Adelaide based cementer Adbri Limited (ASX:ABC)
has inked a deal to purchase the Milbrae concrete and aggregate business under their Mawsons joint venture name, though kept its purchase price private.
The 52-year-old company Milbrae has 13 quarries and seven fixed concrete plants and is forecast to generate revenue of around $85 million for the year to the end of June 2021. It supplies materials for local building and infrastructure construction throughout the Riverina region of New South Wales and provides contract crushing services to the mining sector.
Now to the buyer. Mawsons a 50:50 joint venture between Adbri’s wholly owned subsidiary and BA Mawson Pty Limited operates 22 quarries and 41 concrete plants throughout regional Victoria and southern New South Wales.
Milbrae represents a complementary acquisition to the existing Mawsons business, expanding its geographic footprint in southern New South Wales as their employees transfer as part of the deal.
The acquisition is highly accretive to Mawsons at a multiple which represents 4.3 times forecast 2021 earnings before interest, tax, depreciation and amortisation.
The acquisition will be funded by Mawsons through existing cash holdings and an external debt facility.
The transaction is effective 1 July 2021 subject to completion which is anticipated in the third quarter of 2021.
Shares in Adbri Limited (ASX:ABC)
are trading 2.6 per cent higher at $3.56.