Breedon Group has announced a £178m deal to buy Cemex UK's assets including 100 active sites and 170 million tonnes of mineral reserves.
Breedon agreed £155m in cash for the acquisition, financed by an existing £350m revolving credit facility and a drawdown of £80m, and £23m of lease liabilities.
The 100 active Cemex UK operations range across six divisions located in Scotland, Wales, North-East England, Norfolk, the East Midlands, and Yorkshire, and will give Breedon Group's mineral reserves and resources an extra 170 million tonnes, 'enough to last over 27 years at current extraction rates'.
Breedon is the largest independent construction materials group in the UK and its share price has been steadily on the rise since last autumn with a further fillip after this announcement.
Pat Ward, Breedon’s Group chief executive, commented: '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.'