# Marshalls PLC Acquire CPM Group Limited for £38.3m.

- Link: https://www.directorstalkinterviews.com/marshalls-plc-acquire-cpm-group-limited-38-3m/412738421
- Published: 2017-10-19T07:14:16+01:00
- Author: Giles Arbor

**Marshalls plc** (LON:MSLH), a leading hard landscaping manufacturer, announced
today the acquisition of CPM Group Limited (“CPM”), a pre-cast concrete manufacturer
specialising in underground water management solutions, for a total cash consideration
of £38.3m.

> **Commenting on the transaction, Martyn Coffey, Chief Executive of Marshalls, 
> said:** “Marshalls’ 2020 Strategy is to grow both organically and through carefully
> selected earnings enhancing bolt-on acquisitions with a particular focus on the
> identified growth areas of water management, security and mineral products. The
> acquisition of CPM represents a significant step towards achieving one of our 
> strategic goals. CPM is a profitable business with a strong track record of quality
> and service, primarily targeting Public Sector and Commercial end users and the
> acquisition will expand Marshalls’ product range into below ground drainage. We
> expect the business to trade, initially as Marshalls CPM, within the wider Marshalls
> Group.”

**Background**

Marshalls manufactures and distributes hard landscaping products (concrete and natural
stone paving), minerals including aggregates, ready mix mortar and street furniture.
In the year ended 31 December 2016 the Group reported revenue of £396.9m and profit
before tax of £46.0m. It has manufacturing sites in the UK and Belgium, and overseas
offices in the US, Dubai and China. It employs around 2,200 people.

CPM was established in 2004 and reported revenue of £51.2m and profit before tax
of £4.6m in the financial year ended 31 December 2016. It operates from two manufacturing
sites at Mells, in Somerset, and Pollington, near Goole in East Yorkshire, with 
ancillary offices in the Midlands and Scotland, employing around 350 people. CPM
manufactures and sells concrete pipes, containment and inspection chambers, manhole
covers, retaining walls and other bespoke industrial concrete products for the construction
sector, including new housebuilding and major infrastructure projects such as Hinkley
Point A, HS2 and A14 Cambridge. CPM reported gross assets of £33.0m as at 31 December
2016.

**The Transaction**

Under the terms of the acquisition, Marshalls Mono Limited (a wholly owned subsidiary
of Marshalls plc) has agreed to acquire 100% of the issued share capital of CPM 
Group Limited. The selling shareholders comprise the former directors of CPM Group
Limited and/or the trustees of their family pension schemes. The consideration for
the shares is £38.3m payable in cash, subject to any adjustment for specified changes
in working capital. The acquisition will be funded from existing Group facilities.

The acquisition of CPM is expected to be earnings enhancing in its first full year
after completion.

Mike Stacey, former Managing Director of CPM, will remain with the business and 
will join Marshalls’ senior management team, reporting to Martyn Coffey.

The information contained within this Announcement is deemed by the Group to constitute
inside information as stipulated under the Market Abuse Regulation. Upon the publication
of this Announcement via a regulatory information service, this inside information
is now considered to be in the public domain.

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