Sweden-based Peab has bought the Nordic mineral aggregates and paving business of Finnish construction company YIT for a debt-free purchase price of SEK2,966m (€280m). Peab says the acquisition will expand its business in Sweden, Norway and Finland and will also establish its presence in the paving business in Denmark, giving it a unique and market leading position in this business in the Nordic region. Peab adds that the deal will also increase the importance of industrial operations for the group as w
Sweden-based Peab has bought the Nordic mineral aggregates and paving business of Finnish construction company YIT for a debt-free purchase price of SEK2,966m (€280m).
Peab says the acquisition will expand its business in Sweden, Norway and Finland and will also establish its presence in the paving business in Denmark, giving it a unique and market leading position in this business in the Nordic region. Peab adds that the deal will also increase the importance of industrial operations for the group as well as reduce sensitivity to fluctuations in the business cycle.
Peab consists of four cooperating business areas – construction, civil engineering, industry and project development.
The company says its early investments in the business industry area have been a vital factor behind the Group’s growth and profit generation over the years. The business area delivers strategic input goods, products and services to construction and civil engineering projects such as paving, mineral aggregates, concrete, transportation, machine and crane rentals as well as construction systems. The business area has also developed a recycling operation in which recycled material is reused in production.
Peab is currently a leading player in manufacturing and paving of asphalt as well as in mineral aggregates operations in Sweden and Norway. The company says it is now expanding its operations through the acquisition of YIT’s corresponding operations in Sweden, Norway, Finland and Denmark.
The acquisition entails taking over some 200 strategically located quarries along with 63 asphalt production plants in the Nordic region. Peab will also take over around 1,700 employees.
The acquired YIT mineral aggregates and paving business had net sales of SEK6,005m (€566.12m) with an adjusted EBITDA of SEK240m (€22.63m) in 2018.
The transaction is conditional on approval from competition authorities as well as the fulfilment of certain contractual conditions. The takeover is expected to occur on January 1, 2020.
“Paving and mineral aggregates operations are closely connected to developing communities in terms of civil engineering and construction products,” said Jesper Göransson president and CEO of Peab. “By expanding in these areas we are creating a platform for continued growth and increased profitability. Greater geographic proliferation in businesses that are normally less sensitive to the business cycle increases stability.”
He added that the acquisition also provides the conditions for further expansion and development in other operations such as new products, recycling and concrete.
The acquisition is the second major deal in the Nordic aggregates sector in the last week. On July 4 Metso and Outotec announced that have agreed to combine Metso Minerals and Outotec to create a leading global company in process technology, equipment and services serving the aggregates, minerals and metals industries.
