- Manufacturers Boral have decided today to end a nearly 30-year relationship with WA company, Midland Brick
- This is the second exit from the brick business in three years from Boral, including the sell-off of its 40 per cent stake in a joint venture with cohort CSR in 2016
- The company says it wants to scale back its presence in the brick industry and will sell Midland Brick for $86 million to a WA consortium of Linc Property, Birchmead and the Fini Group
Manufacturers and suppliers Boral have said today it has an interest to further scale back business in the brick industry, including the sale of WA’s Midland Brick.
The company says it has entered into an agreement with a WA consortium to sell the business, including roughly 800 hectares of land for $86 million.
The consortium in question includes a lineup of Linc Property, Birchmead and the Fini Group. Boral says it’s looking to use the payday to reduce company debt and fund new opportunities for growth.
“Our focus in Australia has been to continue to invest in our leading integrated construction materials business, where we supply materials to residential, commercial and infrastructure building and construction markets across all states and territories,” Boral CEO Mike Kane said.
According to Boral’s ASX media release today, the new owners of Midland Brick will look to expand the company’s operational footprint with redevelopments — a business with over 70 years of history in the WA building industry
“We have owned and operated Midland Brick for close to 30 years and we recognise and value the contribution the business has made to the Boral Group over that time,” Mike added.
In fact, not only is this divestment of Midland Brick a significant departure it’s also the second exit Boral has made from the brick industry over roughly three years.
In 2016 the company sold its stake in a brick company joint venture with cohort company, CSR.
“Having divested our 40 per cent stake in the CSR Boral Bricks joint venture in 2016, the sale of Midland Brick completes our exit from bricks in Australia, for combined proceeds of around $215 million over the past three years,” Mike explained.
According to company management in this morning’s media release, scaling back on the brick industry is a core part of a focused strategy to promote stronger business in other sectors of construction materials.
“We also recognise the iconic and much-loved position that the Midland Brick Company has had in WA for 73 years,” Mike said in closing words.
“We are confident that this change of ownership will strengthen Midland Brick’s prospects for the future, which is great news for customers and our local staff.”
The transaction of the sale is slated for a late 2019 completion, or as soon as third party consent and pre-closing conditions are met.
Boral’s shares are only marginally different today, trading at a 0.2 per cent depreciation for $4.97 per share. The company’s market cap is currently valued at $5.838 billion.