REG - SigmaRoc PLC - Exercise of Option on UK Lime Operations

SigmarocAnnouncement

04/03/2024 07:00

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RNS Number : 3624F  SigmaRoc PLC  04 March 2024

4 March 2024

 

(EPIC: SRC / Market: AIM / Sector: Construction Materials)

 

SIGMAROC PLC

 ('SigmaRoc', the 'Group' or the 'Company')

 

Notice issued of exercise of the call option to acquire CRH's UK Lime
operations

 

SigmaRoc, the AIM quoted lime and limestone group, is pleased to announce that
the Group has issued notice of exercise of the call option, entered into on 22
November 2023 (the "UK Call Option"), to acquire the UK lime operations of CRH
plc (the "UK Target") (the "Deal 2 Acquisition") for a total consideration of
€155 million (approximately £133 million). Completion of the Deal 2
Acquisition is expected by the end of March 2024.

 

As announced on 23 November 2023, alongside the conditional acquisition of
CRH's lime businesses in Germany, Czech Republic and Ireland, the Company
entered into the call options which granted it the right to acquire the UK
Target, as well as CRH's lime operations in Poland (the "Polish Target") at a
future date. Following completion of the acquisition of the Deal 1 Targets on
4 January 2024 and of the separation process in the UK, the Company has issued
notice to exercise the UK Call Option.

 

The UK Target comprises CRH's Tarmac Shelfco Limited entity, the leading
producer of lime products in the UK. Founded in 1891 and headquartered in
Buxton, Derbyshire, the business operates from sites in Tunstead and Hindlow,
with a total of 5 permitted kilns. In the year ending 31 December 2022, the UK
Target generated revenue of €105.4m and operating profit of €19.5m. The
consideration payable for the Deal 2 Target will be satisfied by a draw down
under the New Facilities.

 

The Company is pleased with the progress to date on the integration of the
Deal 1 Targets, being the German, Czech and Irish entities, and will provide a
further update alongside its results for the year ended 31 December 2023.

 

Highlights of the Acquisitions

 

·      Provide an opportunity to become Northern Europe's leader in lime
and a key supplier to the structural growth markets critical for the green
transition.

·      Lime and limestone are key resources in the transition to a more
sustainable economy. New applications for lime and limestone products as part
of a drive for sustainability include the production and recycling of lithium
batteries, the decarbonisation of construction including through substitution
of cementitious material and new building materials, and environmental
applications including lake liming, air pollution and direct air capture.

·      The lime market is expected to continue to grow and to be worth
€1.9 billion in 2031 across the Enlarged Group's markets.

·      Pro forma revenue of the Enlarged Group for FY22 would be £1
billion with underlying EBITDA of £211 million (assuming, in each case,
exercise of the UK Call Option and Polish Call Option).

·      The Enlarged Group is expected to be significantly cash
generative with a free cash flow target in excess of £100 million per annum
which is expected to enable the Enlarged Group to de-gear at a rate of 0.5x
per year with target leverage of 1.0x.

·      The Targets, together, have a consistent performance track record
delivering FY22 revenue of €579.7 million and EBITDA of €133.7 million and
EBITDA margin in excess of 20 per cent.

·      Expected to deliver revenue growth opportunities and cost
synergies resulting in at least €30 million of EBITDA contribution by 31
December 2027.

·      The Targets are aligned with SigmaRoc's ESG and net zero
ambitions.

 

Defined terms used throughout this announcement have the meanings set out in
the admission document published by the Company on 23 November 2023 unless the
context requires otherwise.

 

Information on the Company is available on its website, www.sigmaroc.com
(http://www.sigmaroc.com) .

 

 

For further information, please contact:

 

 SigmaRoc plc                               Tel: +44 (0) 207 002 1080

 Max Vermorken (Chief Executive Officer)

 Garth Palmer (Chief Financial Officer)     ir@sigmaroc.com (mailto:ir@sigmaroc.com)

 Tom Jenkins (Head of Investor Relations)

 Liberum Capital (Nomad and Co-Broker)      Tel: +44 (0) 203 100 2000

 Dru Danford / Ben Cryer / John More

 Peel Hunt (Co-Broker)                      Tel: +44 (0) 20 7418 8900

 Mike Bell / Ed Allsopp

 Walbrook PR Ltd (Public Relations)         Tel: +44 20 7933 8780  sigmaroc@walbrookpr.com

 Tom Cooper / Nick Rome                     Mob: +44 7971 221972

 

About SigmaRoc plc:

 

SigmaRoc is an AIM-quoted lime and limestone group targeting quarried
materials assets in the UK and Northern Europe.

 

Lime and limestone are key resources in the transition to a more sustainable
economy. New applications for lime and limestone products as part of a drive
for sustainability include the production and recycling of lithium batteries,
the decarbonisation of construction including through substitution of
cementitious material and new building materials, and environmental
applications including lake liming, air pollution and direct air capture.

 

SigmaRoc seeks to create value by purchasing assets in fragmented materials
markets and extracting efficiencies through active management and by forming
the assets into larger groups. It seeks to de- risk its investments through
the selection of projects with strong asset backing.

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