Boral to strengthen core Australian business

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Company agrees to acquire Wagners’ construction materials assets in Queensland for A$173 million

BORAL Ltd have reached an agreement to acquire certain construction materials assets and operations of the Wagners Group for A$173 million, in a move that will expand the geographical reach of Boral’s construction materials division in attractive and growing markets.

Under the transaction, Boral will acquire Wagners’ quarry, concrete and related assets in the Darling Downs, south-east Queensland and Townsville regions, as well as several land parcels with future development potential. Around 275 employees will transfer to Boral through the acquisition.

In the Darling Downs region, Wagners’ construction materials assets comprise high-quality quarry positions, 12 concrete plants, transport operations and a 60% share in a fly-ash joint venture. The transaction will enhance Boral’s ability to service major Darling Downs/Surat Basin resources projects and the ongoing westward expansion of Queensland’s largest population base.

In south-east Queensland, Wagners’ network of concrete plants will extend Boral’s existing footprint in key growth corridors, while in north Queensland, the acquisition will add a concrete plant and a sand quarry which will enhance the company’s position in Townsville.

Wagners Group will continue to own and operate a cement grinding plant in Brisbane, and the sale includes a cement supply arrangement which will augment Boral’s future cement supply position and underpin the future of the Wagners Group cement grinding plant.

The transaction is expected to be completed in the second half of 2011, subject to regulatory approvals and the finalization of remaining due diligence and procedural issues.

For the full year 2010, the Wagners construction materials assets acquired achieved a revenue of A$115 million, with EBITDA of around A$17 million.

Boral chief executive Mark Selway commented: ‘The acquisition is an exciting investment in our core Australian construction materials business. Wagners’ construction materials is an excellent addition to our existing business, adding high-quality assets and market positions in attractive growth areas of Queensland.’