Page 28 - Sigmaroc Annual-Report 2023

SIGMAROC ANNUAL REPORT 2023
CRH Lime Acquisitions
On 22 November 2023, the Company announced the conditional and transformational acquisition of a comprehensive portfolio of European lime and industrial limestone assets from CRH, alongside a £200m equity fundraising and new €875m debt facility.
The acquisitions are independent of each other, but on a combined basis represent a total consideration of €1bn, with €825m initial and €175 million deferred consideration. The acquisitions are structured as follows (with Deal 1, Deal 2 and Deal 3 collectively representing the ‘Acquisitions’):
• CRH Deal 1
Comprises German, Czech and Irish lime and industrial limestone businesses for a total consideration of €745m, subject to customary purchase price adjustments. The consideration satisfied by a combination of €230m from gross equity proceeds, €350m drawdown from the new debt facility and €75m deferred consideration.
Due to its size, Deal 1 comprised a reverse takeover of the Company under the AIM Rules for Companies and was therefore conditional on Shareholder approval, which was obtained at a general meeting held on 11 December 2023. Deal 1 has been completed on 4 January 2024, bringing to the Group 1 billion tonnes of reserves, over 850 employees, and annualised revenues of over €350m. The addition of these assets transforms the scale of the Group’s industrial minerals business and is expected to unlock significant financial, operational and strategic benefits.
• CRH Deal 2
Consists of the UK lime operations of CRH for a total consideration of €155m, to be satisfied entirely by drawdown from the new debt facility. Deal 2 is subject to a call option, whereby SigmaRoc has been granted the right (but not the obligation) to acquire the UK lime operations of CRH.
The UK lime operations were integrated within other CRH businesses and have been required to be carved out into a standalone entity before they can be acquired. Deal 2 is expected to complete at the end of March 2024, with the Group having exercised its call option on 1 March 2024.
STRATEGIC REPORT
• CRH Deal 3
Consists of the Polish lime operations of CRH for a total consideration of €100m, to be funded from deferred consideration. Deal 3 is subject to a call option, whereby SigmaRoc has been granted the right (but not the obligation) to acquire the Polish lime operations of CRH.
The Polish lime operations are also integrated within other CRH businesses and similarly need to be carved out into a standalone entity before they can be acquired. Deal 3 is anticipated to complete toward the end of 3Q24 and is subject to anti-trust filings.
On an FY22 pro-forma basis the enlarged group, being SigmaRoc plus the Acquisitions, would have reported the following key metrics:
• underlying revenue in excess of £1b • underlying EBITDA of £211m
• mineral reserves of c. 2.7b tonnes
• operations in 14 countries
• over 3k employees
Strategically the Acquisitions represent an opportunity to become one of Europe’s leaders in lime, combining high quality businesses and complementary footprints, positioning the Group as either the number one or number two participant in all its key lime markets.
Lime and limestone are key resources in the transition to a more sustainable economy and lime products are natural carbon absorbers. New applications for lime and limestone products as part of a drive for sustainability include the production and recycling of lithium batteries as part of increasing electrification, the decarbonisation of construction including through substitution of cementitious material, and new building materials, and environmental applications including lake liming, air pollution control and direct air capture.
Furthermore, the Acquisitions are aligned with the Group’s ESG and net-zero ambitions, positioning the Group to be part of CCUS hubs, and giving the Group a strategic role in the decarbonisation of key industries such as steel and chemicals.
Fels kilns in Münchehof, Germany