Breedon has struck a deal to pay £455m for the construction materials specialist Lagan Group.
The business owned by Kevin Lagan operates in Ireland and the UK with a modern cement plant in Kinnegad in County Westmeath, nine active quarries, 13 asphalt plants and nine ready-mixed concrete plants.
Last year, the private group founded in 1960, delivered revenue of nearly £250m generating a profit of £46m and employing 750 staff.
The acquisition enables Breedon, which delivered £650m revenue last year and profit of £71m, to enter the attractive Irish construction market and provides significant opportunities to expand upstream though the aggregates business in Ireland and downstream through the asphalt and ready-mixed concrete operations.
Breedon will finance the takeover from a £170m share issue, a new £150m term loan and extended credit facilities.
Following the acquisition of Lagan, Breedon will employ over 3,000 staff, operating two cement plants, around 70 quarries, 40 asphalt plants, 200 ready-mixed concrete plants, nine concrete and clay products plants, four contract surfacing businesses, six import/export terminals and two slate production facilities.
Breedon chairman Peter Tom said: “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.”
Pat Ward, Breedon’s Group Chief Executive, added: “Lagan represents a unique opportunity to enter a growing market with immediate scale and excellent opportunities for expansion. It significantly strengthens our cement offer, adds to our mineral and downstream resources, brings us a bitumen import/export business and adds real weight to our contract surfacing operations.
“Lagan is well-run, well-invested, with an experienced management team and a strong track record. Its culture is complementary to our own, with a sharp focus on customer service, a first-class workforce and a commitment to safety, which is a key priority for us.
“From a strategic perspective, it provides us with a stronger platform from which to pursue further organic growth and bolt-on acquisitions.”
Kevin Lagan, Chairman of Lagan Group, said: “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.”
The group is unrelated to Lagan Construction Group, which is run by Kevin’s brother Michael Lagan. Four companies in this group were placed into administration in February.
[Ref: constructionenquirer.com]
