Building materials supplier sells assets in £178m deal
Leicestershire-based aggregates firm Breedon has bought certain assets and operations of Rugby headquartered CEMEX in a deal worth £178m.
CEMEX’s UK assets include around 100 active operations across six divisions located in Scotland, Wales, North-East England, Norfolk, the East Midlands and Yorkshire. In the year ended 31 December 2018, CEMEX’s UK assets generated revenue of £178m and EBITDA of £23m.
The deal includes 49 active ready-mix concrete plants, 28 active aggregates operations, four depots, a cement terminal, 14 asphalt plants and four building products plants. Part of the CEMEX Paving Solutions business is included in the sale as well as some inactive sites and they will all be integrated into Breedon’s business.
CEMEX says it will still retain a “substantial integrated business” in the United Kingdom encompassing, among other things, cement production, ready-mix concrete, aggregates, asphalt, and paving solutions.
Breedon says the deal will save it around £2m by the third full year following completion. It will mean the firm now employs around 3,600 people.
Pat Ward, Breedon’s Group chief executive, 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.”