Business
Acquisition of CEMEX assets & operations in the UK
Acquisition of CEMEX assets & operations in the UK.
About this update from Breedon Group Plc
[{"type":"text","content":"\n \nRNS Number : 0625Z Breedon Group PLC 08 January 2020 \n\n \n \n \n \n \n8 January 2020\nBreedon Group plc (\"Breedon\" or \"the Group\")\nAcquisition of certain assets and operations of CEMEX in the UK\n \nBreedon is pleased to announce that it has entered into a conditional agreement with CEMEX UK Operations Limited (\"CEMEX\") to acquire certain assets and operations in the United Kingdom (\"CEMEX's UK Assets\") for a total consideration of £178 million on a cash and debt free basis (the \"Acquisition\"). The combination of Breedon's and CEMEX's UK Assets will further enhance Breedon's position as a leading construction materials group in Great Britain and Ireland. The Acquisition is consistent with Breedon's strategy of acquiring earnings-enhancing aggregates-related businesses with strong potential for performance improvements and synergy benefits.\n \nHighlights:\n \n· Breedon has agreed to acquire CEMEX's UK Assets for £155 million in cash together with the assumption of £23 million of lease liabilities. The cash consideration will be payable to the seller on completion1\n· CEMEX's UK Assets encompass approximately 100 active operations across six divisions located in Scotland, Wales, North-East England, Norfolk, the East Midlands, and Yorkshire\n· In the year ended 31 December 2018, CEMEX's UK Assets generated revenue of £178 million and EBITDA of £23 million\n· The cash consideration will be financed by existing £350 million revolving credit facility and drawdown of £80 million through exercise of accordion option \n· Group mineral reserves and resources will increase by approximately 170 million tonnes, enough to last over 27 years at current extraction rates\n· Breedon expects to achieve annual net pre-tax cost synergies of approximately £2 million by the third full year following completion\n· The Acquisition is expected to be accretive to Underlying EPS and FCF per share2,3 in the first full year following completion\n· Return on invested capital is forecast to cover the Group's weighted average cost of capital by...