As Australia’s leading and most diverse building material manufacturer, Brickworks is thrilled to announce that it has entered into a binding agreement to acquire certain assets of Southfield Corporation, including Illinois Brick Company (“IBC”), for US$51.1 million (AU$70.0 million).
Illinois Brick Company (IBC), was established in 1981 and has expanded over the past 4 decades through organic growth and acquisitions. It is now the largest independently owned and operated brick distributor in the U.S., with 17 showrooms and distribution yards, all located in Illinois and Indiana.
Trading under a range of well-known and long-established brands, almost half of IBC’s revenue is generated through sales of around 70 million bricks per annum. In addition, IBC offers a range of complementary building materials and supplies such as stone, masonry, construction materials and tools.
The transaction will be funded by existing debt facilities, and is expected to deliver 2% EPS accretion, not including the realisation of cost synergies, and the implementation of growth initiatives that are available to Brickworks.
Brickworks Managing Director, Mr. Lindsay Partridge AM said: “We have enjoyed a strong relationship with IBC since our entrance into the U.S. market almost 3 years ago. We know the business well and are pleased to welcome it’s 225 staff to the Brickworks Group. We look forward to building on the strong position that IBC has established as the number 1 brick distributor in the region.”
“Illinois and Indiana are two major states within our key target market in the Midwest, and both have a strong heritage of brick construction. We currently lack a direct distribution presence in these states and as such this acquisition is a logical strategic fit. The acquisition will significantly increase the scale of our direct distribution network, increasing our store count from 10 to 27.”
“Importantly, sales volume through the IBC network will underpin production volume at our Midwest plants, which have ample capacity to accommodate additional sales growth. These plants include
Marseilles in Illinois, Adel and Sergeant Bluff in Iowa, Caledonia and Iberia in Ohio, and our manufactured stone plant in Kentucky.”
“The outlook for the region is strong, with building activity expected to increase over the next five years, across both residential and non-residential segments. Recently announced government stimulus, including support for state and local infrastructure projects such as schools and universities, is also expected to boost construction activity in the region.”
“Although the pandemic has hit our U.S. operations hard over the past year, with the vaccine program now well advanced, and the economy re-opening, we are seeing a strong recovery in demand. We continue to see the North American brick industry as a highly attractive long-term growth opportunity for Brickworks with a positive market outlook,” Mr. Partridge said.