Breedon Group plc, a vertically-integrated construction materials group in Great Britain and Ireland, announced the acquisition of BMC Enterprises Inc. The price was $300 million.
BMC is a supplier of ready-mixed concrete, aggregates and building products headquartered in St Louis, with a strong track record of both organic and transactional growth.
Breedon said this is a “compelling opportunity to launch a scalable third platform for the company in the fragmented and growing U.S. construction materials market.”
Key facts about the deal:
- Underpinned by highly attractive, established business with excellent margins.
- Well-regarded and experienced management team with a long track record who will remain with the business.
- Transaction expected to provide attractive financial returns while maintaining a strong balance sheet.
- In the 12 months ended Oct. 31, 2023, BMC recorded unaudited revenue of $178.9 million.
Rob Wood, Breedon’s chief executive officer, commented, “The acquisition of BMC represents a compelling opportunity for Breedon to launch our third platform in the United States. BMC has an excellent performance track record over a sustained period and is positioned in an attractive market for future growth.
“As a high-quality aggregates and concrete business that has grown at pace, organically and through acquisitions, with a strong management team and deep local knowledge, BMC’s culture and values are fully aligned with the Breedon business model.
“The acquisition is expected to be 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. We are delighted to welcome our BMC colleagues to Breedon and look forward to working with them to build Breedon’s presence in the United States,” Wood concluded.
Rock Products’ business, and mergers and acquisitions columnist Pierre Villere of Allen Villere likes the move by Breedon.
“CEO Nathan McKean has executed brilliantly over the last couple of decades, assembling a top-notch management team and consolidating his service territory,” noted Villere. “By reputation, BMC Enterprises is one of the best-run construction materials producers in the country.”
Rock Products also reached out to industry colleague Guy Woodford, editor of Aggregates Business Europe and Aggregates Business International, part of Route One Publishing Ltd, in Dartford, Kent, England, for his perspective.
“Breedon has been a huge independent UK building materials group success story in recent years,” Woodford said. “It is no surprise to see them expanding into the U.S., significantly building on their eye-catching entry into the Irish market, initially in 2018 after acquiring the Lagan Group, and then as Breedon Ireland after the merger of the Lagan and Whitemountain brands in 2022.
“It will be very interesting to see what approach Breedon takes with BMC and what impact the acquisition has on U.S. building materials market share,” Woodford said. “CEO Rob Wood describes this deal as taking a ‘compelling opportunity’ to enter a large and growing market. He has noted BMC’s impressive margins and experienced management team, who I’m sure Breedon will engage closely with as they look to rapidly grow their third business platform.”