Boral says it will buy Wagners’ quarry, concrete and related assets in the Darling Downs, South East Queensland and Townsville regions and several land parcels with future development potential.
Around 275 employees will transfer to Boral through the acquisition.
The purchase expanded the geographical reach of Boral’s construction materials division in attractive and growing markets, Boral said in a statement on 15 April.
In the Darling Downs region, Wagners construction materials assets included high quality quarries, 12 concrete plants, transport operations and a 60 per cent share in a fly ash joint venture.
The transaction would enhance Boral’s ability to service major Darling Downs/Surat Basin resources projects and the ongoing westward expansion of Queensland’s largest population base, Boral said.
In South East Queensland, Wagners’ network of concrete plants would extend Boral’s existing footprint in key growth corridors, and in North Queensland, the acquisition would add a concrete plant and a sand quarry which would enhance Boral’s position in Townsville.
Wagners would continue to own and operate its Brisbane cement grinding plant.
The deal includes a cement supply arrangement which would augment Boral’s future cement supply position and underpin the future of the Wagners Group cement grinding plant, Boral said.
Completion of the deal was subject to clearance from the Australian Competition and Consumer Commission (ACCC) on terms acceptable to the parties and the finalisation of remaining due diligence and procedural issues.
The transaction is expected to be completed in the second half of 2011, Boral said.
In 2009-10, the Wagners construction materials assets covered by the deal had revenue of $115 million, with earnings before interest, tax, depreciation and amortisation (EBITDA) of around $17 million.
Boral said the acquisition represented a 2009-10 multiple of 9.7 and was expected to be earnings per share accretive in 2011-12.
Boral chief executive Mark Selway said the acquisition was “an exciting investment in our core Australian construction materials business.
“Wagners construction materials is an excellent addition to our existing business, adding high quality assets and market positions in attractive growth areas of Queensland,” Mr Selway said.
Source: Boral Construction Materials