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Michelmersh Brick

  • BY: Andrew Hore |
  • POSTED: 07/03/2010 |

Michelmersh Brick is acquiring fellow bricks manufacturer Freshfield Lane Brickworks for £10m.

Michelmersh is raising £3m at 30p a share to help finance part of the £5m in cash being paid for this acquisition. A share issue to the vendors at 39p a share will finance a further £3m of the purchase price. The rest will be in the form of £2m of loan notes maturing in 2012.

Sussex-based Freshfield will help Michelmersh expand in the south of England. Two directors of Freshfield will join the Michelmersh board. Freshfield lost £775,000 on revenues of £6.38m in the year to October 2009, but there were additional private company expenses that won’t be repeated following the sale of the business to Michelmersh.

Freshfield manufactures up to 30m bricks a year and the deal will enable the company to rationalise production at its Telford site. Freshfield has its own clay quarries and owns around 470m acres of land. There are also four residential houses valued at £940,000.

Asset disposals could improve the balance sheet of the company. Planning permission has been granted for 170 houses at Telford. This is the first stage of the development with Persimmon Homes.

At 36p a share, Michelmersh is valued at £14.6m. 

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