Housing developer Sigma Capital Group has agreed to be bought by a new subsidiary of a private equity real estate fund manager whose portfolio includes three hotels at Disneyland Paris.
The Edinburgh-headquartered group, which also has bases in Manchester and London, is to be acquired by PineBridge Benson Elliot LLP for £188.4m.
Sigma, which is listed on the London Stock Exchange, said its board and that of Six Bidco Ltd - the entity through which PineBridge funds will make the acquisition - have agreed on the terms of conditions of an offer of 202.1p a share.
In a statement, Sigma said: "During late 2020, in light of the strategic progress Sigma had made during the year, notwithstanding the Covid-19 crisis, Sigma's directors decided to review the strategic options and relative benefits of the various routes available to the business to fund its future growth and maximise shareholder value.
"Recognising the attractiveness of Sigma as a platform for investors with access to greater capital availability, the Sigma directors decided to appoint Rothschild & Co to run a private sale process for Sigma in order to maximise value for Sigma's shareholders.
"This process attracted participation from multiple well-funded parties and Sigma provided interested parties with access to due diligence information through a virtual data room and a series of management sessions.
"Following a period of review, further discussions with its advisers and a thorough evaluation of the proposals received by Sigma, including follow-up discussions with the relevant interested parties, the Independent Sigma directors believe that the all-cash offer from Bidco represents the most attractive option for all Sigma shareholders in terms of value, the form of consideration offered and execution certainty. Discussions with all other interested parties have terminated."
Sigma Capital Group has delivered more than 5,000 homes since 2014.
PineBridge Benson Elliot LLP was founded by Trish Barrigan and Marc Mogull in 2005 and is headquartered in London.
Its portfolio also includes assets in Belgium, France, Germany, Italy, Poland, Spain and the UK.
Graham Barnet, the chief executive and founder of Sigma, 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.
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"The need for high-quality, professionally-managed rental homes remains a critical unmet need in the UK, and we look forward to developing our model further in this exciting next step with PineBridge Benson Elliot."
David Sigsworth, the senior independent non-executive director of Sigma, added: "Following a competitive sale process initiated by the company in line with its strategic growth plans, which attracted strong interest from multiple well-funded parties, the Independent Sigma directors believe the cash offer of 202.1 pence per share from Bidco is highly attractive and in the interests of all Sigma shareholders.
"The offer presents an opportunity for Sigma shareholders to crystallise a meaningful premium today to various share price based metrics and the Independent Sigma directors intend to recommend the offer unanimously.
"The Independent Sigma directors believe Bidco and PineBridge Benson Elliot can provide Sigma with the platform required to capitalise on the significant market opportunity in the UK residential real estate sector."
Joseph De Leo, managing partner of PineBridge Benson Elliot, said: "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.
"We are pleased that the independent members of the Sigma board have unanimously recommended our proposal and that the major Sigma shareholders have endorsed the board's decision by adding their strong support."
