Forterra plc to acquire Bison Manufacturing Ltd

Laing O’Rourke plc selling trade and assets of precast concrete products business for £20 million

FORTERRA plc are to acquire the trade and assets of Bison Manufacturing Ltd, the UK’s market-leading manufacturer of hollowcore precast concrete flooring, from Laing O’Rourke plc for £20 million.

Forterra say the acquisition will provide them with a unique and immediate opportunity to take a leadership position in the UK precast concrete market and to expand their currently capacity-constrained business.

Bison’s highly automated manufacturing facility at Swadlincote, in Derbyshire, is said to be the largest and most technically advanced hollowcore production operation in the UK, but has been operating at little more than 50% capacity utilization since it opened in 2006.

The plant also includes a specialist precast facility capable of producing a wide range of bespoke precast concrete products, which will allow Forterra to expand their own precast concrete business whilst benefiting from production efficiencies and economies of scale as utilization of the facility is substantially increased.

Forterra say this will enable them to take advantage of the current growing demand for precast concrete products in the residential, commercial and infrastructure markets, which is being underpinned by government initiatives to tackle the country’s housing deficit and improve infrastructure.

The acquisition also includes a five-year commercial agreement for Forterra to supply hollowcore and other precast products to Laing O’Rourke. Both parties have also agreed to a continued sharing of innovation and product development.

The acquisition will be funded from Forterra’s existing cash balances and is expected to complete in the third quarter of 2017. Following completion, the Group expects to generate a return on its investment in excess of its cost of capital by 2019, through efficiency improvements, proposed consolidation of production between sites and leveraging procurement synergies.

Forterra’s chief executive, Stephen Harrison (pictured), commented: ‘The acquisition is a unique opportunity to transform Forterra’s precast business in terms of scale and capability. We are acquiring well-invested assets whilst at the same time solving the capacity constraints on growth within our own business. We gain a well-respected brand and will attain a market-leading position as we look to grow the combined business.’