BREEDON has confirmed it has entered into a conditional agreement to acquire Belfast-based Lagan Group (Holdings) for £455 million.
The business said the move will extend Breedon’s “geographic footprint” and provide the firm with an “enhanced platform” for further organic growth and bolt-on acquisitions.
The acquisition will be funded by a £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 said the purchase will allow it to enter the Irish construction market and expects to achieve annual cost synergies of around £5 million by the third full year following completion.
Peter Tom CBE, Breedon’s executive chairman said, “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.”
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.”
Lagan chairman Kevin Lagan commented, “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.”