Mr Vivian said that he recognised the need for market regulators to run an eye over mergers and acquisitions but said that the current system was “unnecessarily cumbersome”.
Last April Breedon completed its two largest acquisitions to date, Marshalls’ quarries in England and Aggregate Industries’ operations in northern Scotland, for a combined £54m.
Following the deal, the Office of Fair Trading (OFT) conducted a lengthy review of the transaction and then referred it to the Competition Commission (CC).
In February 2014 the Competition Commission (CC) issued its provisionally ruling on the deals, saying that Breedon Aggregates may have to sell asphalt and ready-mix concrete (RMX) operations in three areas of northeast Scotland,
Mr Vivian said that the impact of the CC’s demands was not significant to the value of the acquisition to Breedon. His complaint is not with the outcome but the process.
“The whole review process took the best part of a year, absorbing a considerable amount of time for our small head office team, as well as incurring significant legal costs,” he said.
“This was exacerbated by the significant duplication of effort involved in providing much the same information to the CC as we had already provided to the OFT.
“The review necessitated a pause in our business development programme, but we continue to see plenty of opportunities and expect to make further progress in 2014.”
He concluded: “Whilst we appreciate the need for the authorities to look carefully at regional and local competition issues, we cannot help feeling that the process is unnecessarily cumbersome, particularly for smaller, acquisitive companies like ours.
“It is to be hoped that the forthcoming combination of the OFT and CC into the new Competition & Markets Authority will lead to a significant streamlining of the review process.”
It was an unfortunate time for Breedon’s bean counters to be tied up since 2013 was the first good year the company had ever seen, having begun life only in September 2010 by former Aggregate Industries boss Peter Tom and his opposite number from Hanson, Simon Vivian. Its strategy is to grow by acquisitions and cannot afford to have its acquisitions team tied up and out of the game for so long.
Reporting its 2013 results today, Breedon said that after a slow January and February, with sales suppressed by poor weather, momentum grew throughout the year. Group revenue was up 29.5% to £224.5m (2012: £173.5m).
Underlying profit before tax was up more than 120% to £12.4m (£5.6m).
During the year it sold 6.1m tonnes of aggregates (2012: 4.3m tonnes), 1.4m tonnes of asphalt (2012: 1.2m tonnes) and 620,000m3 of ready-mixed concrete (2012: 490,000m3.)
“After battling severe headwinds for three years, we finally had the wind behind us for the first time since Breedon Aggregates was formed,” said executive chairman Peter Tom.
“This helped us to produce a very encouraging financial performance and to make significant progress in developing the business and positioning ourselves to deliver further value for our shareholders in the years ahead.
“We are proud to be the only publicly-quoted British aggregates business in the UK. We have established ourselves in a relatively short period of time as a successful player in a highly competitive market, achieving scale and profitability with a strong balance sheet, whilst delivering sound value for our shareholders.
“Looking ahead, we intend to do more of the same. The year has begun well and the outlook is more encouraging than for some time. We plan to take full advantage of the opportunities ahead and remain confident of making further progress in 2014.”
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