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[April 2003]
Hanson to Acquire US Aggregates Producer
Hanson PLC announced on 16 April 2003 that it had signed a contract to acquire Better Materials Corporation ('Better Materials') from Better Minerals & Aggregates Company for US$152 million (£96.8 million) in cash, plus the assumption of approximately US$3 million (£1.9 million) of debt. Completion of the acquisition - which is subject to final due diligence and regulatory approval - is expected to occur by the end of July.
Established in 1959 and headquartered in Penns Park, Pennsylvania, Better Materials is a producer of construction materials in both western Pennsylvania and eastern Pennsylvania/southern New Jersey, including the greater metropolitan areas of Philadelphia, Pittsburgh, Trenton and Atlantic City. It operates six crushed stone quarries, five sand and gravel quarries, seven asphalt plants and has over 300 employees.
Better Materials will be integrated into Hanson's Northeast aggregates region which operates in Pennsylvania and New York State. Pennsylvania is the fourth largest aggregates market in the USA and Hanson currently operates 22 quarries and three asphalt plants in this State.
Better Materials also provides Hanson with a presence in New Jersey. The southern New Jersey region combined with the southeastern Pennsylvania region is the sixth largest aggregates market in the USA. Better Materials' operations are well placed to service southern New Jersey as well as Philadelphia, the fifth largest city in the USA, and the eastern corridor which links New York City with Washington, D.C.
In the financial year ended 31 December 2002, Better Materials' unaudited sales revenue was US$115.3 million and EBITDA was US$21.1 million (excluding non-recurring items). After taking into account possible fair value adjustments, it is estimated that goodwill of approximately US$25 million (£15.9 million) will arise on this acquisition. For the year ended 31 December 2002, Better Materials shipped 9.4 million tons of aggregates and
1.8 million tons of asphalt. Permitted reserves total approximately 390 million tons and are located principally on land owned by the company.Commenting on the acquisition, Ward Nye, President of Hanson Aggregates East, said: "Better Materials is an excellent bolt-on acquisition. It comes with good assets in States which are major consumers of aggregates and which have strong population growth forecasts".
Alan Murray, Chief Executive of Hanson PLC, added: "The acquisition of Better Materials is consistent with our bolt-on acquisition strategy and our objective of developing our aggregates operations, particularly in the USA. We will continue to seek further such opportunities for growth".
ENDS