Hanson buys into American house builder: Conglomerate confident of 'pretty good timing' for dollars 116m deal

HANSON, the coal mining to tobacco and building materials conglomerate, is extending its exposure to house building in North America.

Through Beazer, the homes and aggregates firm bought in 1991, Hanson is paying dollars 116m ( pounds 76m) for part of the Watt Housing Corporation.

Hanson is buying 37 developments representing 3,800 plots of land for residential use. Twenty are in California, and the rest in Phoenix, Arizona, and Las Vegas, Nevada.

Martin Taylor, vice-chairman of Hanson, said the plots would complement Beazer's house-building operation in south-eastern states. 'Both the US as a whole and the south-western states are lifting out of recession so this is pretty good timing.'

In 1992, Beazer built 1,200 houses in the US. Last year Watt Housing built 949, giving Beazer the chance to increase output by 60 per cent. Beazer has a larger house-building operation in the UK, where last year it built 5,000 homes.

Beazer's combined US and UK house-building operations were worth dollars 602m in turnover for 1992 and netted pre-tax profits of dollars 80m.

The dollars 116m purchase price represents a 20 per cent discount to the value credited in Watt's books. Mr Taylor said: 'The asset values in Watt's books reflect historic property prices. We are able to come to our conclusions without being saddled with those.'

Though large in absolute terms, the Watt acquisition is small fry for Hanson. Watt sold 949 homes last year for dollars 165m - or 1.2 per cent of Hanson's total turnover for the year to 30 September (at today's exchange rates).

The whole of Beazer's house-building operation contributed just 5 per cent to Hanson's overall profits for the year to September 1992 of pounds 1.1bn.

Matthew Sutherland, an analyst at the stockbroker NatWest Securities, said Hanson's strategy appeared to be to make bolt-on acquisitions in North America, while it was looking for a larger purchase in a new business area on this side of the Atlantic.

Mr Taylor said: 'We are interested in acquisitions whether they be here or in America.'

Mr Sutherland said the acquisition was an appropriate one for Hanson, but said the apparently low purchase price may be related to the sluggishness of the Californian economy, compared with the rest of the US.

California did well out of the 1980s boom but is taking proportionally more pain in recession. Californian property prices have been particularly vulnerable.

David Clarke, deputy chairman of Hanson Industries, the US arm of the conglomerate, said: 'The acquisition of Watt Housing at an appropriate time in the home-building cycle further expands Hanson's operations in building materials and handling equipment, forest products and home-building, in both the US and the UK, where it has become a major force in the construction industry.'

He estimated that the combined house-building operation would be the twelfth-largest in the US.

Hanson shares, unchanged yesterday at 232p, are at the same level as they were 12 months ago. In the intervening period the stock has sunk to 185p and risen to 262p. Relative to the stock market average Hanson has underperformed by 10 per cent over the past 12 months, but is still 20 per cent ahead over five years.

Start your day with The Independent, sign up for daily news emails
Voices
Barn owls are among species that could be affected
charity appeal
News
Sarah Silverman (middle) with sister Reform Rabbi Susan Silverman (right) and sister actress Laura Silverman (left) at Jerusalem's Western Wall for feminist Hanuka candle-lighting ceremony
peopleControversial comedian stages pro-equality Hanukkah lighting during a protest at Jerusalem's Wailing Wall
Arts and Entertainment
The Bach Choir has been crowned the inaugural winner of Sky Arts’ show The Great Culture Quiz
arts + ents140-year-old choir declared winner of Sky Arts' 'The Great Culture Quiz'
Sport
After another poor series in Sri Lanka, Alastair Cook claimed all players go through a lean period
cricketEoin Morgan reportedly to take over ODI captaincy
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Homeless Veterans appeal: 'You look for someone who's an inspiration and try to be like them'

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Could cannabis oil reverse the effects of cancer?

Could cannabis oil reverse effects of cancer?

As a film following six patients receiving the controversial treatment is released, Kate Hilpern uncovers a very slippery issue
The Interview movie review: You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here

The Interview movie review

You can't see Seth Rogen and James Franco's Kim Jong Un assassination film, but you can read about it here
Serial mania has propelled podcasts into the cultural mainstream

How podcasts became mainstream

People have consumed gripping armchair investigation Serial with a relish typically reserved for box-set binges
Jesus Christ has become an unlikely pin-up for hipster marketing companies

Jesus Christ has become an unlikely pin-up

Kevin Lee Light, aka "Jesus", is the newest client of creative agency Mother while rival agency Anomaly has launched Sexy Jesus, depicting the Messiah in a series of Athena-style poses
Rosetta space mission voted most important scientific breakthrough of 2014

A memorable year for science – if not for mice

The most important scientific breakthroughs of 2014
Christmas cocktails to make you merry: From eggnog to Brown Betty and Rum Bumpo

Christmas cocktails to make you merry

Mulled wine is an essential seasonal treat. But now drinkers are rediscovering other traditional festive tipples. Angela Clutton raises a glass to Christmas cocktails
5 best activity trackers

Fitness technology: 5 best activity trackers

Up the ante in your regimen and change the habits of a lifetime with this wearable tech
Paul Scholes column: It's a little-known fact, but I have played one of the seven dwarves

Paul Scholes column

It's a little-known fact, but I have played one of the seven dwarves
Fifa's travelling circus once again steals limelight from real stars

Fifa's travelling circus once again steals limelight from real stars

Club World Cup kicked into the long grass by the continued farce surrounding Blatter, Garcia, Russia and Qatar
Frank Warren column: 2014 – boxing is back and winning new fans

Frank Warren: Boxing is back and winning new fans

2014 proves it's now one of sport's biggest hitters again
Jeb Bush vs Hillary Clinton: The power dynamics of the two first families

Jeb Bush vs Hillary Clinton

Karen Tumulty explores the power dynamics of the two first families
Stockholm is rivalling Silicon Valley with a hotbed of technology start-ups

Stockholm is rivalling Silicon Valley

The Swedish capital is home to two of the most popular video games in the world, as well as thousands of technology start-ups worth hundreds of millions of pounds – and it's all happened since 2009
Did Japanese workers really get their symbols mixed up and display Santa on a crucifix?

Crucified Santa: Urban myth refuses to die

The story goes that Japanese store workers created a life-size effigy of a smiling "Father Kurisumasu" attached to a facsimile of Our Lord's final instrument of torture
Jennifer Saunders and Kate Moss join David Walliams on set for TV adaptation of The Boy in the Dress

The Boy in the Dress: On set with the stars

Walliams' story about a boy who goes to school in a dress will be shown this Christmas