Breedon rescues C&G Concrete

Breedon Aggregates was created in September 2010 following a reverse takeover of Breedon Holdings by Marwyn Materials – backed by Marwyn Investment Management. Since then, it has been evaluating acquisition opportunities.

C&G Concrete, an integrated aggregates and ready-mixed concrete producer based in Lincolnshire, went into administration on 16 May. It continued to trade under the administration of PwC.

C&G operates three sand and gravel quarries and 13 ready-mixed concrete and mortar plants in Lincolnshire, Cambridgeshire and Humberside.  In 2010 C&G produced 330,000 tonnes of aggregates and 155,000 cubic metres of concrete, mortar and screeds.  Sales revenue in 2010 was approximately £12m.

The acquired assets include a substantial and strategically valuable sand and gravel operation at Norton Bottoms in Lincolnshire.  C&G also owns a number of other assets, including a farm of 286 acres with planned mineral deposits near Woodhall Spa in Lincolnshire.  In total, C&G has planned mineral reserves of 6.6m tonnes and potential further resources of 17.6m tonnes. 

As part of the arrangements, Breedon Aggregates has also agreed to acquire certain assets from C&G’s former parent company FH Gilman & Co, which is in administrative receivership.

Breedon said that C&G’s operations fitted well with its own in the Midlands and East Anglia – “giving us genuine scale and potential supply synergies in our English ready-mixed concrete business”.

As part of the arrangements, Breedon Aggregates has also agreed to acquire certain assets from a related company, F H Gilman & Co (in administrative receivership).

Breedon chairman Peter Tom said: "We are delighted to have secured such a high quality business as our first bolt-on acquisition and look forward to welcoming C&G's employees into the group.  C&G has a strong market position and excellent asset base in Lincolnshire and South Humberside and we see significant growth potential in the business.  We also expect to be able to deliver useful synergy savings and operational improvements following the acquisition.

"We continue to review a number of other acquisition opportunities as we seek to build on the excellent platform we have created in Breedon Aggregates."

Joint administrator Eddie Williams said: "We are pleased to have secured a sale of the C&G operations to Breedon Aggregates that not only protects the employment base of the company, but also secures value for the creditors of C&G.  I would like to take the opportunity to thank the employees, customers and suppliers for their support over the last few months and look forward to seeing the C&G business continue to thrive as part of the Breedon Aggregates Group."

Following the acquisition of C&G Concrete, Breedon operates 26 quarries, 18 asphalt plants and 40 concrete (including mortar) plants in England and Scotland and employs approximately 830 people.  This makes it the largest independent aggregates group in the UK, aside from the five global majors. The group has nearly 200m tonnes of mineral reserves and resources in the UK.  Breedon Aggregates' declared strategy is to grow through consolidation of the UK heavyside building materials sector.

It had group revenue of £84.7m in the first six months of 2011, EBITDA of £8.4m and retained profit of £500,000.

Operating margin improved from 8.9% to 9.9% thanks to price increases to cover rising costs of bitumen, gas oil and transport. Breedon has also secured planning consent on an additional 12m tonnes of reserves at Leaton Quarry.

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