Breedon announced it has entered into a binding agreement to acquire the Sherburn Minerals Group for a total consideration of up to £15.7m.
Sherburn is an independent heavyside building materials business headquartered in County Durham, employing approximately 110 people. It operates four quarries and five ready-mixed concrete plants in County Durham, Northumberland, North Yorkshire and Cumbria. It also distributes cementitious products from two import terminals at Blyth near Newcastle and Dundee in eastern Scotland.
The purchase price will be satisfied by the payment of £9.5m in cash, funded from Breedon’s existing resources, together with the assumption of £6m of debt. A further conditional payment of £0.2m is payable one year after completion. Following completion of the acquisition Paul Allison, Sherburn’s current managing director and a minority shareholder, will remain with the business as a consultant.
Pat Ward, chief executive of Breedon, said: “Following our acquisition of Hope earlier this year, which significantly expanded our geographical footprint in the north of England, Sherburn is a perfect infill acquisition for us. It gives us additional mineral reserves and access to new markets for our aggregates and concrete, as well as a first-rate workforce.
“It also complements our existing cement plant at Hope and will enable us to expand our cementitious business through the importation of cement and ground granulated blast-furnace slag through Sherburn’s two strategically located terminals in north-east England and eastern Scotland.”
Breedon delivered a strong performance in the 10 months to 31 October 2016. Both volumes and revenues in the former Breedon Aggregates business were ahead of the prior year, supplemented by a three-month contribution from the former Hope Construction Materials business.
Including Hope, Group sales volumes of aggregates increased by 25%, asphalt by 1% and concrete by 96%. Total Group revenue for the 10-month period increased by 31% to approximately £361m. The integration of Hope is progressing well, with synergies coming through earlier than had previously been expected, according to the update.