Social housing developer Keepmoat and rival Apollo Group are set to join forces and create a company with a £1bn per year turnover. The long term aim is to become the market leader in both social housing and the regeneration of areas.
The combined business will operate as separate divisions but with a regional focus. Keepmoat will operate from its headquarters in Doncaster, while Apollo, who currently employ over 1000 staff, will still operate under its own name from their headquarters in Essex. Allen Hickling will be responsible for the Northern areas with Dave Sheridan in charge of the Southern areas. David Blunt, the present chief executive of Keepmoat, will be employed in the same position of the enlarged business.
Mr Blunt said: “It is far too early to say what the value of the companies was under this merger. The deal was born out of a conversation with Mr Sheridan at the Chartered Institute of Housing Annual Conference in Harrogate in June. With Apollo working in the South the prospect of a merger came naturally during our conversation.”
In the last financial year Apollo posted revenues of £367million which was an increase of £21 million on the previous year. In the same period Keepmoat had revenues of £682m, an increase of £78 million on the previous year. Together they will build properties more economically. They expect to make savings on rudimentary outgoings such as landlord insurance and maintenance.
Before the merger there was very little geographical overlap because both companies worked in different parts of the country. There are also no plans to reduce the size of the workforce and both companies insist labour costs were never one of the reasons for the merger. Both businesses will benefit from cross-selling opportunities. Apollo will help to strengthen Keepmoat’s maintenance capabilities in the North and Keepmoat will boost Apollo’s new build offering in the South. The merger is expected to be completed before Christmas after regulatory clearance from the OFT (Office of Fair Trading).