One of the country’s oldest brick companies has been sold to the American private equity firm Bain Capital.
Bain has agreed a £414m deal with FTSE-listed construction products company CRH to buy four divisions, including Ibstock, which makes more than 900m bricks a year at 24 plants.
Ibstock takes its name from the Leicestershire village which was the site of its first brickworks in 1830. The company has grown to become one of the UK’s biggest brickmakers and was bought by Dublin-based CRH in 1999. In 2013, Ibstock generated pre-tax profits of £16m and employed almost 2,000 people.
Bain is paying CRH £295m in cash and has agreed to take on its pension and debt liabilities. The deal is expected to be completed in the first half of next year, subject to regulatory approval.
Like other brickmakers, Ibstock was forced to mothball factories and lay off workers during a recession that saw brick production sink to its lowest level since the 1940s. The company’s fortunes have been partly revived by an upturn in the housing market that has resulted in brick shortages. Ibstock has been reopening factories and expects to produce 200m more bricks in 2014, compared with the previous year.
The announcement of the Ibstock sale coincided with a trading update from rival Michelmersh bricks, which said it expected to exceed expectations on 2014 profits as a result of strong trading conditions.
CRH, which is one of the world’s largest construction products companies and employs 75,000 people, is also selling its US business Glen-Gery, as well as UK concrete products companies Forticrete and Supreme Concrete. The firm is retaining £30m in real estate from the divisions for “future disposal”.
Bain Capital shot to public attention when its co-founder Mitt Romney made an unsuccessful bid for the White House in 2012, sparking off furious debate in the US about whether the private equity firm was a “job destroyer” or work creator. Beyond the headlines, Bain owns scores of companies in industries ranging from energy to healthcare to restaurants. In the UK its sprawling portfolio includes Brakes food distribution company and Securitas Direct, a burglar alarm company. In a deal that raised concerns for business minister Vince Cable, Bain took control of Plasma Resources UK in 2013, following the controversial privatisation of the state-owned blood plasma company by the coalition government.
Bain, which has around $80bn in assets under management, has also been looking at buying cement assets from Lafarge and Holcim, according to confidential sources cited by Bloomberg.
