# SigmaRoc plc Acquisition of Topcrete Limited for £9m

- Link: https://www.directorstalkinterviews.com/sigmaroc-plc-acquisition-topcrete-limited-9m/412738431
- Published: 2017-10-19T07:25:37+01:00
- Author: Giles Arbor

**SigmaRoc plc** (LON:SRC), the buy-and-build construction materials group, is pleased
to announce the acquisition of Topcrete Limited and its wholly owned subsidiary 
Allen Concrete Limited (‘Allen Concrete’), the specialist precast concrete producer,
for an initial cash consideration of £9m and a deferred conditional cash consideration
of £3.5m, subject to certain adjustments in respect of completion accounts. The 
acquisition is expected to be earnings enhancing in the year ending 31 December 
2017.

Highlights:

● Acquisition of sought after specialist wetcast concrete products business;

● EBITDA of £2m and consolidated revenue of £5.2m for year ended 28 February 2017;

● Initial cash consideration of £9m;

● Conditional deferred consideration of £3.5m (‘Deferred Consideration’);

● Strong pipeline for further acquisitions with advanced negotiations on another
potentially imminent value accretive transaction.

Founded over 60 years ago, Allen Concrete is a specialist precast concrete producer,
with operations in London and the Midlands. Allen Concrete is known for its high
quality wetcast and bespoke concrete products. It supplies a wide range of clients
ranging from builders’ merchants to major infrastructure operators, including Network
Rail. Allen Concrete has a well established footprint, including a freehold production
site in the Midlands, and it owns a further freehold industrial site in London of
significant value.

For the year ended 28 February 2017, Allen Concrete recorded underlying profit before
tax of £1.8m, EBITDA of £2m and consolidated revenue of £5.2m. The business employs
36 staff across its two sites and is well respected in the market for its high quality
products.

Allen Concrete has been acquired from Mr Roy Topp and Mr Peter Farenden (ca. 64%
and ca.14% owners respectively) and several other shareholders. The consideration
is being satisfied by the payment of £9m in cash, funded through the Company’s acquisition
existing term facility with Santander. The Deferred Consideration will be settled
over the 12 months following completion, conditional on Messrs Topp and Farenden
remaining with the group and providing certain agreed transitional services. The
transaction will also release £0.5m in working capital for the SigmaRoc group.

The acquisition of Allen Concrete builds on SigmaRoc Plc’s successful acquisition
of Ronez Limited (‘Ronez’), the Channel Island construction materials producer, 
in January, and the acquisition of a dry bulk carrier ship in April, to create the
Company’s shipping and trading business. SigmaRoc’s pipeline for future transactions
remains strong.

> **David Barrett, Chairman, commented:** “We are very pleased to welcome Allen 
> Concrete to the SigmaRoc group, it has a solid history and is highly regarded 
> in its sector. The acquisition fits well with our strategy and builds on the successful
> platform we have created since the integration of Ronez. This is another step 
> in our ambition to generate shareholder value, while preserving the unique identity
> of the businesses we buy.”
> **Max Vermorken, CEO, commented:** “Allen Concrete is another excellent example
> of the type of business we are seeking to acquire, as we roll out our buy-and-
> build strategy. It is a high calibre operation with a market leading position,
> that is driven by its specialist products and a workforce dedicated to quality.
> Allen Concrete is well placed for further organic growth, as well as bolt-on activities
> centred around its industrial landholdings in London, all of which will further
> boost SigmaRoc’s EBITDA.”

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