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RNS - Acquisition of stake in GDH, Tim Hall joins board

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SigmaRoc plc / EPIC: SRC / Market: AIM / Sector: Construction & Materials

15 April 2019

SigmaRoc plc

(‘SigmaRoc’, the ‘Company’ or the ‘Group’)

Acquisition of stake in leading quarrying group GDH (Holdings) Limited (‘GDH’)

Tim Hall to join the board of SigmaRoc as a Non-Executive Director

SigmaRoc plc, the buy-and-build construction materials group, is pleased to announce it has acquired a 40 per cent. equity interest in GDH (the ‘Initial Acquisition’), a significant quarrying group located in South Wales, for a cash consideration of £4.89m (the ‘Initial Consideration’).  In addition, the Company has entered into an option agreement with the owners of GDH, whereby SigmaRoc has the exclusive right to purchase the remaining 60 per cent. of GDH (the ‘Further Acquisition’) for cash consideration of £7.5m (the ‘Further Consideration’), on or before 31 August 2020 (the ‘Option’).

The Initial Consideration has been funded through a combination of internal resources and the Group’s available credit facilities and SigmaRoc intends to fund the Further Consideration on the same basis, implying no dilution for equity holders. Assuming the Group exercises the Option, on completion of the Further Acquisition, the Company expects the Group’s Net Debt to EBITDA ratio to remain close to the current level of 2:1.



  • Acquisition of a 40 per cent. stake in leading South Wales quarrying group for £4.89m and an exclusive option to acquire remaining 60 per cent. stake for £7.5m;
  • Increases Group operations to 11 quarries, 26 operational sites with over 100m tonnes of reserves and resources across Great Britain;
  • GDH posted average revenues of £23.4m and adjusted EBITDA of £3.4m for the calendar years ended 31 December 2015, 2016 and 2017 and held assets with a book value of approximately £26m;
  • SigmaRoc intends to fund both acquisitions through internal resources and existing debt facilities without materially increasing its leverage ratios;
  • The acquisition of both the 40 and 60 per cent. stakes will be immediately earnings enhancing given the absence of dilution for equity holders; and
  • Tim Hall, former CEO of Breedon South, to join the board of SigmaRoc in April 2019 as a Non-Executive Director.

Overview of the transaction and strategic rationale

GDH (‘’) is a major quarrying, asphalt, concrete and contracting business located in South Wales. It operates 17 production facilities, including seven hardstone quarries, six concrete plants, three asphalt plants and a wharf operation, as well as four road contracting units. The business was founded by Mr. Gerald D. Harries and built into the foremost independent regional supplier by his son Ian Harries, who will continue to have an active involvement in the company going forward. An independent assessment of its mineral assets by SLR Consulting Limited has indicated close to 80m tonnes of reserves and resources. The Board believes that the total expected life of the reserves and resources of GDH is close to 100 years at the present rate of consumption.


For the calendar years ending 31 December 2015, 2016 and 2017, GDH averaged revenues of approximately £23.4m, adjusted EBITDA of approximately £3.4m. As at 31 October 2018, GDH held assets with a book value of approximately £26m and net assets of approximately £13m.

SigmaRoc’s acquisition of an initial 40 per cent. stake for the Initial Consideration will see it become a minority shareholder in GDH. The Option, pursuant to which SigmaRoc has the exclusive right, at its sole discretion, to acquire the remaining 60 per cent. of GDH for the Further Consideration on or before 31 August 2020, was agreed in conjunction with the Initial Acquisition and carries a cost of £0.3m in addition to the Further Consideration.

SigmaRoc has also agreed to pay Ian Harries, Janet Philips and Westerby Trustee Services Limited (the ‘Sellers’), a royalty of 40 pence per tonne (on a per tonne consumed basis) in relation to GDH’s further mineral resources (the ‘Royalty’). The Royalty will be subject to guaranteed minimum payments of approximately £0.16m per annum. The aggregate Royalty is subject to a cap of £10m over 12 years.

Should SigmaRoc not exercise the Option by 31 August 2020, Ian Harries and Janet Philips, the existing directors of GDH, have the right to purchase the Company’s 40 per cent. interest in GDH for not less than £3.5m.

David Barrett and David McClelland will join the GDH board, alongside Ian Harries and Janet Philips, who will continue in their current roles. A shareholders’ agreement between SigmaRoc, GDH, the Sellers and Gerald D. Harries and Sons Limited, has been executed and provides customary protections to SigmaRoc as a minority shareholder in GDH.

On completion of the Further Acquisition, SigmaRoc expects that its total gearing will remain at or around two times Net Debt to EBITDA, in-line with the Company’s self-imposed target, having absorbed, wound down or refinanced GDH’s existing credit and financing facilities. SigmaRoc does not currently anticipate that it will require further equity funding to finance the Further Consideration by 31 August 2020.

The Initial Acquisition expands SigmaRoc’s third Platform in South Wales, which it started through the acquisition of Foelfach High PSV quarry earlier in 2018.


Tim Hall to join the board of SigmaRoc as a Non-Executive Director

SigmaRoc is pleased to announce that, subject to completion of customary directorate appointment regulatory due diligence, Tim Hall will be joining its board as a Non-Executive Director. Pursuant to the relationship agreement dated 14 December 2016 between Pula Investments Limited, Bailiwick Investments Limited, TEMK Investments Limited, Ravenscroft Limited (together, the ‘Shareholders’), the Company and Strand Hanson Limited, Tim joins the board as a representative of the Shareholders.

Tim has spent his entire career in the aggregates industry, most recently as CEO of Breedon South, a business he helped build from inception. Prior to this he was director of Tarmac Limited’s Western Area; managing director of Tarmac Western Limited, the company formed by Anglo American from the former assets of Nash Rocks, Tilcon and Tarmac. He spent the previous 27 years with Nash Rocks, latterly as managing director.

Tim brings a wealth of experience and knowledge of the industry to the board of SigmaRoc and will be an asset in its continued development as he has been with Breedon. In particular Tim’s knowledge and network within the industry will benefit SigmaRoc’s growth in the aggregates and construction materials market in the UK. It is anticipated that Tim’s appointment will be ratified at the Company’s April board meeting and a further announcement will be made in due course.


Notification of Results

SigmaRoc will announce its results for the period ended 31 December 2018 on Thursday,16 May 2019.


David Barrett, Executive Chairman, commented:

“GDH is a great business with a substantial asset footprint spanning across South Wales.  GDH will be the heart of our South Wales platform.  It is a business with a long history of success and much future potential.  Ian Harries’ continued involvement will assist us in delivering growth across the platform for the benefit of our shareholders."

“I would also like to welcome Tim to the board of the Company. Tim will be joining us at an exciting time in our evolution having just closed a significant transaction. The growing SigmaRoc group of companies is now in an excellent position to benefit from Tim’s access and knowledge as one of the industry’s foremost executives.”

Max Vermorken, CEO, commented:

“I am extremely proud of what our small team has been able to achieve within only a short space of time. With GDH as part of the Group, we will operate nearly a dozen quarries, 100m tonnes of reserves and resources, close to 500 people employed, with significant skill, drive and enthusiasm within the various management teams.”

“Tim joining the board is a very positive next step for us. As a small team we all contribute to the evolution of our business and adding Tim to that mix will most certainly accelerate our development even further.”

Ian Harries, Chairman GDH, commented:


“Having been approached by several companies to buy the business - SigmaRoc was the only one we engaged with directly due to their business ethos and commitment to our workforce which has over the years been a key factor in driving the business forward.  We are very excited by SigmaRoc’s investment in us which will allow us to continue to grow the business into the future, creating job opportunities and continuing to serve our longstanding customers. The strength and depths of SigmaRoc will enable us to drive our business further for which the process has already commenced.”



Tel: +44(0)207 002 1080

Max Vermorken, CEO

Strand Hanson (Nominated and Financial adviser)

Tel: +44(0)207 409 3494

James Spinney / James Dance / Jack Botros

Liberum Capital (Joint Broker)

Tel: +44(0)203 100 2000

Neil Patel / Jamie Richards / Jonathan Wilkes-Green / William Hall

Berenberg (Joint Broker)

Tel: +44(0)203 207 7800

Ben Wright / Mark Whitmore

Investor Relations

Tel: +44(0)207 002 1080

Ben Feder

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon the publication of this announcement via Regulatory Information Service, this inside information is now considered to be in the public domain.