Breedon Group Plc · LSE:BREE
Breedon — Merger or Acquisition (January 2020)
9 slides from Breedon's merger presentation, Jan 8, 2020
Slide 1: Acquisition of Certain Assets of Cemex UK
ACQUISITION OF CERTAIN ASSETS OF CEMEX UK Strong value creation
Slide 2: Compelling Strategic Rationale
COMPELLING STRATEGIC RATIONALE HIGH QUALITY ASSETS ▪ Assets to be acquired are well-located and resource-backed ✓ ▪ Significantly extends the Group’s national network, strengthening STRENGTHENS MARKET POSITION Breedon’s footprint in six key regions where it is under-represented ✓ INCREASES ASSET BAS
Slide 3: Value-Accretive Transaction
VALUE-ACCRETIVE TRANSACTION • Total consideration of £178m o £155m in cash plus assumption of £23m of lease liabilities o Cash consideration to be financed by existing £350m RCF and drawdown of £80m through exercise of accordion option • Attractive financial benefits o Multiple of 7.7x 2018 EBITDA a
Slide 4: Cemex UK Assets to be Acquired: Extending Breedon's National Footprint
CEMEX UK ASSETS TO BE ACQUIRED EXTENDING BREEDON’S NATIONAL FOOTPRINT • Strengthens the Group’s geographical position o Approximately 100 active operations o Enhances exposure to six key regions • Grows the Breedon network o Quarries, RMX concrete and asphalt plants, cement terminal, building produc
Slide 5: Cemex UK Assets to be Acquired: Overview
CEMEX UK ASSETS TO BE ACQUIRED OVERVIEW 28 active quarries, 3 greenfield quarries, 6 inactive quarries, 4 AGGREGATES active aggregates depots, 1 inactive aggregates recycling plant ASPHALT 14 active asphalt plants and 4 inactive asphalt plants READYMIX 49 active RMX concrete plants, 6 inactive RMX c
Slide 6: Opportunity to Drive Significant Performance Improvement
OPPORTUNITY TO DRIVE SIGNIFICANT PERFORMANCE IMPROVEMENT VOLUMES Aggregates (‘000 t) Asphalt (‘000 t) RMX (‘000 m³) Acquisition of high-quality assets at an attractive valuation 6,661 6,461 6,493 • Earnings at depressed levels 769 661 747 628 in challenging GB market 722 564 • Significant EBITDA ups
Slide 7: Long-Term Growth Markets
LONG-TERM GROWTH MARKETS TOTAL INFRASTRUCTURE INVESTMENT (% OF GDP) 35 • Aggregates volumes are 20% below 2007 30 levels and per capita production is 20% 25 below the EU average, pointing to significant upside potential 20 15 • The new UK Government acknowledges that UK infrastructure is significant
Slide 8: Expected Transaction Timetable
EXPECTED TRANSACTION TIMETABLE Key expected dates and events 8 Jan 2020 Announcement of transaction Q1 2020 TUPE consultation period Q2 2020 Expected completion Breedon will be notifying the transaction to the UK Competition and Markets Authority (“CMA”) for clearance, but notes that completion is n
Slide 9: Conclusion
CONCLUSION • Unique opportunity to acquire quality assets, underpinned by approximately 170 million tonnes of mineral reserves and resources • Brings over 650 talented and experienced employees • Infills six key regional markets, strengthening Breedon’s GB footprint • Enables significant step-change