More Ennstone acquisition activity in the US and Scotland
ENNSTONE plc say they have acquired an option to purchase a significant US sand and gravel business, and have made further bolt-on acquisitions in the US and Scotland. The total consideration for the various transactions is approximately £21.5 million.
In the US, Ennstone Inc. have acquired an option to purchase an operator with consented sand and gravel reserves of over 15 million tons in the strategically important state of Virginia. This option will become exercisable when the existing consent for the extraction and processing of these reserves is permitted, which is expected to occur in early 2008.
Ennstone say construction of a production plant will begin upon exercise of the option, with sales commencing thereafter. The operation will then become a key source of raw materials for the Group’s established network of ready-mixed concrete operations focused around Richmond, Virginia.
Prior to the exercise of the option, it is anticipated that an additional working sand and gravel production facility with an existing market position in the same state will be acquired by the operator over which the option is held. If this acquisition is successful, Ennstone say they will be able to start integrating their own aggregates into their downstream added-value ready-mixed concrete operations earlier than they would otherwise have expected.
Ennstone Inc. have also recently acquired the business of Deep Creek Ready Mixed Concrete, which comprises two ready-mixed concrete plants in Maryland and will provide new outlets for materials supplied from Ennstone’s recently acquired Keplinger limestone quarry in West Virginia.
The total consideration payable for these two US transactions (including investment in construction of the new production plant in Virginia) is expected to be approximately US$35 million (£16.9 million), of which some US$5.5 million (£2.6 million) has been incurred to date.
Meanwhile, in Scotland Ennstone Thistle have acquired The Boyne Bay Lime Co. Ltd, owners of a limestone quarry near Portsoy in north-east Scotland, which has added 2.8 million tonnes to Ennstone’s portfolio of consented mineral reserves in that area, together with 2 million tonnes of unconsented reserves for future development.
Ennstone Thistle have also bought DW Gordon Blocks, a concrete block-manufacturing business based near Aberdeen, thereby securing a key route to market for the company’s aggregate supplies in that region. The operation has been leased to a specialist manufacturer of block products to provide a guaranteed revenue stream in addition to the improved aggregate sales.
During the next three years, this new block business is likely to be relocated to Ennstone Thistle’s nearby Craigenlow Quarry, thereby creating a valuable redevelopment opportunity on the existing freehold site.
The total consideration for the two Scottish transactions was £4.6 million.
Commenting on this recent activity, Ennstone chairman Vaughan McLeod said: ‘Since receiving the proceeds of our placing and open offer earlier this year we have been extremely active in acquiring bolt-on assets that will continue our stated strategy of in
