New Zealand building materials manufacturer Fletcher Building is reportedly looking to sell its wholly owned, New South Wales-based subsidiary Rocla Quarry Products for $AUD200 million.
According to a report in The Australian newspaper, Fletcher Building has appointed Credit Suisse-First New Zealand Capital to broker the asset sale, with likely buyers including Boral, Hanson, Holcim and Adelaide Brighton. The newspaper noted that a number of trade buyers had already made indicative offers for the business, with second round bids expected in the coming weeks.
When Quarry approached Fletcher Building for comment, a company spokesperson said nothing had been confirmed or agreed upon.
“Fletcher Building remains aware of its continuous disclosure obligations, and will promptly communicate to the market if and when there are substantive matters required to be disclosed,” the spokesperson stated. “Rocla Quarry Products continues to remain focused on delivering high quality customer service, business performance and safety.”
Earlier this year, Fletcher Building released its first half financial results for the six months ended 31 December, 2014, showing a steep 26 per cent decline in net earnings from $NZD154 million ($AUD139.4 million) in 2013 to $NZD114 million ($AUD103.2 million).
“The downturn in mining investment and reduced government expenditure on infrastructure projects … continued to have a negative impact on our results,” company CEO Mark Adamson said at the time.
Well-established sand supplier
Fletcher Building acquired Rocla as part of its acquisition of Amatek Holdings in March 2005. The business reportedly generates approximately $20 million in earnings before interest, tax, depreciation and amortisation (EBITDA) per annum.
Rocla has been a national supplier of building and construction materials since the early 1960s and currently operates 15 quarries across five states – Victoria, New South Wales, South Australia, Queensland and Western Australia.
The business specialises in sand, producing specified product for concrete mortar, plaster and fill, as well as specialised dried sands, which are used for glass manufacture and in foundries, amongst other applications. Rocla also exports products sand products internationally.