“Francis Flower will bring a portfolio of sustainable products that will strengthen LKAB Minerals position as a supplier for the Building and Construction industry. We also view this as a form of circular economy as there is a strong link to LKAB’s iron ore business. Francis Flower recycle blast furnace slag from the steel industry for production of Ground Granulated Blast furnace Slag (GGBS) a sustainable product that can replace 70% of Portland Cement in a concrete mix delivering decreased CO2 emissions”says LKAB Minerals European CEO Darren Wilson.
Francis Flower has annual sales of approximately 1.3 million tonnes of mineral products at a value of close to 70 Million GBP foremost in the UK, and employs 130 people across four sites in England; Scunthorpe, Wicken, Gurney Slade and Runcorn. The company has a niche in recycled and by-stream product upgrades as well as high quality fillers for several end-user applications.
LKAB Minerals Ltd in the UK has a similar size business across four sites and employs around 160 persons. The main operations are processing and marketing of minerals, primarily for the Building, Construction, Polymer, Coating, Refractory and Foundry Industries.
In 2017, LKAB had sales of 23 Billion SEK (~2 Billion GBP) of which LKAB Minerals reported sales of 2.4 Billion SEK (~210 Million GBP). The acquisition of Francis Flower will bring a significant addition to the sales turnover in the Industrial Minerals segment.
Francis Flower is a family owned business, and the main shareholder is the current Chairman and CEO, Adrian Willmott, who upon completion of the sale will resign his position in the business but remain available in a consultancy capacity during an integration phase, to support a seamless continuation of the business. The company will be integrated into LKAB Minerals’ existing UK business under the leadership of Darren Wilson who manages the UK and European business within LKAB Minerals.
Adrian Willmott comments “LKAB Minerals are in a unique position to further develop Francis Flower across all its product lines. I have the utmost confidence that they will do so using the same core values we have adopted with our customers, suppliers and employees throughout our history. There is no doubt that LKAB Minerals’ links to its parent’s iron ore business will present much opportunity to Francis Flower in its next chapter, combine this with the ambitions of Darren Wilson and Leif Boström and Francis Flower is going to continue to be an exciting place to be.”
Darren Wilson continues to say “It is a strategic fit for LKAB Minerals. Francis Flower has a strong entrepreneurial spirit and focus on sustainability which is a critical success factor that is growing in importance. They have modern state-of-the-art production facilities and a dedicated team of mineral processing experts and industry specialists with a broad network of contacts in the end user segments. I believe we will be able to realise synergies that strengthen both our operations, increase cross-selling and improve service to our combined customer base in a very positive way. I look forward to meeting with all customers and future co-workers in the coming weeks and months.”
Leif Boström is Senior Vice President for the Special Products Division in LKAB and CEO of LKAB Minerals group “We have an ambition of growing the industrial minerals business significantly over time, to balance LKAB’s growing iron ore production. We are doing this through organic growth, meaning we increase sales of our existing product portfolio.
“We also invest in new projects such as upgrading mine waste to phosphorus and rare earth metals, and finally we have an active acquisition strategy. Francis Flower is a perfect fit for us, and importantly we believe we can add value to that business as an owner, helping to grow that further. This will strengthen LKAB Minerals’ offering to the building and construction industries. An increased presence in the industry also has the potential to increase sales of our existing products. I look forward to meeting and welcoming the new co-workers to LKAB Minerals.”
Implementation of the agreement is subject to Austrian merger clearance. The parties are confident that the merger control process will be completed within 4-6 weeks.
The transaction value is not disclosed by either the seller or the buyer.
Source: Company Press Release
