Lafarge South Africa acquired by Afrimat
Afrimat expand national construction materials footprint with acquisition of Lafarge South Africa
SOUTH African mid-tier mining and materials company Afrimat have acquired Lafarge South Africa Holdings (Pty) Ltd (LSA), including all their subsidiaries (LSA Group), subject to customary regulatory approvals.
LSA Group, a member of the Holcim Group, offer an extensive range of products to the construction and infrastructure industry, including aggregates, concrete, cement, and fly-ash. The acquisition will be housed in Afrimat’s Construction Materials division.
Commenting on the acquisition, Andries van Heerden, chief executive officer of Afrimat, said: ‘A key focus of Afrimat is our conscious operational efficiency initiatives, which are aimed at expanding volumes, reducing costs, and developing the required skill levels across all staffing categories.
‘This exciting deal forms part of the Afrimat Group’s ongoing diversification strategy and will increase Afrimat’s offering in the construction industry, by expanding our quarry and ready-mixed concrete operations nationally and allowing for Afrimat to enter the cement value chain competitively.’
Afrimat are highly cash-generative and effectively debt free, allowing this acquisition to be financed largely in cash. ‘We are confident that this acquisition is a good use of our cash reserves, and following the purchase, the Afrimat Group’s balance sheet will remain healthy with debt levels well within our target range,’ said Mr van Heerden.
Core assets acquired consist of aggregate quarries, ready-mixed concrete batching plants, an integrated cement plant, cement grinding plants, cement depots, and high-quality fly-ash sources. The lime and aggregate sources are long-life assets, well-designed and all with good-quality plants and infrastructure characterizing the entire portfolio being acquired.
The purchase price for the acquisition of the equity in the LSA Group is US$6 million, with an additional amount of R900 million towards repayment by or on behalf of LSA of an amount owing by LSA to the Holcim Group.
‘Operational synergies between the two businesses are substantial, considering Afrimat’s existing national footprint of aggregate quarries, ready-mixed concrete operations and precast manufacturing operations, and we believe that the time is right to strengthen our Construction Materials division,’ added Mr van Heerden.
‘We operate our Construction Materials segment at a low and efficient cost, supported by ongoing efficiency projects. This philosophy will be applied to the acquisition, where we believe further efficiencies can be extracted, and build on our successful integration of similar transactions.’
