4 January 2022
(EPIC: SRC / Market: AIM / Sector: Construction Materials)
('SigmaRoc', the 'Group' or the 'Company')
Acquisition of Johnston Quarry Group
SigmaRoc plc (AIM: SRC), the AIM quoted quarried materials group, is pleased to announce the acquisition of Johnston Quarry Group Limited ('JQG') and Guiting Quarry Limited for an initial cash consideration of £35.5m (the 'Acquisition') from Nicholas Johnston, Giantflow Limited and Flowgiant Limited (the 'Sellers').
JQG is a specialist quarried materials supplier producing construction aggregates and premium quality building stone, as well as agricultural lime for soil improvement. Its aggregate products are typically used in infrastructure projects, with its unique Cotswolds Ironstone and Bath Stone used in specified high end housing applications. The business operates eight quarries and two separate processing sites located across the South West, Oxfordshire and Lincolnshire. JQG has access to 86 million tonnes of freehold and leasehold reserves and resources giving JQG an average life of mine of over 40 years.
For the 12 months to 30 September 2021, JQG reported revenue of £14.7m, generating EBITDA of £5.9m and £3.6m profit before tax. As at 30 September 2021, JQG had gross assets of £22.1m and net assets of £6.9m primarily in land, mineral reserves and plant and machines. The Acquisition, which will be immediately enhancing to SigmaRoc's underlying earnings, is expected to complete in the next few weeks, following the satisfaction of certain completion conditions. On completion of the Acquisition, Nicholas Johnston, JQG's founder, will remain available in an advisory capacity as required for smooth integration. The Acquisition consideration will be funded from the Group's existing resources, including the assumption of up to £6m of JQG's long term debt and up to £3.6m in plant hire contracts.
As part of the Acquisition, SigmaRoc has also conditionally agreed to purchase from the Sellers two further quarries, together with additional mineral reserves, for a total potential consideration of £14.5m. These additional sites have a strategically attractive location relative to JQG and will increase the business' footprint and market access. The consideration for the acquisition of these additional sites is payable in three phases, upon the delivery of each of the two quarries and the delivery of the mineral reserves with planning permission. The Group expects these additional transactions to complete between H2 - 2022 and H2 - 2024.
David Barrett, Chairman of SigmaRoc, commented:
"Johnston Quarry Group fits the SigmaRoc model well and I believe the benefits gained will be mutual. As a Group, we have focussed on building a portfolio of high quality stand-alone businesses, to which we can add value through our improvement and integration efforts, while maintaining those aspects of each which are unique and successful. We look forward to welcoming the JQG team to SigmaRoc and see significant potential to create value in this business over time."
Max Vermorken, CEO of SigmaRoc, commented:
"Firstly, we welcome the JQG staff to SigmaRoc and look forward to supporting them in growing and developing their very successful business. JQG is high quality quarrying group, with an attractive geographic footprint and a product range which offers both architectural and environmental benefits over alternatives. The Acquisition extends our footprint significantly in several key markets within the UK, while offering the opportunity for further improvement and platform based synergies."
Market Abuse Regulation (MAR) Disclosure
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014, which forms part of United Kingdom domestic law by virtue of the European (Withdrawal) Act 2018.
Information on the Company is available on its website, www.sigmaroc.com.
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