ASX-listed Lendlease Group (AU:LLC) reached an agreement to divest its UK construction division to U.S.-based Atlas Holdings for $70 million in cash. The cash consideration also includes $20 million deferred until June 2026, subject to completion adjustments. The sale marked the exit of Lendlease from international construction activities. Following the announcement, Lendlease shares gained 0.56% as of writing.

Lendlease Group is a real estate and investment company with operations across Australia, Asia, Europe, and the Americas.

Lendlease Wraps Up Global Construction Business

With the UK division sale, Lendlease has wrapped up its global construction business, significantly ahead of the 18-month timeline outlined in the May 2024 strategy update. As per this strategy, the company aims to streamline its business and prioritize expanding its Australian operations and global investments platform. Notably, Lendlease divested its U.S. construction division last year.

Meanwhile, the move to exit international operations was largely influenced by strong pressure from key investors, including HMC Capital (AU:HMC), Tanarra Capital, and Allan Gray. The investors contended that the company was generating weak returns and was overly complex, urging it to concentrate on its Australian operations instead.

Lendlease Unveils More Details on UK Sale

The company further stated that the profit impact from the recent transaction is expected to be “broadly neutral.” The net cash outflow from the deal is projected to be approximately $100 million, primarily due to the unwinding of negative working capital in the business.

The sale is expected to be completed before the end of FY25, contingent on regulatory approvals.

Additionally, the companyhas confirmed its earnings guidance for FY25. However, it noted that the results are expected to be skewed toward the second half due to a delay in finalizing the military housing sale.

Is Lendlease a Good Stock to Buy?

According to TipRanks’ consensus, LLC stock has received a Moderate Buy rating based on a total of three recommendations from analysts. The Lendlease share price forecast is AU$7.46, which is 20% above the current trading levels.

See more LLC analyst ratings

Disclosure