SigmaRoc more than doubles in size with takeover of Finnish limestone quarries group


SigmaRoc PLC (LON:SRC), the buy-and-build construction materials group, conditionally agreed to purchase Nordkalk, a wholly-owned subsidiary of Rettig Group.

SigmaRoc, which has a market capitalisation of around GBP250mln, agreed to pay about GBP402mln for the Finnish limestone developer in what is classified by AIM as a reverse takeover.

The AIM-quoted group will issue around EUR50mln (roughly GBP43mln) of shares to Rettig with the rest of the consideration to be satisfied through cash.

To help pay for the acquisition, SigmaRoc raised around GBP260mln by placing shares at 85p a pop; an additional GBP1.6mln was raised by selling shares at the placing price through the PrimaryBid platform. The rest of the cash element of the consideration will come from the company drawing down EUR150mln (GBP128mln) of a new GBP305mln banking facility.

Rettig Group has agreed to a lock-up period of 12 months for the SigmaRoc shares it is receiving.

SigmaRoc said the acquisition is expected to be “significantly earnings enhancing” in the first full year of ownership. The purchase price is about seven times Nordkalk’s underlying earnings (EBITDA) for 2020.

The board of SigmaRoc believes the acquisition will represent the cornerstone for a new Northern Europe business platform, offering immediate scale and revenue diversification.

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 GBP740mln, over 1bn tonnes of reserves and resources, and about 1,760 employees.

The company is seeking shareholder approval to implement a long term incentive plan “to ensure alignment of management and shareholders’ interests”.

Max Vermorken, the chief executive of SigmaRoc, said the acquisition of Nordkalk represented “a great stepping stone” in the evolution of the group.

“We have agreed to purchase a high-quality business at what we believe is the right point in the cycle and at an attractive valuation. The acquisition meets all of our stringent investment criteria as a self-contained and asset-backed business, which will bring the group significant earnings growth and cash generation. We look forward to helping Nordkalk and its experienced management team on its path to continued success, as we seek to perpetuate its 120-year history, name and success,” Vermorken said.

“It’s hard to acquire a business of this type and this scale.” Vermorken told Proactive.

David Barrett, the executive chairman of SigmaRoc, described Nordkalk as “a great business with a substantial asset footprint spanning across Northern Europe”.

“It is a business with a long history of success and much future potential. This acquisition would create numerous new opportunities for SigmaRoc to capitalise on in the months and years ahead. I am delighted with the Rettig family’s commitment, agreeing to become a shareholder of SigmaRoc. This is a strong sign of confidence in the future of our group,” Barrett said.

Barrett subscribed for 400,000 shares in the share placing, and will hold 0.47% of the enlarged share capital (down from 0.93% of the share capital before the share issue) and Vermorken bought 123,528 shares; his stake drops to 0.11% from 0.2%. Other directors and senior managers also subscribed for new shares.

M&G Investment Management bought GBP22mln worth of shares and has a stake of around 8.63% of the existing share capital.


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