Skip to main content

Breedon Aggregates to acquire Hope Construction Materials

Published by
World Cement,


Breedon Aggregates is set to acquire Hope Construction Materials, creating the UK’s largest independent producer of cement, concrete and aggregates. The acquisition is valued at £336 million and will be made on a cash-and-debt-free basis.

Hope has over 160 operational sites in the UK, including the cement plant at Hope in the Peak District, five quarries and 152 concrete plants. In the 12 months to 30 June 2015, the company sold 1.6 million t of cement, 4.7 million t of aggregates and 2.3 million m3 of concrete. Revenue during the period amounted to £285.6 million, while underlying EBITDA was £37.0 million.

Hope Construction Materials is being sold by Cortolina Investments S.à.r.l. The consideration will be payable in a combination of cash and new Ordinary Shares, which will be issued to Abicad Holding Limited, an associated company of the seller, on completion of the acquisition. Upon completion, Abicad will hold approximately 18.4% of the Enlarged Share Capital of Breedon and Amit Bhatia, Hope’s current Chairman, is set to join the Board of Directors.

This will mark the entry of Breedon into the cement market. The company expects to achieve annual cost synergies of approximately £10 million from operational improvements by the third full year after completion.

Peter Tom, Breedon’s Executive Chairman, commented: “The acquisition of Hope transforms Breedon into the UK’s leading independent building materials group.  We’re creating a vertically-integrated business with one of the country’s largest cement plants, nearly 60 quarries, more than 200 ready-mixed concrete plants and around 750 million tonnes of mineral reserves and resources – together with access for the first time to the rail-fed sector of the market.

Under Amit’s leadership, Hope has delivered an outstanding performance over the last three years and has become a formidable competitor in the UK market.  Together we will be an even stronger business, complementing one another geographically, operationally and culturally. 

We’re particularly pleased that Abicad will become a significant shareholder in the enlarged Breedon group and look forward to welcoming Amit to our board. 

This acquisition is well-timed, with UK construction output forecast to expand by around 15% over the next four years and volumes of all our major products expected to grow strongly.  We are confident that we will be able to continue delivering significant value for our shareholders in the coming years, with an even stronger platform for growth.  We very much look forward to welcoming everyone at Hope to the Breedon family.”

Amit Bhatia, Hope’s Chairman, commented: “The growth of Hope is testament to the incredible amount of hard work put in by everyone in the business over the past three years.  The combination with Breedon builds on that by creating a new, independent force in the construction materials sector with superior growth prospects and greater opportunities thanks to its broader product mix, strong customer offer and extended geographic footprint.  Both companies are entrepreneurial and energetic and this transaction will combine the best of both teams and cultures. 

I believe strongly in Peter's leadership and in the potential of the enlarged business, and am delighted to be joining the board as well as retaining a considerable stake in the combined business.”


Adapted from press release by

Read the article online at: https://www.worldcement.com/europe-cis/18112015/breedon-aggregates-to-acquire-hope-construction-materials-13/


 

Embed article link: (copy the HTML code below):