Stevenson Group to look at selling construction materials unit next year
By Paul McBeth
Dec. 15 (BusinessDesk) - Stevenson Group will test buyer appetite for its concrete business next year in a market the
managing director Mark Franklin doesn't see abating any time soon.
The Australian Financial Review today reported Stevenson has hired PwC to look at options for the business, including a
sale, which could be worth as much as $300 million. Franklin told BusinessDesk the report was "speculation", but
confirmed the group, which also includes mining and quarrying operations, will test the market for its construction
materials division.
"The process hasn't started yet, but we will be looking at this in January," Franklin said. "This is not a first or
second generation company, it's a fourth, fifth, sixth generation - you get to a point where what you want to be as a
company and some things you tend to think 'maybe they don't fit in the portfolio anymore', even though they might be
core business."
Stevenson found itself in the headlines three years ago when it tried to sell the Lochinver Station to China's Shanghai
Pengxin after running an exhaustive sales process. The deal was blocked by the former government and was later sold to a
New Zealand firm. At the time, Franklin said the sale was to free up capital for its other divisions, such as expanding
its Drury quarry.
The conditions for merger and acquisition were seen as favouring sellers by law firm Chapman Tripp in a report on the
trends earlier this year, with cashed-up investors willing to pay high prices for good assets. Chapman named
construction as a sector to watch out for due to the pipeline of new work.
Franklin said the construction materials unit is made up of "premium assets" which would "fit pretty neatly" in the
portfolios of a few companies.
Stevenson has been "flat out" this year in what's a constrained market, with New Zealand pipeline of building work set
to continue under a $42 billion capital spending programme by the new administration.
"We don't see the market unconstraining itself for a while yet," Franklin said.
(BusinessDesk)