Marshalls Regulatory News (MSLH)

Acquisition of Edenhall Holdings Limited

Marshalls plc ("Marshalls" or "the Group"), a leading hard landscaping manufacturer, announces today the acquisition of Edenhall Holdings Limited ("Edenhall"), a major UK independent concrete brick manufacturer and a leading supplier of concrete facing bricks, for an initial cash consideration of £11.8 million and deferred consideration of up to £5.4 million. The acquisition is on a cash free / debt free basis and net debt of £5.2 million has been deducted to derive the initial cash consideration.

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

"Marshalls' strategy is to grow both organically and through carefully selected earnings enhancing bolt-on acquisitions with a particular focus on those parts of the market where higher levels of growth are anticipated, including New Build Housing, Road, Rail and Water Management. The acquisition of Edenhall represents a significant step towards achieving further growth in the New Build Housing market. Edenhall is a profitable business with a strong track record of quality, reliability and service, primarily targeting builders' merchants and regional and national housebuilders. The acquisition is in line with our stated strategy of expanding into adjacent building products related to New Build Housing."

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 2017 the Group reported revenue of £430.2 million and profit before tax of £52.1 million. It has manufacturing sites in the UK and Belgium, and overseas offices in the US, Dubai and China. It employs around 2,300 people.

Edenhall was established in 1997 and generated revenue from continuing operations of £33.0 million and profit before tax of £2.8 million in the financial year ended 31 December 2017. It operates from 10 manufacturing sites across the UK employing around 250 people. It has a head office in Newport in South Wales. Edenhall manufactures and sells a range of solid and perforated concrete bricks, facings and walling products as well as a variety of cast stone products. Edenhall reported gross assets of £17.0 million at 31 December 2017.

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 Edenhall Holdings Limited. The selling shareholders comprise the former directors of Edenhall Holdings Limited. The initial consideration for the shares is £11.8 million payable in cash, subject to any adjustment for specified changes in working capital. In addition, deferred consideration is payable up to a maximum of £5.4 million and dependent on business performance over a 3 year period. The acquisition will be funded from existing Group facilities, which are being strengthened by an additional Revolving Credit Facility of £25 million with RBS. This will support the Group's existing portfolio of committed revolving credit facilities in order to maintain the Group's existing level of facility headroom.

The acquisition of Edenhall is expected to be earnings enhancing in its first full year after completion and generate returns in excess of the Group's weighted average cost of capital.

Andrew Cotton, Managing Director of Edenhall Holdings Limited, will remain with the business and will join Marshalls' senior management team.

Andrew Cotton commented that the joining of two great companies will add real value to our customers and accelerate the growth of Edenhall.

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 8.00am with a telephone dial in facility of +44 333 300 0804, access code 926 147 58#. 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 301 273 285#. 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:

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 2017.