1 July 2021
Adbri Limited (“Adbri” or “the Company”) (ASX: ABC) is pleased to announce the Company’s Mawsons joint venture (“Mawsons”) has signed an agreement to purchase the Milbrae concrete and aggregate business (“Milbrae”).
Founded in 1969 by the Woods family, Milbrae has grown to operate 13 quarries and seven fixed concrete plants, and is forecast to generate revenue of circa $85 million for the year to the end of June 2021. From locations surrounding its head office in Leeton, the Milbrae business is a leading supplier of necessary materials for local building and infrastructure construction throughout the Riverina region of New South Wales. The business also provides contract crushing services to the mining sector.
Mawsons, a 50:50 joint venture between Adbri’s wholly owned subsidiary and BA Mawson Pty Limited, operates 22 quarries and 41 concrete plants throughout regional Victoria and southern New South Wales. Milbrae represents a complementary acquisition to the existing Mawsons business, expanding its geographic footprint in southern New South Wales.
Milbrae’s employees will transition to Mawsons as part of the acquisition agreement.
The acquisition is highly accretive to Mawsons at a multiple which represents 4.3 times forecast 2021 earnings before interest, tax, depreciation and amortisation. The acquisition will be funded by Mawsons through existing cash holdings and an external debt facility.
The agreement to acquire the Milbrae business is subject to conditions precedent that are customary in a business acquisition of this type, size and complexity, including satisfactory transfer of operating licences to Mawsons. The transaction is effective 1 July 2021, subject to completion which is anticipated in the third quarter of 2021.
Adbri’s Chief Executive Officer, Mr Nick Miller, said “The agreement to purchase the concrete and aggregate operations of Milbrae represents a unique opportunity to expand the geographic footprint of the Mawsons business. The Milbrae business is a significant and complementary acquisition for the Mawsons business.
We understand the needs of our regional customers, employees and suppliers and we look forward to working with Milbrae’s stakeholders as we bring these two great businesses together. Mawsons will continue Milbrae’s commitment to providing excellent customer service through the consistent and reliable supply of products and services.
Mawsons has been an integral part of Adbri’s downstream concrete and aggregate business since acquiring our 50% interest in 2007. Since our initial investment, Mawsons has grown through acquisitions and organic projects into a key supplier of construction materials through regional Victoria and southern New South Wales.”
Authorised for release by Marcus Clayton, Company Secretary.
For further information please contact:
General Manager Corporate Finance and Investor Relations
+61 417 814 290
Jon Snowball Domestique
+61 477 946 068