Breedon Group has acquired a string of Scottish plants and quarries as part of a £178 million deal with concrete supplier Cemex.
The building materials giant has agreed to purchase a string of Cemex’s UK assets and operations for a £155m cash sum and take on £23m of lease liabilities.
Cemex has quarries in Perthshire, Stirlingshire, the Lothians and South Lanarkshire and distributes building supplies from a network of depots across the Central Belt.
Its UK assets generated revenues of £178m and underlying earnings of £23m last year.
Cemex will retain an integrated business in the UK which includes cement production, ready-mix concrete, aggregates, asphalt and paving.
Breedon said the move would “substantially increase” its UK footprint and strengthen its position in the construction materials market.
The group also expects to achieve cost savings of around £2m by the third year following the takeover, which is scheduled to complete in the second quarter of 2020. Breedon anticipates one-off integration costs of around £1m.
Cemex has more than 650 UK staff across 100 active operations in Scotland, Wales, North-East England, Norfolk, the East Midlands, and Yorkshire.
Breedon Group chief executive Pat Ward said: “This is a unique opportunity to extend our national network through a single value-enhancing transaction, substantially increasing our footprint in several regions of Great Britain where we are currently underrepresented and adding approximately 170 million tonnes of mineral reserves and resources.
“There is potential to drive significant performance improvements across these new assets and they will also strengthen our platform for further organic growth and bolt-on acquisitions.
“In addition to the cost synergies we anticipate, we also expect the deal to be accretive to both earnings and free cash flow in the first full-year, with a positive ongoing impact on the cash generation of the enlarged group.”