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Sun December 16 2018

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Ibstock sells US brick business to repay debt

23 Nov Ibstock is selling its US brick manufacturing business Glen-Gery to Brickworks for US$110m.

The proceeds received by the group will be used to repay debt.

The value equates to over eight times Glen-Gery's earnings before interest, tax, depreciation and amortisation (EBITDA) for the 12 months to June 2018.

As part of the transaction Brickworks will assume certain liabilities, including an associated pension liability. The net cash inflow for the Group is expected to be approximately US$95m, subject to any closing account adjustments. The transaction is expected to close in the coming days.

“As a result of the disposal, and in combination with our strong underlying cash generation, we expect our net debt to be around £50 million by the end of 2018,” said the company. “This disposal further strengthens the Group's balance sheet and leaves us well positioned to invest to deliver long term growth as we focus on our core markets in the UK.”

Ibstock chief executive officer Joe Hudson said: “At the interim results in August we announced that we were undertaking a strategic review of certain aspects of our business, including our US operations, with a further update to be given at the full year results in March 2019.

"We have concluded that opportunities to grow the US business are not in line with our overall strategic objectives, and the decision was taken to dispose of these assets and refocus the Group on its core markets here in the UK. Following a competitive process, we believe that this is the best outcome for both Glen-Gery and Ibstock plc.”

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