SigmaRoc PLC Acquisition of Poundfield Products Group & Placing

SigmaRoc PLC (LON:SRC), the AIM quoted buy-and-build construction materials group, has today announced that it has entered into a conditional agreement to acquire Poundfield Products (Group) Limited (“Poundfield”), a UK-based group of businesses specialising in patented concrete products and systems, for a total consideration of £10.25m (the “Acquisition”).

The consideration comprises an initial cash consideration of £9.5m on a debt free / cash free basis (the “Initial Consideration”) and deferred consideration of £0.75m, which will be conditionally payable one year from completion and will be satisfied by the issue of new ordinary shares of 1 pence each in the Company (“Ordinary Shares”) (the “Deferred Consideration”).

The Initial Consideration is to be funded by way of a conditional placing of 34,000,000 new Ordinary Shares (the “Placing Shares”) at 41 pence per share (the “Placing Price”) (the “Placing”). The Placing Price represents a 4.7% discount to the closing middle market price of the Company’s Ordinary Shares, being 43 pence per Ordinary Share, on 12 December 2017 (being the last practicable date prior to the date of this announcement). Berenberg is acting as sole broker and bookrunner to the Placing.

Highlights:

· The Acquisition represents further progress in the Company’s delivery of its buy-and-build strategy with the completion of another transaction from SigmaRoc’s significant deal pipeline;

· Poundfield’s portfolio of patented specialist concrete products and systems can be efficiently integrated into the existing Group, in particular the UK concrete products cluster;

· Poundfield recorded consolidated underlying EBITDA of £1.5m and consolidated revenue of £7.4m for the year ended 31 December 2016;

· As at September 2017, Poundfield has already achieved underlying EBITDA of £1.3m and is therefore on track to exceed EBITDA recorded in 2016;

· Initial Consideration of £9.5m in cash on a debt free / cash free basis;

· Deferred Consideration of £0.75m, to be settled by the issue of new Ordinary Shares;

· Approximately £1.4m in working capital brought into to the Group;

· The Acquisition is expected to be EPS accretive in the first full year of ownership;

· Completion is conditional, inter alia, on admission of the Placing Shares to trading on AIM taking place and the Placing proceeds being received by the Company no later than the 22 December 2017; and

· SRC has a strong pipeline of further acquisitions and is in advanced negotiations on another potentially value accretive transaction.

SRC has completed and successfully integrated three acquisitions to date:

In January 2017, it acquired Ronez Ltd (“Ronez”), a Channel Islands business, for £45m from Aggregate Industries, Ronez operates the only quarry in Guernsey and one of only two quarries in Jersey.

The second acquisition, in April 2017, was the purchase of a dry bulk carrying ship, thereby launching the Group’s trading arm, SigmaGsy.

The third acquisition, completed in October 2017, was TopCrete Limited and its wholly owned subsidiary Allen (Concrete) Limited (“Allen Concrete”), a specialist precast business with a long history in wet-cast concrete and significant asset footprints. The acquisition of Allen Concrete established the Group’s UK precast cluster (whereby a cluster is a group of similar SigmaRoc businesses where operational and business synergies are expected to be captured) and delivered £2.2m operational EBITDA in 2016 financial year and was immediately accretive.

Under management, the Channel Islands business reported a 52.6% 2017 financial half year operational EBITDA increase, to £2.9m.

Commenting, SigmaRoc Plc CEO, Max Vermorken said: “The acquisition of Poundfield, a specialist in patented concrete products, is a welcome addition to our growing portfolio of assets. It will join our existing UK precast cluster which includes TopCrete, the specialist precast concrete business we acquired in October 2017. We will look to maximise synergies at both the cluster and Group level and derive overall earnings growth”.

Commenting, Executive Chairman, David Barrett said: “This acquisition marks another milestone in our buy-and-build strategy, and concludes a successful year for the SigmaRoc group. We continue to seek out businesses where we believe we can create significant value for shareholders, and the pipeline for future acquisitions in 2018 is already strong.”