Buy and build construction aggregates provider SigmaRoc has announced plans to acquire aggregates company CDH Developpement for a total of €45m.
UK-based SigmaRoc said in a statement that CDH Développement is the holding company of Carrières du Hainaut SCA and CDH International SCA, the Belgian blue limestone ("bluestone") and aggregates business.
Founded in 1888, CDH is Europe's largest bluestone quarry, with a 50% global market share. It is also a major aggregates quarry, producing 1.5m - 2m tonnes per year.
The site has 150 years of reserves remaining and 352ha of freehold land and minerals (subject to current consultation regarding an extension).
SigmaRoc said that CDH is situated in a prime location and has infrastructure to deliver products into Brussels as well as into neighbouring countries. Currently 27% of revenue is generated internationally through more than 40 global partners. CDH has a diverse customer base, with less than 3% of revenue being generated from its largest bluestone customer in 2018.
In a statement SigmaRoc commented: "Due to its high quality and distinctive characteristics, Bluestone is a Global Heritage Resource and a highly prized product that travels worldwide (unlike most aggregates). Bluestone can be used in residential, commercial and infrastructure projects, as well as for architectural and cosmetic applications."
Fifteen per cent of volume from the quarry currently generates 100% of CDH's profit, as profit is only currently generated from Bluestone sales. The 1.5m - 2m tonnes of limestone aggregate produced as a result of mining bluestone each year is deemed by the current owners to be a waste product and is quarried under an unprofitable third-party agreement, which ends in 2022.
With its expertise in aggregate production and distribution, SigmaRoc says that it can generate additional profit from the significant reserves of quality limestone aggregate.
Max Vermorken, CEO of SigmaRoc, commented: "This acquisition, which is consistent with our strategy of growth, provides us with an exciting opportunity to substantially strengthen our existing presence in Belgium, one of the highest infrastructure densities in the EU. Across the group, I am extremely proud of what we have already achieved and excited about this next stage of our expansion. CDH is over 130 years old, has over 150 years of remaining reserves, is Europe's largest Dimension Stone quarry and one of Belgium's largest construction aggregate producers. This unique combination offers SigmaRoc significant potential in the Benelux market."
For the 12 months to 30 June 2019, CDH generated unaudited revenue of €45.9mn and underlying EBITDA of €12.0mn.
Post completion, SigmaRoc plans to invest approximately €8mn in CDH's quarrying operations over a two year period, to extend the site, build a new road and increase efficiencies. The directors of CDH also believe there is potential to improve sales by expanding its existing market share in Belgium, France and Germany and selling bluestone into new geographies, such as the UK and Scandinavia.
In September SigmaRoc conditionally agreed to acquire another Belgian aggregates company, sea defence rock quarrying group Stone, for €2.2m.
