homes’ net debt of approximately £6.7m will be assumed by Springfield.

Dawn Homes is focussed on private housing in West Central Scotland and Ayrshire. The directors at Springfield believe the acquisition will accelerate the company’s growth and significantly enhancing earnings in its first full year. The move will also expand the company’s private land bank in West Central Scotland and Ayrshire in line with stated strategy to expand into new regions while providing an established supply chain in Glasgow with access to local labour and subcontractors.

Sandy Adam, executive chairman of Springfield, said: “This was a rare opportunity to acquire a profitable company that builds great homes. Dawn Homes is a well-run business with an excellent reputation in Western Central Scotland. I am delighted that they are joining our team and welcome all their employees into our company.

“There is a massive need for more housing in Scotland and Springfield will play a significant part in addressing that need. We will be supporting the skilled Dawn Homes team to build more homes each year. Overall, this acquisition will enable Springfield to grow and deliver housing more widely across Scotland.”

Innes Smith, CEO of Springfield, added: “We are delighted to have successfully completed this placing and for the strong support received from new and existing investors. The acquisition is part of our stated strategy of accelerating growth through expansion into new areas. Through the purchase of Dawn Homes, we have gained another foothold in another part of Scotland. The focus of both companies continues to be looking after our customers, building great homes and building more homes. We look forward to updating the market on our progress.”