SigmaRoc gobbles up Topcrete and Allen Concrete

Buy-and-build construction materials group SigmaRoc announced the acquisition of Topcrete and its wholly owned subsidiary Allen Concrete on Thursday, for an initial cash consideration of £9m and a deferred conditional cash consideration of £3.5m, subject to certain adjustments in respect of completion accounts.

The AIM-traded company said the acquisition was expected to be earnings-enhancing in the year to 31 December.

It described Allen Concrete - founded more than 60 years ago - is a “specialist precast concrete producer”, with operations in London and the Midlands.

Allen Concrete is known for its “high quality wetcast” and bespoke concrete products, SigmaRoc said.

It reportedly supplies a “wide range of clients” ranging from builders' merchants to major infrastructure operators, including Network Rail.

Allen Concrete has a “well established” footprint, it added, including a freehold production site in the Midlands, and it owns a further freehold industrial site in London of “significant value”.

For the year to 28 February 2017, Allen Concrete recorded underlying profit before tax of £1.8m, EBITDA of £2m and consolidated revenue of £5.2m.

The business employs 36 staff across its two sites and is “well respected” in the market for its products, SigmaRoc claimed.

It was acquired from Roy Topp and Peter Farenden - 64% and 14% owners respectively - as well as several other shareholders.

The consideration was being satisfied by the payment of £9m in cash, funded through the company's acquisition existing term facility with Santander.

It said the deferred consideration would be settled over the 12 months following completion, conditional on Topp and Farenden remaining with the group and providing certain agreed transitional services.

The transaction would also release £0.5m in working capital for the SigmaRoc group.

SigmaRoc said the acquisition of Allen Concrete would build on its successful acquisition in January of Ronez, the Channel Island construction materials producer, and the acquisition of a dry bulk carrier ship in April, to create the company's shipping and trading business.

It said its pipeline for future transactions remained “strong”.

“We are very pleased to welcome Allen Concrete to the SigmaRoc group, it has a solid history and is highly regarded in its sector,” said SigmaRoc chairman David Barrett.

“The acquisition fits well with our strategy and builds on the successful platform we have created since the integration of Ronez.

“This is another step in our ambition to generate shareholder value, while preserving the unique identity of the businesses we buy.”

Max Vermorken, CEO, described Allen Concrete as “another excellent example” of the type of business SigmaRoc was seeking to acquire, as it rolled out its buy-and-build strategy.

“It is a high calibre operation with a market leading position, that is driven by its specialist products and a workforce dedicated to quality.

“Allen Concrete is well placed for further organic growth, as well as bolt-on activities centred around its industrial landholdings in London, all of which will further boost SigmaRoc's EBITDA.”