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Breedon makes its biggest ever acquisition

Lagan will provide an opportunity to enter the Irish market
April 17, 2018

Breedon (BREE), the UK’s largest independent aggregates business, has made its biggest ever acquisition with the £455m purchase of Belfast-based building materials group Lagan. The deal will be funded through a £170m equity placing, a new £150m loan and a new £350m revolving credit facility that replaces an existing £300m facility.

IC TIP: Buy at 83p

Lagan will bring a modern cement plant, nine active quarries, 13 asphalt plants and nine mixed-concrete plants. It also has a brick manufacturing plant, four port terminals and a share in a bitumen vessel. In 2017, Lagan generated revenue of £249m and cash profits of £46m. The deal will give Breedon the opportunity to expand through the aggregates business in Ireland as well as asphalt and mixed-concrete operations. Cost synergies within the first three years are estimated at £5m.