Lagan Group Chairman and CEO Kevin Lagan has confirmed that he has entered into an agreement with Breedon Group plc to sell his materials business, Lagan Group, for £455m on a cash and debt-free basis. The deal sees Breedon, the UK’s largest independent construction materials group, acquiring Whitemountain, Lagan Cement, Lagan Brick, Lagan Asphalt and Welsh Slate.
Lagan Homes does not form part of the sale.
Lagan Group Growth
Lagan Group was formed in the 1960s on the outskirts of Belfast by Kevin’s father, Peter Lagan, when he opened his first quarry at Whitemountain. Kevin Lagan has been the driving force behind the business for over 40 years, growing its turnover to £272m, with combined earnings (EBITDA) of approximately £55m in 2017.
Breedon has an established relationship with Lagan Group, having operated a successful joint venture with its Whitemountain business in Scotland. The combination of Breedon and Lagan’s materials interests will create a workforce of circa 3,000 and turnover of more than £900m.
An Exciting New Chapter
Commenting on the announcement, Kevin Lagan said, “Our committed and passionate staff at Lagan Group have contributed significantly to the development and growth of the business, differentiating us from our competition in all of the markets in which we operate. I’d like to thank the staff for the role they have played in the growth of Lagan Group, and I wish them every success as they enter an exciting new chapter with Breedon, who I am confident will build on that success, supporting the development of the business in the years ahead”.
Unique Opportunity to Enter a Growing Market
Pat Ward, Breedon’s Group Chief Executive says Lagan represents a unique opportunity to enter a growing market with immediate scale and excellent opportunities for expansion.
“It significantly strengthens our cement offer, adds to our mineral and downstream resources, brings us a bitumen import/export business and adds real weight to our contract surfacing operations.
“Lagan is well-run, well-invested, with an experienced management team and a strong track record. Its culture is complementary to our own, with a sharp focus on customer service, a first-class workforce and a commitment to safety, which is a key priority for us.
“From a strategic perspective, it provides us with a stronger platform from which to pursue further organic growth and bolt-on acquisitions.”
The acquisition of the Lagan Group companies enables Breedon to enter the Irish construction market and provides it with significant opportunities to expand upstream through the aggregates business in Ireland and downstream through the asphalt and ready-mixed concrete operations.
What Next for Lagan Homes
Following the disposal of the substantial materials business to Breedon, Kevin Lagan and his family intend to pursue a managed growth strategy with the Lagan Homes and FastHouse businesses, which are being retained.
Lagan Homes, one of the largest housebuilders in Northern Ireland, with a longstanding reputation for delivering quality homes, has plans to develop its markets in Ireland and in Great Britain, where it has established a strong regional presence. For the year ended 31 December 2017, the overall Lagan Homes business, a substantial element of which sits outside Lagan Group, posted total turnover of around £76m, with combined profit before tax coming in at approximately £10m.