Ibstock Sells Glen-Gery to Brickworks Limited
According to Ibstock, this disposal further strengthens its balance sheet and leaves it well-positioned to invest to deliver long-term growth as the group focuses on its core markets in the UK.
Ibstock plc recently announced the sale of the entire issued share capital of Glen-Gery, its U.S. brick manufacturing business, to Brickworks Limited for an enterprise value of $110 million on a debt-free, cash-free basis. As part of the transaction, Brickworks Limited will assume certain liabilities, including an associated pension liability; the net cash inflow for Ibstock is expected to be approximately $95 million, subject to any closing account adjustments.
The proceeds received by Ibstock will reportedly be used to repay debt. According to Ibstock, this disposal further strengthens its balance sheet and leaves it well-positioned to invest to deliver long-term growth as the group focuses on its core markets in the UK.
“At the interim results in August, we announced that we were undertaking a strategic review of certain aspects of our business, including our U.S. operations, with a further update to be given at the full year results in March 2019,” said Joe Hudson, Ibstock CEO. “We have concluded that opportunities to grow the U.S. business are not in line with our overall strategic objectives, and the decision was taken to dispose of these assets and refocus the group on its core markets here in the UK. Following a competitive process, we believe that this is the best outcome for both Glen-Gery and Ibstock plc.
“I would like to thank our colleagues at Glen-Gery for their hard work and professionalism, and we wish them the very best for the future. This divestment augments our strong underlying cashflow generation, leaving us with a strong balance sheet. Our capital allocation and shareholder return priorities remain unchanged, and we continue to assess both organic and inorganic investment options in the UK as we look to deliver long term growth.”