Travers Smith LLP has advised its long standing AIM-listed client Breedon Aggregates Limited, on the £336 million acquisition of Hope Construction Materials Limited from Cortolina Investments.

Breedon is the largest independent aggregates business in the UK, employing more than 1,200 people in England, Wales and Scotland. The company supplies an extensive range of products and services to the construction and building sectors and operates 53 quarries, 26 asphalt plants and 59 ready-mixed concrete plants.

Breedon’s combination with construction materials supplier Hope will create the UK’s leading independent producer of cement, concrete and aggregates and a vertically-integrated building materials group. The acquisition is consistent with Breedon’s strategy of organic growth combined with the continuing consolidation of the smaller end of the UK heavyside building materials industry.

In addition to the acquisition, Breedon has undertaken a placing, which is not conditional upon the acquisition, of 78,782,825 new ordinary shares at 51.79p per share to raise gross proceeds of approximately £41 million.

Under the terms of the sale and purchase agreement between Breedon and Cortolina Investments, Breedon will acquire the entire issued share capital of Hope for a purchase price of £336 million on a cash- and debt-free basis. The consideration will be satisfied by the payment of £202 million in cash and the issue to Abicad Holding Limited, an associated company of Cortolina, of new ordinary shares in Breedon at the placing price equal to approximately 18.4% of the enlarged share capital. Breedon has also entered into an enlarged £300 million revolving credit facility to re-finance its existing bank facilities and to part fund the cash consideration.

The acquisition is conditional upon the approval of the UK Competition and Markets Authority and is expected to complete in the second quarter of 2016.

The Travers Smith team which advised Breedon on the transaction was led by Head of Corporate Spencer Summerfield and corporate partner Jon Reddington, who were supported by corporate associates Jonathan Walters and Tom Coulter. Finance partner Danny Peel and associate Kate Dickens acted on finance related aspects of the transaction. Competition partner Nigel Seay and associates Stephen Whitfield and Paul McComb provided competition related advice on the deal.

Other advisers on the transaction included Moelis, who acted as financial adviser for Breedon and Jones Day who acted for Cortolina Investments.