Ray O鈥橰ourke has also signed a five-year deal with Bison鈥檚 new owner Forterra
Laing O鈥橰ourke has sold its precast concrete business Bison Manufacturing to building products manufacturer Forterra for 拢20 million.
The two firms have also formed a five-year partnership which will see Laing O鈥橰ourke continue to use Bison products on its projects.
Ray O鈥橰ourke, chief executive of Laing O鈥橰ourke, said the growing demand across the residential, commercial and infrastructure sectors for manufactured products made this the 鈥渞ight time鈥� for the sale.
鈥淲e acquired Bison at the height of the global financial crisis, saving hundreds of regional jobs and allowing the manufacturer鈥檚 rich history to continue. Now, this collaborative and future-focussed deal will provide enhanced value to Laing O鈥橰ourke, Bison and Forterra,鈥� he said.
鈥淭his partnership is part of our commitment to build a more collaborative industry centred on high-quality, off-site modular construction,鈥� he added.
Forterra is to fund the acquisition from its existing cash balances and expects the sale to complete in the third quarter of this year.
The firm said the acquisition provided it with the opportunity to take a leading position in the UK precast concrete market whilst also expanding its capacity-constrained business.
Founded in 1919, Bison had been part of Laing O鈥橰ourke鈥檚 manufacturing portfolio since 2008. Its automated manufacturing facility at Swadlincote in Derbyshire opened in 2006 to provide a range of bespoke precast concrete products.
Forterra said that the plant has been operating at 鈥渁 little more than 50% capacity utilisation鈥�.
It added that Bison had made a loss of 拢1.1m on earnings before interest, taxes, depreciation and amortization, revenues of 拢22.8m and a net book value of 拢10m for the year ended 31 March 2017 according to the financial statements of Laing O鈥橰ourke.
However, Forterra expects to be able to more than make back the cost of the acquisition by 2019 through efficiency improvements, proposed consolidation of production between sites and leveraging procurement synergies.
Stephen Harrison, chief executive at Forterra, said: 鈥淭he acquisition is a unique opportunity to transform Forterra鈥檚 precast business in terms of scale and capability.
鈥淲e are acquiring well invested assets whilst at the same time solving the capacity constraints on growth within our own business. We gain a well-respected brand and will attain a market leading position as we look to grow the combined business,鈥� he added.
鈥淲e are confident that the acquisition will create value for our shareholders鈥�.
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