SigmaRoc acquire 40% stake in GD Harries
Rapidly expanding buy-and-build construction materials company acquires significant stake in Welsh quarrying group
AIM-listed buy-and-build construction materials company SigmaRoc plc have acquired a 40% equity interest in GD Harries, a leading quarrying and construction materials group located in South Wales, for a cash consideration of £4.89 million. The company has also entered into an option agreement to purchase the remaining 60% for a cash consideration of £7.5 million, on or before 31 August 2020.
GD Harries are one of Wales’s largest independent suppliers of aggregates – based in West Wales, they operate out of six granite and limestone quarries – incorporating three asphalt plants, six concrete plant and a wharf operation, as well as a civil engineering division delivering significant infrastructure projects.
The business was founded by Gerald D. Harries and built into the foremost independent regional supplier by his son Ian Harries, who will continue as chairman going forward.
For the calendar years ending 31 December 2015, 2016 and 2017, GDH averaged revenues of approximately £23.4 million and adjusted EBITDA of approximately £3.4 million. The company held assets with a book value of approximately £26 million at the end of 2017, including approximately 80 million tonnes of reserves and resources, sufficient for approximately 100 years of quarrying life.
Following the acquisition, SigmaRoc’s David Barrett and David McClelland will join the GD Harries board, alongside Ian Harries and Janet Philips. The investment with GD Harries will be the foundation for SigmaRoc’s third platform and will incorporate the Foelfach high-PSV quarry acquired in 2018.
SigmaRoc, who intend to fund the transaction through internal resources and existing debt facilities, expect the Group’s net debt to EBITDA ratio to remain close to the current level of 2:1.
Ian Harries, chairman of GD Harries, commented: ‘Having been approached by several companies to buy the business, SigmaRoc were the only one we engaged with directly due to their business ethos and commitment to our workforce, which has, over the years, been a key factor in driving the business forward.
‘We are very excited by SigmaRoc’s investment in us, which will allow us to continue to grow the business into the future, creating job opportunities and continuing to serve our long-standing customers.’
David Barrett, executive chairman of SigmaRoc, commented: ‘GD Harries is a great business with a very substantial asset footprint across South Wales. They will be the heart of our South Wales platform. It is a business with a long history of success and much future potential, and Ian Harries’ continued involvement will assist us in delivering growth across the platform for the benefit of our shareholders.’
Max Vermorken, chief executive officer of SigmaRoc, commented: ‘I am extremely proud of what our small team has been able to achieve within only a short space of time. With GDH as part of the Group, we will operate nearly a dozen quarries with 100 million tonnes of reserves and resources and employ almost 500 people.’