Construction group Breedon has acquired a string of concrete plants and quarries in Scotland as part of a £178 million takeover of CEMEX UK.
Breedon will pay £155 million cash and take on £23 million of lease liabilities under the takeover. It said the deal would strengthen Breedon’s position in the construction materials market and gave potential to increase earnings through synergies of £2 million within three years.
CEMEX produces ready-mixed concrete, cement and aggregates, asphalt, block paving and pre-cast concrete blocks for the construction industry. It has quarries in Perthshire, Stirlingshire, the Lothians and South Lanarkshire and distributes aggregates from a network of depots across the central belt. Its 100 operations across Britain revenue of £178 million and EBITDA of £23 million for the year ending December 2018. It has been part of the multinational CEMEX coproration.
Breedon chief executive Pat Ward said: “This is a unique opportunity to extend our national network through a single value-enhancing transaction, substantially increasing our footprint in several regions of Great Britain where we are currently underrepresented and adding approximately 170 million tonnes of mineral reserves and resources. It also delivers a step-change in the development of our national asphalt strategy.
“There is potential to drive significant performance improvements across these new assets and they will also strengthen our platform for further organic growth and bolt-on acquisitions. In addition to the cost synergies we anticipate, we also expect the deal to be accretive to both earnings and free cash flow in the first full year, with a positive ongoing impact on the cash generation of the enlarged Group.”
