WIMPEY is now Britains fifth largest drystone producer after buying Alfred McAlpines minerals business for 43.5 million last week .
The purchase will bring a round of job cuts among the 90 administration staff at the 16 quarries and 5 asphalt plants, based mainly in Scotland and Wales. For its part, Alfred McAlpine will use the proceeds of the sale to cut its borrowings of around 30 million, bringing gearing down from 16 per cent to 3 per cent.
Sir John Milne, chairman of Alfred McAlpine, said: The financial strength of the group is further enhanced by the disposal and the group is in a strong position to develop further its core businesses of construction and house building.
Wimpey Group chief executive Joe Dwyer said: It is very rare that an opportunity occurs to acquire a company which is an ideal fit for your present business. The purchase will provide excellent opportunities for us to rationalise production and overheads, bringing increased profitability to our group.
Most of the 16 quarries and five asphalt plants are located in Wimpeys mining heartland of South Wales, North Wales and the central belt of Scotland and will raise output by a third in these regions.
In the year to end-October, the McAlpine minerals business made operating profits of 1 million on sales of 24 million.
The purchase adds 4.5 million tonnes of drystone to Wimpeys output of 12 million tonnes, boosting its market share to 7 per cent. It will also add 400,000 tonnes of coated stone to Wimpeys output of 2.7 million tonnes, making it the fourth largest producer.
Alfred McAlpine is retaining its specialist slate roofing company, based in North Wales, and Alfred McAlpine Asphalt, its asphalt contracting company.
McAlpine company secretary Garry Forster said: The UK minerals division did not form part of our long-term strategy. Our market share was around 2 per cent and to become a significant player in that market would require a massive investment.