Kier has sold its housing arm Kier Living to a company owned by investor Guy Hands, founder of Terra Firma.
Hands’ company Foster BidCo will pay £110m in cash on completion of the deal, expected before mid-June.
Kier said the deal would help it reduce its net debt and reduce the volatility of its working capital, as well as removing the capital requirements to support land acquisition within Kier Living to maintain its level of sale completions.
The housing division has been up for sale since 2019, although the process was delayed last year by the coronavirus pandemic. It is now expected to be renamed Tilia Homes following its sale.
Kier added that it was continuing to consider a potential equity raise to raise further cash.
Andrew Davies, Kier Group chief executive said: "The actions we have taken over the last two years have created a strong operational platform for sustainable profitable growth and free cash flow.
“The disposal of Kier Living delivers another key milestone in the Group’s strategy to simplify the business and strengthen its balance sheet."
