CONSTRUCTION veteran Kevin Lagan has entered into an agreement to sell most of his Lagan Group assets to AIM-listed British construction materials company Breedon Group for £455 million on a cash and debt free basis.
The deal sees Breedon acquire Whitemountain, Lagan Cement, Lagan Brick, Lagan Asphalt and Welsh Slate, although Lagan Homes does not form part of the sale.
Breedon has an established relationship with Lagan Group, having operated a successful joint venture with its Whitemountain business in Scotland.
The combination of Breedon and Lagan’s materials interests will create a workforce of 3,000 and turnover of more than £900m.
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. By 2002, however, the siblings Kevin and Michael went their separate ways.
Kevin Lagan (68), as chairman, 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: "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.”
Breedon chief exec Pat Ward says Lagan is not a business where he's seeking to strip out costs but rather sees it as a platform for growth.
— JPCampbellBiz (@JP_Biz) April 17, 2018
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.”
Mr Ward says Jude Lagan, Terry Lagan & Mark Kelly will be staying with the business.
— JPCampbellBiz (@JP_Biz) April 17, 2018
Kevin Lagan and his family intend to pursue a managed growth strategy with the Lagan Homes and FastHouse businesses, which are being retained.
Lagan Homes, one of the largest house-builders in Northern Ireland, with a long-standing reputation for delivering quality homes, has plans to develop its markets in Ireland and Britain, where it has established a strong regional presence.
The acquisition of Kevin Lagan's Lagan Group comes weeks after it was announced that four firms within Michael Lagan's Lagan Construction Group had gone into administration, putting 200 jobs at risk.
