Tarmac floats division: Building group near target of pounds 300m from disposals

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The Independent Online
TARMAC, the housebuilding and building materials group, is to float the bulk of its industrial products division in a deal that will get it to its target of raising pounds 300m from disposals.

The business, to be called Ruberoid, will be Britain's largest manufacturer of bituminous membranes for roofs, underslatings and damp proof courses. It will also include companies such as Briggs Amasco, the roofing and cladding contractor; Aaronite, the fire protection business; and Durastic, which supplies marine deck covering systems. There will also be two European bituminous membrane suppliers - Atab in Belgium and Nebi in the Netherlands. Three companies from the division, including the curtain walling supplier, are to be retained by Tarmac.

Combined, the companies had sales of about pounds 264m in 1992. Profits were not disclosed but are believed to be slightly above the pounds 4.8m reported by the industrial products division because some of the businesses being kept by Tarmac were making losses.

Tarmac would not comment on the likely value of Ruberoid when it is floated, but said it would bring the group to the target of pounds 300m of disposals, set by Neville Simms, chief executive, last year. It has raised more than pounds 230m so far, implying that Ruberoid will have to have a market capitalisation of about pounds 70m. Mr Simms said that though Tarmac wanted to sell the Ruberoid businesses that did not mean they were not performing well. He said they 'did not fit the heavy-goods Tarmac which is emerging from the recession'.

The industrial products division was built up by Tarmac during the last 25 years, although many of the businesses came with the acquisition of Ruberoid for pounds 141.3m in 1988. Since then, however, the group has raised about pounds 60m from disposals of parts of Ruberoid.

The flotation, being handled by Robert Fleming, should be at above the net asset value of the businesses in Tarmac's accounts. It will, however, have to write back to profits the goodwill previously written off on acquisition. The charge is expected to be less than pounds 100m.

Tarmac had been marketing the businesses to trade buyers since the start of the year but did not get an acceptable offer, Mr Simms said. A pathfinder prospectus for the float will be issued soon and the sale is expected to be completed by the year-end. Ian McPherson, who is in charge of Tarmac's US operations but was head of industrial products, will be chief executive.

Apart from Ruberoid the largest disposals were of part of the Econowaste waste disposal business for pounds 44m and the bitumen refining business for pounds 60m. The shares closed 0.5p higher at 137.5p.

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