Sep 3 2007
Boral Ltd (Sydney, NSW, Australia) has announced that is has acquired the assets of two construction materials businesses in Oklahoma City, USA: Schwarz Readymix, a ready-mixed concrete and sand business and the quarry assets of Davis Arbuckle Materials.
The total acquisition price of US$80 million represents a multiple of 5.4 times annualised FY2008 projected EBITDA and the combined acquisitions will be earnings per share accretive in the first full year of ownership.
The businesses position Boral as the second largest concrete producer in Oklahoma City. The assets include 18 concrete batching plants, more than 160 trucks and tankers, five sand deposits and a limestone quarry at Davis, Oklahoma. The combined operations will have annual production of around 750,000 cubic yards of ready-mixed concrete and 1.6 million tons of sand and aggregates. The aggregate reserves have a life of in excess of 30 years based upon current production.
President of Boral USA, Emery Severin, said: "These investments expand our presence in the US construction material sector and create an excellent platform in the Oklahoma City market. The businesses have a reputation for high quality materials and excellent customer service. Integration of the two Oklahoma businesses together with synergies with our Colorado construction materials business will realise operational and back office efficiencies.
"This acquisition leverages Boral's ability to acquire and successfully integrate businesses that complement our US operations. The performance of our 2004 concrete and quarries acquisitions in Denver, Colorado, has exceeded our expectations."
Boral's Managing Director, Rod Pearse, said: "The acquisitions demonstrate our ongoing commitment to growing Boral's construction materials position in the US. Following these acquisitions Boral's annualised construction materials EBITDA in the USA will be around A$65 million. The USA construction materials business offers good long term value-creating growth prospects and earnings diversification which is in line with Boral's strategic intent".