Bids due for BGC building materials empire

The building materials empire of the late Len Buckeridge, a Perth-based billionaire (pictured), is for sale.

The sale process for the $800m Perth-based Buckeridge Group of Companies (BGC) building materials portfolio is heating up as suitors get ready to lob first round offers next week.

The sector remains under intense scrutiny from industrial asset buyers, with expectations that CSR buyer Saint Gobain could sell its PGH Bricks and Pavers or Monier Roofing units. There may also be opportunities to buy companies within the stable of the embattled Fletcher Building, which is listed in Australia and New Zealand.

However, DataRoom understands that Saint Gobain, which bought CSR earlier this year for $4.3bn, plans to hold on to the brick operations for now, even though bricks are not central to its global portfolio.

It is believed that Saint Gobain views the timing of a sale is not right, given the brick businesses are located on valuable parcels of land, which will probably be worth far more once the housing market cycle turns, with interest rate cuts looming.

As reported by DataRoom in July, investment bank Macquarie Capital is working on the sale. of BGC.

Last time the business came up for grabs, the country’s largest building materials provider Boral was believed to be the most motivated buyer, along with Cement Australia, a joint venture owned by Holcim and Hanson.

Boral is now fully controlled by the empire of West Australian billionaire Kerry Stokes, who owns most of the listed diversified company Seven Group Holdings.

Given its market dominance, some question whether Boral would gain clearance from the Australian Competition & Consumer Commission.

It could join forces with Cement Australia to pick up the assets.

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

A number of building materials companies have been delisted recently. AdBri has been purchased by Irish group CRH, CSR by Saint-Gobain, Seven Group bought Boral, Platinum Equity acquired the Australian and New Zealand business of windows manufacturer Jeld-Wen, Brickworks has a new boss, and speculation is mounting that Fletcher Building could be broken up under new boss Andrew Reding.

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

The 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.

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.