Breedon, a leading construction materials group, has completed an agreement to acquire a Belfast counterpart, Lagan Group for a sum of £455 million.
In a statement released by Breedon, the group hopes the combination of Breedon and Lagan will ‘create a leading independent construction materials group in the UK and Ireland’.
It’s also been said that the group hopes this move will ‘extend Breedon’s geographic footprint with immediate critical mass in Ireland and across the entire value chain.’
The consideration will be financed by a combination of a new £150 million term loan, a new £350 million revolving credit facility which replaces Breedon’s existing £300 million revolving facility and a £170 million equity placing.
Breedon expects to achieve annual cost synergies of approximately £5 million by the third full year following completion.
Peter Tom CBE, Breedon’s Executive Chairman, commented: “We are delighted to have completed our largest acquisition to date and particularly pleased that it has been so strongly supported by our shareholders.
“Over the last eight years we have pursued a successful buy-and-build strategy which has established Breedon as the largest independent construction materials business in the UK and the acquisition of Lagan is another strategic step for us. We believe it has the potential to add significantly to the Group’s performance and prospects and we are looking forward to working with our new colleagues to deliver further value for our investors.”
In the year ended 31 December 2017, Lagan generated revenues of £249 million and EBITDA of £46 million
Kevin Lagan, Chairman of Lagan Group, added: “I’d like to thank our committed and passionate staff for the role they have played in the growth of Lagan Group and I wish them every success as they enter an exciting new chapter with Breedon, who I am confident will build on that success, supporting the development of the business in the years ahead.”
This news follows Breedon group’s recent purchase of Staffs Concrete, a Leicestershire-based company employs more than 2,200 people and has around 750 million tonnes of mineral reserves and resources, for an undisclosed sum.