Breedon Aggregates is on the acquisition trail after completing a £61 million shares issue to fund the purchase of six new quarries and a string of production plants.
Around 150 staff will transfer to the company, which has its Scottish HQ at Ethiebeaton in Angus, under the terms of two deals it has negotiated with Aggregate Industries and Marshalls PLC.
The agreement with Aggregate which will see Breedon take on six quarries, four asphalt plants, seven ready-mix concrete plants and two concrete block units has been completed for a total of £34m.
The deal almost doubles the firm’s total mineral reserve in Scotland to 400m tonnes, enough to maintain current production levels for 76 years, and in revenue terms is equivalent to around 20% of group turnover last year.
The company said advanced negotiations are also continuing over the Marshalls deal, which will see it take on a parcel of assets in England and Wales. That deal is expected to go through by the end of this month, with a potential purchase price of £19m.
Funding for the two deals is coming from a new share offer which is expected to raise £61m before tax and fees. Cash left over will be kept in reserve to fund potential future acquisitions.
The company’s expansion comes six months after Breedon ended its interest in buying selected Tarmac and LaFarge assets which were being sold off as a result of the proposed merger of the two companies.
“We didn’t feel the value was there in the business to match the price,” said Alan Mackenzie, chief executive of Breedon Aggregates Scotland.
“We are only interested in investments where we feel we can get a return, as that is the way to a successful business.
“These two acquisitions give us a lot more strength around the UK,” he added.
The new Scottish assets are spread across a wide area from Tayside to Grampian, the Highlands and to the Hebrides.
Mr Mackenzie said the firm’s increased strength in Scotland would put it in prime position to benefit from projects such as the dualling of the A9 from Perth to Inverness, and the Aberdeen western bypass.
Last month, the firm revealed a profit after tax for the year to December 31, 2012, of £5.3m up from £1.2m in 2011 and a £4.6m increase in overall revenues.
Chairman Peter Tom said he expected further progress this year dependent on how the weather played out.
He said: “These acquisitions are consistent with our long-term aim of becoming the lowest-cost operator in our chosen markets.
“We believe that they will put us in an even stronger position to benefit from any UK economic recovery,” he added.
“The previous acquisitions made by the group have all added significant value to our core business, and this gives us confidence in our ability to repeat this with future deals.”