INSURANCE and asset management giant Legal & General (L&G) has agreed to sell its housebuilding subsidiary Cala back to its former owner in a £1.35 billion deal. 

Investment firms Sixth Street Partners and Patron Capital have formed a joint venture to buy Cala, which has built several housing schemes in Dorset and the New Forest. 

Patron Capital formerly part-owned Cala, holding a 46.5 per cent stake in the company alongside L&G. However, it offloaded its stake to L&G in 2018. 

Cala employs more than 1,300 people across 10 offices and sold just under 3,000 homes last year. It is currently building homes in Merley and Fordingbridge. 

The deal will see L&G, the firm behind the Kingland retail street in Poole, get £1.16 billion, with the rest coming from the buyers acquiring Cala’s net debt. 

L&G said it could use some of the proceeds to return cash to shareholders via share buybacks. 

Antonio Simoes, chief executive of L&G, said the deal is part of “simplifying our portfolio”. 

“Cala has been an important part of L&G for over a decade, with profits increasing ten-fold since our initial investment in 2013.” 

Kevin Whitaker, chief executive of Cala, added that the deal showed “confidence in Cala’s business plan and growth potential”. 

He added that the company had tripled the number of homes it builds each year under L&G’s ownership. 

Keith Breslauer, managing director of Patron Capital, said: “Cala is one of the UK’s leading housebuilders with a best-in-class landbank and a focus on building high-quality homes, being consistently ranked five-star for customer service.” 

He added that he hoped the company would help “tackle the under-supply of homes in the UK” under Patron’s part-ownership.