Breedon Aggregates acquires assets for over £50m
Published: 15 April, 2013
Breedon Aggregrates recently acquired Scottish assets from Aggregate Industries for £34m, and has also reached agreement to purchase assets from Marshalls for an initial consideration of £17.5m.
Breedon Aggregates’ Scottish acquisition will add six active quarries, four asphalt plants, seven ready-mixed concrete plants and two concrete block plants in Grampian, Tayside, Highlands and Hebrides. The acquisition also means the group’s mineral reserves and resources will more than double to almost 400m tonnes – enough to last 76 years at current extraction rates – and would have added approximately 20 percent to group revenue and 24 percent to group EBITDA in 2012. Possible acquisition of assets in England and Wales could add a further four quarries and up to 13m tonnes of mineral reserves and resources.
Chairman Peter Tom CBE said: “These acquisitions are consistent with our long-term aim of becoming the lowest-cost operator in our chosen markets. We believe that they will put us in an even stronger position to benefit from any UK economic recovery.
“We will remain focused on further improving our performance and our management team has demonstrated its ability to deliver solid results in the most difficult market conditions. The previous acquisitions made by the group have all added significant value to our core business and this gives us confidence in our ability to repeat this with future deals. Weather permitting, the Board is confident of making further progress in 2013.”
Further to its Scottish acquisition, Breedon Aggregates has now reached agreement and exchanged contracts to purchase certain assets from Marshalls for an initial consideration of £17.5m in cash. The final consideration will be up to £19m, dependent on certain conditions subsequent.
The assets to be acquired comprise freehold and leasehold quarries at Clearwell, near Lydney, Gloucestershire, which primarily produces high-quality limestone aggregates, and sand and gravel quarries at Dunsville, near Hatfield, South Yorkshire, Astley Moss in Greater Manchester and Mold in North Wales, which operates under the Lloyds Sand and Gravel trading name the “Quarries”. The acquisition agreement also includes an option to develop sand and gravel resources near Saredon, Staffordshire. The Quarries will provide an additional 13m tonnes of mineral reserves and resources and the potential for additional mineral prospects of 5m tonnes.
The acquisition remains conditional, inter alia, upon the passing of the resolutions at the Extraordinary General Meeting of Breedon Aggregates to be held at the offices of Travers Smith, London on 26 April at 11am and certain other conditions precedent.
Both acquisitions will take Breedon Aggregates into new, contiguous, geographical markets and are in line with the group’s stated strategy of acquiring earnings-enhancing aggregates-related businesses with strong potential for performance improvements and/or synergy benefits.