Monday 21st May 2018
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Fulton Hogan has bought Stevenson Group's construction materials units for an undisclosed sum, adding two quarries, four concrete plants and a lab testing facility at a time when infrastructure work is tipped to keep growing over the coming five years.
Christchurch-based Fulton Hogan today signed an agreement to buy Stevenson Construction Materials and Stevenson Properties (2015), adding more than 200 employees to its 7,100-strong workforce, the companies said in a joint statement. The terms of the deal are confidential and it's expected to settle by July 31.
Stevenson Group hired PwC to investigate options for the business late last year, which chief executive Mark Franklin described at the time as "premium assets" which would fit well with several companies.
Fulton Hogan chief executive Cos Bruyn, who took over the reins last year, said the acquisition complements the firm's vertical supply chain and gives it a long-term supply of quality aggregates to meet growing demand in Auckland and Waikato.
"We look forward to welcoming Stevenson’s 200+ strong workforce to the Fulton Hogan family once the purchase is complete," Bruyn said. "We thank the Stevenson family for their trust in Fulton Hogan to continue their legacy and are pleased to retain the Stevenson brand."
New Zealand's infrastructure construction accounts for about a quarter of all activity by value and is seen expanding at about 4.5 percent a year through to 2022 in the 2017 National Construction Pipeline. That's underpinned by transport, Kaikoura earthquake-related work and water and wastewater projects, and in the government's budget last week, some $14.3 billion of capital spending was earmarked for purchases of physical assets and another $13.2 billion for investments via entities including the New Zealand Transport Agency and City Rail Link.
Franklin today told BusinessDesk the company has been a long-term owner of the construction materials, citing the Drury quarries as an example that has been part of the group since 1939, but that it's now probably "more valuable as part of someone else's supply chain".
Stevenson Group's current portfolio includes the Drury South Cross development, which Franklin said will be a five-to-10 year plan, and its mining assets, which have been "very successful".
"We will have the ability to look at other investments as well, but we're concentrating on Drury south right now," Franklin said.
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