SigmaRoc acquire Johnston Quarry Group
£35.5 million cash acquisition extends SigmaRoc footprint in key markets and offers further synergies
AIM-quoted quarried materials group SigmaRoc have acquired Johnston Quarry Group Ltd and Guiting Quarry Ltd for an initial cash consideration of £35.5 million. The consideration will be funded from the Group’s existing resources, including the assumption of up to £6 million of JQG’s long-term debt and up to £3.6 million in plant hire contracts.
Johnston Quarry Group (JQG), who operate eight quarries and two separate processing sites located across the South West, Oxfordshire and Lincolnshire, have access to 86 million tonnes of freehold and leasehold reserves and resources, giving the business an average life of mine of more than 40 years.
For the 12 months to 30 September 2021, JQG reported revenue of £14.7 million, generating EBITDA of £5.9 million and £3.6 million profit before tax. As at 30 September 2021, the company had gross assets of £22.1 million and net assets of £6.9 million, primarily in land, mineral reserves, and plant and machines.
The acquisition, which will be immediately enhancing to SigmaRoc’s underlying earnings, is expected to complete in the next few weeks, following the satisfaction of certain conditions. Upon completion, JQG founder Nicholas Johnston will remain available in an advisory capacity, as required, to ensure a smooth integration.
As part of the acquisition, SigmaRoc have also conditionally agreed to purchase two further quarries, together with additional mineral reserves, for a total potential consideration of £14.5 million. These additional sites have a strategically attractive location relative to JQG and will increase the business’ footprint and market access.
The consideration for these additional sites is payable in three phases, upon the delivery of each of the two quarries and the delivery of the mineral reserves with planning permission. The Group expects these additional transactions to complete between the second half of 2022 and the second half of 2024.
David Barrett, chairman of SigmaRoc, commented: ‘Johnston Quarry Group fit the SigmaRoc model well and I believe the benefits gained will be mutual. As a Group, we have focused on building a portfolio of high-quality stand-alone businesses, to which we can add value through our improvement and integration efforts, while maintaining those aspects of each which are unique and successful.
‘We look forward to welcoming the JQG team to SigmaRoc and see significant potential to create value in this business over time.’
Max Vermorken, chief executive officer of SigmaRoc, added: ‘JQG is high-quality quarrying group with an attractive geographic footprint and a product range which offers both architectural and environmental benefits over alternatives. The acquisition extends our footprint significantly in several key markets within the UK, while offering the opportunity for further improvement and platform-based synergies.’