- Brickworks has grabbed a bigger chunk of the U.S. market with a $70 million purchase of Redland Brick
- The buy gives Brickworks access to four manufacturing sites in the States, with sales of roughly 80 million bricks per year
- The is part of Brickworks’ U.S. expansion strategy which saw the company rake in record profits over the 2019 financial year
- Brickworks is up nearly three per cent on the market today, with shares trading for $18.54 each
ASX 200-listed Brickworks is trading strong today after announcing the $70 million purchase of U.S.-based Redland Brick.
The purchase gives Brickworks access to four manufacturing sites across the States, with two based in Maryland and one each in Pennsylvania and Virginia.
According to Brickworks, these sites rake in sales of roughly 80 million bricks per year. The purchase is set to be finalised in February 2020.
Brickworks will fork out roughly $50 million upfront, with the remaining cash to be in deferred payments subject to certain conditions being met.
On top of the total capacity of 250 million bricks per year from Redland, the purchase is also expected to deliver a three per cent earnings per share (EPS) accretion within three years, according to Brickworks.
Brickworks Managing Director Lindsay Partridge welcome Redland to the Brickworks family.
“With a suite of well-recognised brands, including the highly renowned Cushwa handmade and moulded bricks, the acquisition will further extend our industry-leading range and premium product positioning,” Lindsay said.
Today’s buy is part of Brickworks’ plan to expand across North America — a strategy which saw the industrial building company hit record-high profits over the 2019 financial year.
It follows the buyout of Iowa-based Sioux City Brick in August, and Glen-Gary in November last year.
This means come February next year — when the dust is expected to settle on the Redland purchase — Brickworks will have over 12 operating brick plants, more than 1000 employees, and sales of roughly 400 million bricks per year to bring in $290 million in sales revenue.
“We have quickly established a strong position as the largest brick-maker in our key target market — the architecturally focussed Northeast, Midwest and Mid-Atlantic regions of the United States,” Lindsay said.
“The next priority for the business will be the effective integration of the Redland operations, and delivering already identified cost reduction initiatives,” he said.
Brickworks is up nearly three per cent on the market today, with shares trading for $18.54 each in a $2.78 billion market cap at 2pm AEDT.