Fletcher Building Limited is acquiring the New Zealand road construction business Higgins Group Holdings Limited and other related assets, together with Higgins’ Fiji contracting company, for NZ$315 million.
The companies have been partners in road construction projects for more than 25 years.
Subject to consent from the Overseas Investment Office and the Commerce Commission, Fletcher Building is anticipating the deal will be concluding on June 30, 2016.
It will acquire Higgins’ road construction and maintenance operations in New Zealand, including asphalt and bitumen plants as well as road construction and maintenance operations in Fiji.
Higgins’ aggregates business, which includes 16 operational quarries and other related activities including the manufacture of traffic signs, and bitumen tanks and sprayers are also part of the Fletcher acquisition.
However, Higgins’ ready-mix concrete and property businesses are not part of the purchase.
Higgins is the third largest participant in the New Zealand road construction and maintenance sector with integrated quarry operations.
The business has had a steady growth trajectory in recent years, driven by the expansion of its base of the lower North Island into the Auckland, Waikato, Bay of Plenty and Canterbury regions.
Augmenting this trajectory is substantial growth in its Fiji operations, by Higgins winning two major contracts.
Fletcher Building chief executive officer Mark Adamson said he was delighted that Fletcher Building had been able to conclude the transaction with the Higgins family.
“We have signalled for some time our desire to extend our activities into the road construction and maintenance sector, where we have identified significant opportunity,” says Adamson.
“Higgins was a logical choice for Fletcher Building to talk with given our strong history of working together,” he says.
“We also see further benefits for some group businesses in being able to work more closely with Higgins, and believe that we can derive further value from the acquisition through operational synergies,” says Adamson.
“We will be looking to extend the sphere of operations beyond Fiji into other South Pacific territories over the next few years,” he says.
