LONDON: Breedon Group plc, a leading vertically-integrated construction materials group with operations in Great Britain, Ireland, and the United States, has announced the acquisition of Lionmark Construction Companies LLC for an enterprise value of $238 million (£187 million).
Lionmark, a Missouri-based construction materials and surfacing solutions business, specializes in road infrastructure. The acquisition is expected to more than double Breedon’s U.S. revenue and enhance its product offerings in asphalt and surfacing.
The strategic move aims to capitalize on increasing demand for transport infrastructure investment in the United States. Lionmark’s established relationships with state transport authorities and major contractors are seen as valuable assets for Breedon’s growth.
For the 12 months ending November 30, 2024, Lionmark reported unaudited revenue of $246 million and adjusted EBITDA of $31 million. The acquisition’s enterprise value represents approximately 7.7 times Lionmark’s 2024 adjusted EBITDA.
Breedon anticipates annual synergies of no less than $3 million by the third year of ownership. The acquisition is asset-backed, with approximately 100 million tonnes of reserves and resources.
The transaction will involve a $226 million cash payment, funded through Breedon’s existing Revolving Credit Facility, and a $12 million payment in Breedon shares, to be retained by the vendors for a minimum of 12 months. Completion is expected by March 7, 2025, subject to customary closing conditions.
Breedon projects that the acquisition will be immediately earnings-enhancing and that return on invested capital (ROIC) will cover the weighted average cost of capital (WACC) by the end of 2027. The group’s post-acquisition pro-forma covenant leverage is expected to be approximately 1.9 times, aligning with its financial framework.
Andy Arnold, Managing Director of Breedon US, stated, “The acquisition of Lionmark represents a significant milestone in the development of our US business. Lionmark is extremely complementary to our existing operations, diversifying BMC’s product to supply asphalt and surfacing solutions into an attractive market which is well-positioned for future growth.”
Rob Wood, Chief Executive Officer of Breedon Group, commented, “The acquisition of Lionmark will more than double our US revenue and is expected to be immediately earnings-enhancing for shareholders while allowing Breedon to maintain a conservative and flexible balance sheet to pay dividends and make further bolt-on acquisitions across each of our platforms as opportunities arise.”
Wood added, “In a year, we have built a US business of scale that is already on a pro-forma basis the equivalent size of our Irish business. We are delighted to welcome our new colleagues to Breedon and look forward to working with them as we continue to expand Breedon’s presence in the United States.”