Construction materials giant Breedon has acquired rival Lagan Group in a deal worth £455m.
Breedon has entered into a conditional agreement to buy Belfast-based Lagan, in a deal that will grow the firm’s headcount to 3,000 and give it 870m tonnes of mineral reserves and resources in the UK and Ireland.
The acquisition will see Breedon take control of Lagan’s modern cement plant in Kinnegad, nine active quarries, 13 asphalt plants and nine ready-mixed concrete plants.
Talks between the two companies began in February, with Breedon saying it was interested in buying part or all of the £250m-turnover firm in a bid to expand into the Irish market.
The Lagan deal will be the latest in a series of acquisitions carried out by Breedon in recent years.
In 2014 it bought Cotswolds-based ready-mix concrete supplier Huntsman’s Quarries for £15m, followed by Hope Construction Materials the year after in a deal worth £336m.
Breedon will finance the Lagan acquisition through a combination of a new £150m loan, a new £350m revolving credit facility, and a £170m equity placing.
Breedon expects to achieve synergies amounting to £5m by the third full year after takeover.
Kevin and Michael Lagan demerged the Lagan Group more than a decade ago after a falling-out.
Kevin went on to lead Lagan Group, while Michael took on Lagan Construction Group.
Last month four Lagan Construction Group companies were placed into administration as a result of a series of loss-making contracts.
Breedon executive chairman Peter Tom said: “Over the last eight years we have pursued a successful buy-and-build strategy which has established Breedon as the largest independent construction materials business in the UK, and the acquisition of Lagan is another strategic step for us.
“We believe it has the potential to add significantly to the group’s performance and prospects, and we are looking forward to working with our new colleagues to deliver further value for our investors.”
Lagan Group chairman Kevin Lagan said: “I’d like to thank our committed and passionate staff for the role they have played in the growth of Lagan Group and I wish them every success as they enter an exciting new chapter with Breedon, who I am confident will build on that success, supporting the development of the business in the years ahead.”