Hope Construction Materials today announces that its shareholders have entered into a conditional agreement to sell the business to Breedon Aggregates Limited for £336 million, creating the UK’s leading independent producer of cement, concrete and aggregates.
The combination will create a vertically integrated building materials group with a broader product mix, greater geographic spread and enhanced growth prospects, able to take advantage of the buoyant outlook for the UK construction industry.
The enlarged business will operate one of the country’s largest cement plants, nearly 60 quarries and more than 200 ready-mixed concrete plants. In addition, it will have around 750 million tonnes of mineral reserves and resources.
Under the terms of the transaction, the owners of Hope will become a significant shareholder in Breedon and Amit Bhatia, chairman of Hope, will take a seat on the board of the enlarged company.
- Breedon to acquire Hope for £336 million on a cash and debt-free basis
- Consideration payable in a combination of cash and shares with Hope shareholders owning 18.4% of the enlarged business on completion
- Acquisition conditional on approval of the UK Competition and Markets Authority with completion expected in Q2 2016
Amit Bhatia, Hope’s Chairman, commented:
“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.”
Peter Tom, Breedon’s Executive Chairman, commented:
“Under Amit’s leadership, Hope has delivered an outstanding performance over the last three years and has become a formidable competitor in the UK market. This acquisition transforms Breedon into the UK’s leading independent building materials group. Together with Hope we will be an even stronger business, complementing one another geographically, operationally and culturally.
We’re particularly pleased that Hope’s current shareholder will become a significant shareholder in the enlarged Breedon group and look forward to welcoming Amit to our board.
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.”