Fletcher Building to buy Australian Construction

Fletcher Building agrees to buy Australian Construction Products

Aug. 20 (BusinessDesk) - Fletcher Building Ltd., the nation’s biggest construction company, agreed to acquire Australian Construction Products, betting on increased demand for roading projects across the Tasman.

ACP, an integrated supplier of safety barriers and associated roading products with annual revenues of A$20 million, is expected to record significant growth in the medium term, and achieve a cost of capital return in the first year of ownership, Fletcher Building said in a statement today.

“ACP is a strong-standalone business that is well positioned for the growth we expect to see in roading expenditure in Australia,” said Fletcher Building’s Infrastructure division chief executive Mark Binns. “The acquisition of ACP also will enable us to launch further products into the much-larger Australian market.”

A final price was not disclosed, but a spokesman for the company said it was at the upper end of the A$10 million to A$50 million range the company has previously given for potential acquisitions. The purchase is to be funded through a mix of cash and Fletcher shares. The acquisition is set to complement Fletcher Building’s existing New Zealand roading business, CSP Pacific.

Fletcher said the transaction is still subject to some commercial conditions, but it expects it to be completed by Sept. 1.

Fletcher Building rose 9 cents to $7.43 yesterday and has fallen 8% in the past three months.

(BusinessDesk)

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