Breedon Aggregates is to acquire Hope Construction Materials for £336 million.
Breedon say the move will create the UK’s “leading independent producer of cement, concrete and aggregates and a vertically-integrated building materials group.”
Peter Tom, Breedon’s executive chairman, said, “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.”
“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.
“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, will be joining the Breedon board. He said, “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.”
In the 12 months ended 30 June 2015, Hope sold 1.6 million tonnes of cement, 4.7 million tonnes of aggregates and 2.3 million cubic metres of concrete, generating revenue of £285.6 million.
The acquisition is conditional upon the approval of the UK Competition and Markets Authority and is expected to complete in Q2 2016