Slaughter and May, Travers Smith and Simpson Thacher & Bartlett have scored roles in Legal & General's sale of its UK housebuilder Cala Group, in a deal worth £1.35bn. 

Slaughters is acting for longtime client Legal & General (L&G) in the matter, while Travers and Simpson Thacher are advising buyers Sixth Street Capital and Patron Capital. 

The sale forms part of an overhaul of L&G under new chief executive António Simões that is intended to simplify the FTSE 100 financial group's portfolio and focus on its core businesses. 

The deal will see the L&G receive £1.16bn in cash, of which around £500m will be paid at closing with the remaining consideration being paid over the next five years on a deferred non-contingent basis. 

The Slaughters team acting for L&G was led by corporate partners Victoria MacDuff and Hywel Davies. The team also included partners Kevin Howes (financing), Charles Osborne (tax), Charles Cameron and Chris Sharpe (both pensions), Phil Linnard (employment and incentives), Rob Sumroy and David Ives (both technology and IP), and Lisa Wright (competition). 

MacDuff and Hywel also led the Slaughters team that advised L&G when it took a 100% stake in Cala in 2018, acquiring the 52% of the business it did not own from Patron for £315m. Travers Smith advised Cala on the deal, while Patron was advised by Macfarlanes. 

More recently Slaughters has advised L&G, which is the UK’s biggest provider of defined contribution pension schemes, on a number of matters in the pensions sector, including the group's £4.8bn full buy-in with the Boots Pension Scheme last November.

Meantime the Travers team advising Sixth Street and Patron included private equity and financial sponsors partner Alex Dixon, head of real estate Emma Pereira and real estate partner Gareth Wynne. 

Simões told Reuters offloading Cala was in line with L&G's simplification strategy but that the group's interest in broader real estate markets was increasing. 

L&G launched investment strategies in the UK's affordable housing and Build to Rent sectors earlier in the year and expects to grow each to £4bn by 2028, Reuters reported, while Simões said real estate was one of three asset classes on which he would focus growth, alongside infrastructure and private credit.  

For its part Cala focuses on the south of England, the Cotswolds and Scotland, and has increased its home sales from roughly 1,700 in 2017 to just over 2,900 last year according to the Financial Times. Last year the company generated turnover of £1.3bn and pre-tax profits of £112mn, down 33.6% on the previous year's figure of £169m. 

Cala's is the latest sale involving a UK housebuilder, as developers look to a market recovery as interest rates start to come down following a downturn sparked by higher mortgage rates. 

Earlier in the year Slaughters acted for Redrow when it was bought by Barratt, the UK's biggest housebuilder, in a deal worth £2.5bn. Barratt was advised on the matter by Linklaters. 

The Cala sale is expected to close in Q4 2024. 

Rothschild & Co served as financial advisor to L&G on the deal, while EY and Eastdil Secured acted as as financial advisors to Sixth Street and Patron Capital.