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Fletcher Building has agreed to sell its Rocla Quarry Products business to Hanson Construction Materials.
Fletcher Building has agreed to sell its Rocla Quarry Products business to Hanson Construction Materials.

Hanson bids for Rocla Quarry Products

One of Australia’s leading construction materials producers has provisionally agreed to buy a well-established sand quarrying business.

New Zealand building materials manufacturer Fletcher Building has entered into a conditional agreement to sell Rocla Quarry Products to New South Wales-based Hanson Construction Materials.

Earlier media reports indicated that Fletcher Building began seeking a new owner for the more than 40-year-old quarrying business in June, with some of the rumoured potential buyers including Boral, Holcim and Adelaide Brighton.

The agreement involves selling Rocla’s entire business and asset portfolio to Hanson for about $AUD203 million. This would include its shares in the NSW Mittagong Sands joint venture with Benedict Sand and Gravel and in the Queensland Mount Marrow hard rock quarry joint venture with Barro Group.

It was said that the Regional Resources North West joint venture would be excluded, and that the transaction would not affect Fletcher Building’s ownership of the Rocla Pipes and Concrete Products or Winstone Aggregates businesses.

Commenting on the deal, Fletcher Building CEO Mark Adamson said, “Rocla Quarry Products is a great business with a proud heritage but it is not a strategic part of our Australian portfolio. Given its quarry positions around Australia, it naturally has a higher value to an integrated cement and concrete operator than as a stand-alone business.”

Strategic sale and acquisition

The sale is also expected to improve Fletcher Building’s financial position. The company announced the agreement with Hanson just after releasing its financial results for the year ended 30 June 2015, which showed a 20 per cent decrease in net earnings to $NZD270 million ($AUD242.4 million) compared with $NZD339 million ($AUD304.3 million) in 2014.

“Upon completion [of the Rocla Quarry Product sale], Fletcher Building expects to record a pre-tax profit of approximately $AUD100 million, reflecting the gain on sale of assets, partly offset by transaction costs and adjustments to asset carrying values,” a Fletcher Building press release stated.

Hanson confirmed the agreement with Fletcher Building, with a company spokesperson stating that the purchase of the quarrying business was “a strategic acquisition that helps secure future sand reserves in key markets”.

The transaction is still subject to a number of conditions, including clearance from the Australian Competition and Consumer Commission. Rocla Quarry Products will continue to be owned and operated by Fletcher Building until the transaction reaches completion, which is expected in early 2016.

Rocla Quarry Products has been a national supplier of building and construction materials since the early 1960s, specialising in sand. It currently operates 15 quarries across five states – Victoria, New South Wales, South Australia, Queensland and Western Australia.

Hanson is an aggregate producer that operates nationwide. It is part of HeidelbergCement, a multinational cement, concrete and heavy building products supplier that operates in five continents.

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Tuesday, 25 September, 2018 01:39pm
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