Sigmaroc. Regulatory News (SRC)

4 March 2024

(EPIC: SRC / Market: AIM / Sector: Construction Materials)

SIGMAROC PLC

 ('SigmaRoc', the 'Group' or the 'Company')

Notice issued of exercise of the call option to acquire CRH's UK Lime operations

SigmaRoc, the AIM quoted lime and limestone group, is pleased to announce that the Group has issued notice of exercise of the call option, entered into on 22 November 2023 (the "UK Call Option"), to acquire the UK lime operations of CRH plc (the "UK Target") (the "Deal 2 Acquisition") for a total consideration of ?155 million (approximately £133 million). Completion of the Deal 2 Acquisition is expected by the end of March 2024.

As announced on 23 November 2023, alongside the conditional acquisition of CRH's lime businesses in Germany, Czech Republic and Ireland, the Company entered into the call options which granted it the right to acquire the UK Target, as well as CRH's lime operations in Poland (the "Polish Target") at a future date. Following completion of the acquisition of the Deal 1 Targets on 4 January 2024 and of the separation process in the UK, the Company has issued notice to exercise the UK Call Option.

The UK Target comprises CRH's Tarmac Shelfco Limited entity, the leading producer of lime products in the UK. Founded in 1891 and headquartered in Buxton, Derbyshire, the business operates from sites in Tunstead and Hindlow, with a total of 5 permitted kilns. In the year ending 31 December 2022, the UK Target generated revenue of ?105.4m and operating profit of ?19.5m. The consideration payable for the Deal 2 Target will be satisfied by a draw down under the New Facilities.

The Company is pleased with the progress to date on the integration of the Deal 1 Targets, being the German, Czech and Irish entities, and will provide a further update alongside its results for the year ended 31 December 2023.

Highlights of the Acquisitions

· Provide an opportunity to become Northern Europe's leader in lime and a key supplier to the structural growth markets critical for the green transition.

· Lime and limestone are key resources in the transition to a more sustainable economy. New applications for lime and limestone products as part of a drive for sustainability include the production and recycling of lithium batteries, the decarbonisation of construction including through substitution of cementitious material and new building materials, and environmental applications including lake liming, air pollution and direct air capture.

· The lime market is expected to continue to grow and to be worth ?1.9 billion in 2031 across the Enlarged Group's markets.

· Pro forma revenue of the Enlarged Group for FY22 would be £1 billion with underlying EBITDA of £211 million (assuming, in each case, exercise of the UK Call Option and Polish Call Option).

· The Enlarged Group is expected to be significantly cash generative with a free cash flow target in excess of £100 million per annum which is expected to enable the Enlarged Group to de-gear at a rate of 0.5x per year with target leverage of 1.0x.

· The Targets, together, have a consistent performance track record delivering FY22 revenue of ?579.7 million and EBITDA of ?133.7 million and EBITDA margin in excess of 20 per cent.

· Expected to deliver revenue growth opportunities and cost synergies resulting in at least ?30 million of EBITDA contribution by 31 December 2027.

· The Targets are aligned with SigmaRoc's ESG and net zero ambitions.

Defined terms used throughout this announcement have the meanings set out in the admission document published by the Company on 23 November 2023 unless the context requires otherwise.

Information on the Company is available on its website, www.sigmaroc.com.

For further information, please contact:

About SigmaRoc plc:

SigmaRoc is an AIM-quoted lime and limestone group targeting quarried materials assets in the UK and Northern Europe.

Lime and limestone are key resources in the transition to a more sustainable economy. New applications for lime and limestone products as part of a drive for sustainability include the production and recycling of lithium batteries, the decarbonisation of construction including through substitution of cementitious material and new building materials, and environmental applications including lake liming, air pollution and direct air capture.

SigmaRoc seeks to create value by purchasing assets in fragmented materials markets and extracting efficiencies through active management and by forming the assets into larger groups. It seeks to de- risk its investments through the selection of projects with strong asset backing.