LONDON, UK: SigmaRoc has today entered into an agreement to acquire certain European lime businesses from CRH plc, a global diversified building materials business, that CRH has deemed non-core comprising of standalone businesses in Germany, Czech Republic and Ireland.

The proposed deal comprises the entire issued share capital of Fels Holding GmbH including its fully owned subsidiaries Fels-Werke GmbH, Fels Netz GmbH and Fels Vertriebs und Service GmbH & Co. KG; 75% of the issued share capital of Vápenka Vitošov s.r.o. r; and the entire issued share capital of Clogrennane Lime Limited.

The total consideration payable by SigmaRoc for the proposed transaction is €745 million.

In addition, the company has entered into the Call Options pursuant to which, subject to certain conditions, it has been granted the right to acquire, separately the UK and Polish lime operations of CRH.

The consideration will be satisfied by a combination of €230 million from the gross proceeds of the placing, the drawdown of €350 million under new €750 million banking facilities, €75 million of deferred consideration.

The acquisitions represent an opportunity to become Northern Europe’s leader in lime, combining high quality businesses and complementary footprints with pro forma FY22 revenue of £1 billion and underlying EBITDA of £211 million.

Following the acquisitions, the enlarged group will be positioned as either the number one or number two participant of the lime market in all of its key markets.

The acquisitions are expected to deliver revenue growth opportunities and cost synergies resulting in at least €30 million of EBITDA contribution by the end of 2027. Revenue opportunities include expansion into adjacent applications and new geographic markets including entry into the Baltic region. Cost synergies are anticipated to be realised from site network optimisation, operational improvements, savings from procurement and SG&A.

The Business comprises 16 operating locations with leading market positions across Ireland, the UK, Germany, Czech Republic and Poland. The combined Business generated sales of c.$610 million and EBITDA of c.$137 million in 2022.

The transaction is structured in three phases, the first of which is expected to complete in early 2024 comprising the Group’s lime operations in Germany, Czech Republic and Ireland. The remaining phases, consisting of operations in the UK and Poland, are expected to complete in 2024.

Albert Manifold, Chief Executive of CRH, said: “The decision to divest at an attractive valuation follows a comprehensive review of the Business and demonstrates CRH’s active approach to portfolio management. The proceeds from the divestment will provide us with significant additional capital allocation opportunities to deliver further growth and value creation for our shareholders”.

CRH and SigmaRoc will cooperate in future through reciprocal supply agreements across several mutually strategic sites in the UK, Ireland and Poland, providing both parties with the long term benefits.

The lime market is expected to continue to grow and to be worth €1.9 billion in 2031 across the enlarged group’s markets. This is expected to be driven by increased demand from the construction and steel industries as well as a move towards greener industrial processes for which lime is a key input.

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