LONDON (ShareCast) - (ShareCast News) - Construction materials company Breedon bought rival Sherburn Minerals for £15.7m, in order to gain further access to the market in the north of England.
The sale will be satisfied by £9.5m in cash, funded from t existing resources, together with the assumption of £6m debt. A further £200,000 will be paid after one year after completion.

County Durham-based Sherburn Minerals operates four quarries and five ready-mixed concrete plants in north of England and also distributes cementitious products from two import terminals at Blyth near Newcastle and Dundee.

Pat Ward, Breedon chief executive, said: "Following our acquisition of Hope earlier this year, which significantly expanded our geographical footprint in the north of England, Sherburn is a perfect infill acquisition for us. It gives us additional mineral reserves and access to new markets for our aggregates and concrete, as well as a first-rate workforce."

Ward also said that the acquisition complements the company's existing cement plant at Hope and it would now be able to expand the cementitious business through the imports of cement and ground granulated blast-furnace slag through Sherburn's two terminals.

Sherburn had underlying earnings before, interest, tax, depreciation and amortisation (EBITDA) of £1.8m on revenues of £16.1m for the year ended 31 March. It has in excess of 21m tonnes of mineral reserves and resources, together with cement storage capacity.

The AIM-listed company also said that Paul Allison, Sherburn Mineral's current managing director and a minority shareholder, will stay on as a consultant.

Shares in Breedon were down 0.28% to 74.17p at 1023 GMT.

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