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Breedon takes Scottish plants from Aggregate Industries

10 Apr 13 Breedon Aggregates has agreed a deal to buy Scottish assets from Aggregate Industries and is in talks to buy Marshalls’ quarries as well.

The deal with Aggregate Industries sees Breedon pay £34m for six active quarries, four asphalt plants, seven readymix concrete plants and two concrete block plants in Grampian, Tayside, Highlands and Hebrides.

It will double Breedon’s mineral reserves and resources to almost 400m tonnes – enough to last 76 years at current extraction rates. It will add 20% to group revenue and 24% to 2012 profits.

The deal with paving block producer Marshalls, not yet finalised, would see Breedon pay £17.5m to £19m for four quarries and up to 13m tonnes of mineral reserves and resources. The quarries under discussions are at Clearwell in Gloucestershire, which produce primarily limestone aggregates, and the sand and gravel quarries at Dunsville in South Yorkshire, Astley Moss in Manchester and Mold in North Wales. The discussions also include an option to develop sand and gravel resources near Saredon, Staffordshire.

Breedon has conditionally raised £61m through a placing at 21p per share to fund the acquisitions.

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Chairman Peter Tom, who was previously boss of Aggregate Industries before setting up Breedon in 2010, 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.

"We will remain focused on further improving our performance and our management team has demonstrated its ability to deliver solid results in the most difficult market conditions.  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.  Weather permitting, the board is confident of making further progress in 2013."

Marshalls chief executive Graham Holden said: "Marshalls has been a niche player in the UK aggregates market for a number of years and, while the business is profitable, it remains ancillary to the core operations where our growth focus lies. If completed, the consideration received by Marshalls from the sale of these quarrying operations would initially be used to reduce net debt and we consider that such a transaction would be in the best interest of shareholders."

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