Urban Splash Modular was incorporated as a subsidiary of Urban Splash Holdings last month as the company seeks to push modular housing.
SIG supplied Urban Splash with modules for a 44-unit housing development in New Islington, Manchester, in 2016. Fully fitted modules complete with bathrooms, kitchens and even curtains were made in SIG’s factory in the East Midlands and then moved on low loaders to the site in Manchester. With two further sites under way in Manchester and North Shields, a fourth prefab site in Birmingham has also received planning permission.
Urban Splash is paying a nominal £1 for SIG Building Systems. In the year ended 31st December 2016, Building Systems reported sales of £9.2m and made a loss before tax of £5.7m. Gross assets (before write down to recoverable amounts) transferred on the sale are valued at £4.5m.
The acquisition includes SIG’s modular factory in the East Midlands, all the intellectual property and patents of its modular housing system and approximately 70 staff.
SIG expects to incur an associated exceptional charge in 2017 of approximately £7.9m relating to the divestment.
Investors in the Urban Splash Modular Ltd business include celebrity architect George Clarke, who presents television programmes, and founder of WeBuyAnyCar.com, Noel McKee.
Urban Splash chairman Tom Bloxham said: “We are pleased to have agreed terms on this acquisition with SIG. Urban Splash is committed to expanding its offsite construction capacity and this purchase is a way to vertically integrate our business and give us control of the production of our Houses. It is a testament to our commitment to, and investment in, modular housing.
“SIG has been a great company to work with, but as the factory gradually filled up with Urban Splash product, it became clear to all that its natural home was with Urban Splash. We will continue to work with SIG’s excellent supply chain and welcome our great new colleagues from SIG into the Urban Splash team."
For SIG, the sale is part of a reorganisation begun by the new management team in November 2017. Following the closure of Metechno in 2017 and the sale of Building Systems, SIG's only remaining offsite construction business is RoofSpace, a panelised room-in-roof manufacturer.
In addition to the sale of Building Systems, earlier this month SIG sold GRM, a small manufacturer of phenolic pipe insulation serving UK industrial and HVAC markets, to a subsidiary of Kingspan for an undisclosed sum.