Lagan Group's acquisition by Breedon creates £1 billion construction giant
CONSTRUCTION veteran Kevin Lagan has sold off most of his Lagan Group assets to UK construction group Breedon for £455 million, creating a new near billion pound industry giant.
Breedon, which is based in Leicestershire (and which is listed on the AIM market), has acquired Whitemountain, Lagan Cement, Lagan Brick, Lagan Asphalt and Welsh Slate.
But Mr Lagan's other key business - Lagan Homes - is not part of the deal, which is one of the biggest in Northern Ireland in recent years.
The combination of Breedon and Lagan's materials interests will create a workforce of 3,000 and turnover of more than £900 million.
Lagan Group was formed in the 1960s on the outskirts of Belfast by Kevin's father Peter Lagan when he opened his first quarry at Whitemountain.
His two sons Kevin and Michael took over the running of the business, expanding the group aggressively, though they have since gone their separate ways in business.
The acquisition of Kevin Lagan's Lagan Group comes weeks after it was announced that four firms within Michael Lagan's Lagan Construction Group - which had been working on the new Ulster University campus in Belfast - had gone into administration, putting 200 jobs at risk.
As chairman of Lagan Group, Kevin Lagan has been a driving force behind the business for over 40 years, growing its turnover to £272 million, with combined earnings of approximately £55 million in 2017.
Lagan is a leading supplier of construction materials and contract surfacing in Ireland and the UK with a modern cement plant in Kinnegad, nine active quarries, 13 asphalt plants and nine ready-mixed concrete plants.
Confirming the sale, he said: “Our committed and passionate staff at Lagan Group have contributed significantly to the development and growth of the business, differentiating us from our competition in all of the markets in which we operate.
"I'd like to thank the staff for the role they have played in the growth of Lagan Group, and I wish them every success as they enter an exciting new chapter with Breedon, who I am confident will build on that success, supporting the development of the business in the years ahead.”
Breedon's executive chairman Peter Tom said: “Over the last eight years we have pursued a successful buy-and-build strategy which has established us as the largest independent construction materials business in the UK and the acquisition of Lagan is another strategic step for us.
"We believe it has the potential to add significantly to the group's performance and prospects and we are looking forward to working with our new colleagues to deliver further value for our investors.”
Pat Ward, Breedon's group chief executive, added: “Lagan represents a unique opportunity to enter a growing market with immediate scale and excellent opportunities for expansion.
"It significantly strengthens our cement offer, adds to our mineral and downstream resources, brings us a bitumen import/export business and adds real weight to our contract surfacing operations.
“Lagan is well-run, well-invested, with an experienced management team and a strong track record. Its culture is complementary to our own, with a sharp focus on customer service, a first-class workforce and a commitment to safety, which is a key priority for us.
“From a strategic perspective, it provides us with a stronger platform from which to pursue further organic growth and bolt-on acquisitions.”
Kevin Lagan and his family intend to pursue a managed growth strategy with the Lagan Homes and FastHouse businesses, which are being retained.