Quoted builder McInerney Holdings is set to pay up to €9 million for a British company specialising in social housing projects.

McInerney announced yesterday that it has agreed to buy Augusta Developments, a house builder with a business spread through the south midlands of England.

The group said that it has agreed to pay £6.27 million for Augusta. McInerney has agreed to pay an initial £3.27 million in cash for the business.

Under an earn-out clause, McInerney will make further payments of up to £3 million over the next four years.

The total paid out under this clause will depend on the profits before tax and interest earned by Augusta during this period.

Augusta was founded 12 years ago and is based in Milton Keynes in England. It has businesses in Northhampton, Oxford, Bedford, Luton and other centres in the English south midlands.

According to a McInerney statement issued yesterday, the English company is currently working on six projects, involving 92 units, with a total value of £6.5 million.

It specialises in sourcing suitable land and negotiating construction deals with housing associations, which provide a proportion of the affordable housing stock in Britain.

Social housing accounts for 12 per cent of the total UK residential property market.

McInerney's managing director, Barry O'Connor, said that the deal would provide the Irish group with an entry into that sector of the market.

"It also provides a foothold for McInerney in a new geographic region, the south midlands area, which will assist our regional expansion in the private housing sector," Mr O'Connor said.

McInerney is listed on the Irish and London stock exchanges and is one of the Republic's leading house builders.

It is also involved in a number of leisure and commercial construction projects.