BGC unit set to return to the market

The Perth-based Buckeridge Group of Companies owns a cement grinding terminal, quarries and concrete operation. Picture: iStock

Fresh from striking a deal to buy Boral, the Kerry Stokes-controlled Seven Group empire could be once again embarking on acquisitions, with one of the country’s best privately held building materials businesses in its sights.

Sources say that the Perth-based Buckeridge Group of Companies, where Seven Group is based, is believed to be gearing up once again for asset sales, with suggestions its construction materials business could soon be offered for sale.

Suggestions are that the unit could be earning between $60m and $80m annually, which could place a price tag of between $600m to $800m on the operation based on its aspirations to achieve a price of 10 times its earnings.

Working on the pending sale process is believed to be Macquarie Capital.

Many in the market believe Boral - the country’s largest building materials provider - is well placed.

However, the thinking is that BGC may have determined that the time is right for the move, because of the number of major building materials companies that have been snapped up by global groups in recent months.

The amount of change among the top industry players in the past year has been unprecedented.

AdBri has been purchased by Irish group CRH, CSR has been bought by Saint-Gobain, Seven Group has purchased Boral, Brickworks has a new boss and speculation is mounting that Fletcher Building could be subject to a break-up once a new chief executive and chairman is appointed.

Also, Platinum Equity has purchased the Australian and New Zealand business of Jeld-Wen.

While market experts believe that Seven’s Boral is the natural owner of the unit, but Cement Australia, which is owned by Holcim and Hanson, could also compete to buy the business.

BGC was up for sale in 2022, but buyers were unwilling to take on the family-owned company’s loss making home building unit.

That part of the business has since been separated.

The overall BGC business has previously been estimated to be worth over $2bn before parts of the sprawling empire created by the late Len Buckeridge were sold off, including two hotels, a contract mining unit and property development land and apartment projects.

DataRoom understands that BGC’s West Australian cement grinding terminal, quarries, concrete and transport businesses account for least half BGC’s overall value.

In 2022, it was understood that BGC was generating $100m of earnings before interest, tax, depreciation and amortisation and $1bn of revenue.

Market analysts believe that the Australian building materials market is attractive to offshore groups because of the lack of housing supply and need for infrastructure spending with growing immigration.

Meanwhile, there are also suggestions that after bedding down its acquisition of CSR, Saint-Gobain may move to sell CSR’s PGH Bricks and Pavers or Monier Roofing units, given that bricks is not a part of its global core business.