Deal of the day
A major British building materials business has indicated it is considering bolt-on purchases.
An anonymous source reports that Breedon Aggregates will probably plan to make between three and six small bolt-ons over the next year. Three is the most likely number due to concerns over competition issues.
Executive chairman Peter Tom wrote in an interim statement that Breedon intends “to continue to pursue our strategy of consolidating the UK building materials market.” Tom added that “we believe that market uncertainty may create further opportunities for value-creating acquisitions and we are currently considering a number of potential bolt-ons.”
They will follow the £336m (US$445m) purchase of Hope Construction Materials which Breedon agreed in November 2015. The deal, which is about to be completed, took it beyond its previous regional presence in the British Midlands and Scotland to spread itself across the UK.
The Leicestershire-based – though Jersey registered – company is unlikely to be hindered by financial troubles as it pursues the bolt-ons, having recorded a 2% revenue increase in the first half of 2016 to £163m (US$215.8m). This was in spite of a number of its projects being delayed and the uncertainty caused by the fear, and realisation, of Brexit. However, the UK leaving the EU might well prove an advantage for Breedon. The accompanying problems will certainly trouble the company less than its international competitors as its trade, and costs, are all in the UK.
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