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[March 2006]
Hanson Acquires Material Service Corporation
Hanson PLC, the international building materials company, has announced that it has signed a contract to acquire Material Service Corporation from General Dynamics Corporation for US$300 million (£170 million) in cash. Completion of the acquisition, which is subject to final due diligence and regulatory approval, is anticipated to occur in the second quarter of 2006.Headquartered in Chicago, IL, USA, Material Service is the thirteenth largest producer of aggregates in the USA. Established in 1919 by the Crown family, it merged with General Dynamics in 1959. Material Service employs more than 800 people and operates ten crushed stone quarries and three sand and gravel quarries. The company's primary market is Illinois, including the greater metropolitan area of Chicago. Illinois is the fifth largest aggregates market in the USA. Three of the crushed stone locations are in western Indiana.
Material Service is ranked first or second in all of the markets it serves. In 2005, it sold over 20 million US tons of aggregates and is estimated to have approximately 1.5 billion tons of aggregate reserves. In the financial year to 31 December 2005, Material Service's audited sales revenue was approximately US$160 million, gross assets were approximately US$120 million and EBITDA was approximately US$40 million.
This acquisition should increase Hanson's annual aggregates volume in the USA by around 15% and reinforces its position as one of the leading US aggregates producers. The acquisition is expected to be earnings enhancing for Hanson in the first full year of ownership and will be financed from existing borrowing facilities.
Jim Kitzmiller, President of Hanson Aggregates North America, commented: "This is an important acquisition for Hanson, taking us into Illinois for the first time and extending our presence in Indiana. Adding Material Service's people and assets to our group provides new and exciting opportunities for further development in the north central US area."
Alan Murray, Chief Executive of Hanson PLC, added: "Material Service has a long history as a premier construction materials company. This acquisition strengthens our US footprint and reinforces our position as one of the leading aggregates producers in the USA."
ENDS