Travers Smith LLP has advised its long-standing AIM-listed client, Breedon Group plc, on the acquisition of Lagan Group (Holdings) Limited, a leading construction materials business based in Belfast, for a consideration of £455 million on a cash- and debt-free basis.
The combination of Breedon and Lagan will create a leading independent construction materials group in the UK and Ireland, and extend Breedon’s geographic footprint with immediate critical mass in Ireland and across the entire value chain. The acquisition also provides Breedon with an enhanced platform for further organic growth and bolt-on acquisitions.
Following the acquisition of Lagan, the Breedon Group will employ nearly 3,000 people and have around 870 million tonnes of mineral reserves and resources. The Breedon Group’s strategy is to continue growing organically and through the acquisition of businesses in the heavyside construction materials market.
The consideration is being financed by a combination of a new £150 million term loan, a new £350 million revolving credit facility which replaces Breedon’s existing £300 million revolving facility and a £170 million equity placing.
Breedon also intends to raise up to approximately £4 million by way of an open offer to allow Breedon shareholders who are not participating in the placing to subscribe for new Ordinary Shares at the placing price.
Completion is conditional on admission of the placing shares and is expected to take place on 20 April 2018.
The Travers Smith team which advised Breedon on the transaction was led by Corporate Partners Spencer Summerfield (Head of Corporate) and Jon Reddington, Senior Associate Tom Coulter and Associate Hugh Hutchison. Additional specialist advice was provided by Partner Danny Peel and Senior Associate Jonathan Clapshaw in finance, Partner Nigel Seay and Senior Associate Paul McComb in competition, Partner Simon Yates and Associate Ed Humphreys in tax, Partner Paul Kenny and Senior Associate Sarah Walker in real estate, and Partner Doug Bryden and Senior Associate John Buttanshaw for environment and regulatory support.
Other advisers on the transaction included Arthur Cox who advised Breedon on the Irish and Northern Irish law aspects of the transaction, Moelis who acted as financial adviser for Breedon, Cenkos Securities and Numis Securities who acted as joint brokers for Breedon, Osborne Clarke who acted for the joint brokers, and Carson McDowell who acted for the sellers.