Marshalls Regulatory News (MSLH)

19 October 2017

ACQUISITION OF CPM GROUP LIMITED

Marshalls plc ("Marshalls" or "the Group"), a leading hard landscaping manufacturer, announces today the acquisition of CPM Group Limited ("CPM"), a pre-cast concrete manufacturer specialising in underground water management solutions, for a total cash consideration of £38.3m.

Commenting on the transaction, Martyn Coffey, Chief Executive of Marshalls, said:

"Marshalls' 2020 Strategy is to grow both organically and through carefully selected earnings enhancing bolt-on acquisitions with a particular focus on the identified growth areas of water management, security and mineral products. The acquisition of CPM represents a significant step towards achieving one of our strategic goals. CPM is a profitable business with a strong track record of quality and service, primarily targeting Public Sector and Commercial end users and the acquisition will expand Marshalls' product range into below ground drainage. We expect the business to trade, initially as Marshalls CPM, within the wider Marshalls Group."

Background

Marshalls manufactures and distributes hard landscaping products (concrete and natural stone paving), minerals including aggregates, ready mix mortar and street furniture. In the year ended 31 December 2016 the Group reported revenue of £396.9m and profit before tax of £46.0m. It has manufacturing sites in the UK and Belgium, and overseas offices in the US, Dubai and China. It employs around 2,200 people.

CPM was established in 2004 and reported revenue of £51.2m and profit before tax of £4.6m in the financial year ended 31 December 2016. It operates from two manufacturing sites at Mells, in Somerset, and Pollington, near Goole in East Yorkshire, with ancillary offices in the Midlands and Scotland, employing around 350 people. CPM manufactures and sells concrete pipes, containment and inspection chambers, manhole covers, retaining walls and other bespoke industrial concrete products for the construction sector, including new housebuilding and major infrastructure projects such as Hinkley Point A, HS2 and A14 Cambridge. CPM reported gross assets of £33.0m as at 31 December 2016.

The Transaction

Under the terms of the acquisition, Marshalls Mono Limited (a wholly owned subsidiary of Marshalls plc) has agreed to acquire 100% of the issued share capital of CPM Group Limited. The selling shareholders comprise the former directors of CPM Group Limited and/or the trustees of their family pension schemes. The consideration for the shares is £38.3m payable in cash, subject to any adjustment for specified changes in working capital. The acquisition will be funded from existing Group facilities.

The acquisition of CPM is expected to be earnings enhancing in its first full year after completion.

Mike Stacey, former Managing Director of CPM, will remain with the business and will join Marshalls' senior management team, reporting to Martyn Coffey.

The information contained within this Announcement is deemed by the Group to constitute inside information as stipulated under the Market Abuse Regulation. Upon the publication of this Announcement via a regulatory information service, this inside information is now considered to be in the public domain.

Conference Call

There will be a conference call for analysts and investors today at 7.30am with a telephone dial in facility of +44 333 300 0804, access code 853 989 59#. There will also be a playback facility available for analysts and investors who are unable to dial in +44 (0) 333 300 0819, access code 301 207 810#. A Marshalls' Presentation will be available for analysts and investors who are unable to dial in. The presentation can be viewed on Marshalls' website at www.marshalls.co.uk.

Enquiries:

Martyn Coffey Chief Executive Marshalls plc 01422 314777

Jack Clarke Group Finance Director Marshalls plc 01422 314777

Andrew Jacques MHP Communications 020 3128 8540

Forward-Looking Statements:

Any statements in this release, to the extent that they are forward-looking, are subject to risk factors associated with, amongst other things, the economic and business circumstances occurring from time to time in the markets in which Marshalls operates. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a wide range of variables which could cause actual results to differ materially from those currently anticipated. More information about the factors that may affect Marshalls' performance is contained in the Annual Report to shareholders for the year ended 31 December 2016.