SigmaRoc (SRC ) said it has conditionally raised approximately £260 million to help fund its recently announced acquisition of Nordkalk, a wholly-owned subsidiary of Rettig Group.
The buy-and-build construction materials group announced on Thursday that it had agreed to buy Nordkalk for a total consideration of around £402 million in an acquisition which the Group says represents ‘the cornerstone for a new Northern Europe business platform.’
The acquisition, which SigmaRoc highlighted will offer immediate scale as well as revenue diversification, is expected to be significantly earnings enhancing in its first full year of ownership and the consideration represents a purchase price of 7x underlying FY20 EBITDA.
Nordkalk has generated €67 million underlying EBITDA and €61 million net operating cash flow for the year ended 31 December 2020 and to date has achieved EBITDA margins in excess of 15% for the last 15 years, with an underlying FY20 EBITDA margin of 24.2%.
Commenting on the Acquisition, Max Vermorken, CEO of SigmaRoc, said: "The Acquisition of Nordkalk, Northern Europe's leading limestone products company, is a great stepping stone in the evolution of our group, expanding our footprint across Northern European markets.”
Today, and to help pay for the acquisition, SigmaRoc announced that it had successfully raised around £260m by issuing 305,882,352 new ordinary shares at a price of 85p. A further £1.6m was raised by selling shares at the placing price through the PrimaryBid platform.
Shares in SigmaRoc have increased by over 40% in value since the beginning of 2021. The stock was trading 3.35% higher this morning at 92.5p following the announcement.
The Company informed investors that the rest of the cash element of the consideration will come from the group drawing down £128 million of a new £305 million banking facility.
Following the acquisition’ execution, SigmaRoc said the enlarged group would be ‘a market-leading quarried materials group’ in Northern Europe, operating across six platforms, with 37 quarries and 76 operations across 13 countries, pro forma total assets of £740 million, over 1 billion tonnes of Reserves and Resources, and approximately 1,760 employees.
SigmaRoc said the acquisition “meets all of its stringent investment criteria as a self-contained and asset-backed business, which will bring significant earnings growth and cash generation.”
Over the past five years, SigmaRoc has seen an increase of in excess of 450% in market capitalisation and an increase in EPS of in excess of 300% from 10 successful acquisitions.
Speaking today, Vermorken said, "I am delighted to see many of our existing shareholders continuing to offer their support for SigmaRoc and our buy-and-build strategy, as well as the quality of new shareholders which underpins confidence in our plans for the future. The acquisition of Nordkalk enables SigmaRoc significantly to expand its footprint in the European limestone market and create further opportunities that we look forward to exploring."
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