Breedon Group plc. ( Breedon ) Acquisition of Lagan Group (Holdings) Limited Placing to raise approximately 170 million

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1 17 April 2018 Breedon Group plc ( Breedon ) Acquisition of Lagan Group (Holdings) Limited Placing to raise approximately 170 million Breedon announces that it has entered into a conditional agreement to acquire Lagan Group (Holdings) Limited ( Lagan ), a leading construction materials business based in Belfast, for a cash consideration of 455 million* on a cash- and debt-free basis (the Acquisition ). The combination of Breedon and Lagan will create a leading independent construction materials group in the UK and Ireland, and extend Breedon s geographic footprint with immediate critical mass in Ireland and across the entire value chain. The Acquisition also provides Breedon with an enhanced platform for further organic growth and bolt-on acquisitions. Transaction highlights Breedon has agreed to acquire Lagan for 455 million* on a cash- and debt-free basis. The consideration will be payable to the sellers on Completion Lagan is a leading supplier of construction materials and contract surfacing in Ireland and the UK with a modern cement plant in Kinnegad, nine active quarries, 13 asphalt plants and nine ready-mixed concrete plants In the year ended 31 December 2017, Lagan generated revenues of 249 million and EBITDA of 46 million The consideration will be financed by a combination of a new 150 million term loan, a new 350 million revolving credit facility which replaces Breedon s existing 300 million revolving facility and a 170 million equity placing (the Placing ) The Acquisition enables Breedon to enter the attractive Irish construction market and provides significant opportunities to expand upstream though the aggregates business in Ireland and downstream through the asphalt and ready-mixed concrete operations Breedon expects to achieve annual cost synergies of approximately 5 million by the third full year following Completion The Acquisition is expected to be double-digit accretive to Underlying EPS in the first full year following Completion** * Based on locked-box accounts at 31 December 2017 **This should not be construed as a profit forecast and should therefore not be interpreted to mean that earnings per share in any future financial period will necessarily match or be greater than those for the relevant preceding financial period. 1

2 The placing will raise gross proceeds of approximately 170 million through the issue of 222,222,222 new Ordinary Shares (the "Placing Shares") at 76.5 pence per share (the "Placing Price") Of the Placing Shares, 65,488,454 new Ordinary Shares (the "Clawback Placing Shares") have been placed subject to a right of recall to satisfy allocations under the Clawback Placing also announced today by Breedon, the terms and conditions of which are set out in this Announcement Breedon also intends to raise up to approximately 4 million through the issue of 5,542,967 new Ordinary Shares pursuant to an open offer (the "Open Offer"), to allow Breedon shareholders who are not participating in the Placing to subscribe for new Ordinary Shares at the Placing Price Breedon s pro forma net debt is expected to be approximately 2.6x Underlying EBITDA at Completion. Leverage is expected to fall to less than 1x in 2020 Peter Tom CBE, Breedon s Executive Chairman, commented: We are delighted to have completed our largest acquisition to date and particularly pleased that it has been so strongly supported by our shareholders. Over the last eight years we have pursued a successful buy-and-build strategy which has established Breedon as the largest independent construction materials business in the UK and the acquisition of Lagan is another strategic step for us. We believe it has the potential to add significantly to the Group s performance and prospects and we are looking forward to working with our new colleagues to deliver further value for our investors. Pat Ward, Breedon s Group Chief Executive, added: Lagan represents a unique opportunity to enter a growing market with immediate scale and excellent opportunities for expansion. It significantly strengthens our cement offer, adds to our mineral and downstream resources, brings us a bitumen import/export business and adds real weight to our contract surfacing operations. Lagan is well-run, well-invested, with an experienced management team and a strong track record. Its culture is complementary to our own, with a sharp focus on customer service, a firstclass workforce and a commitment to safety, which is a key priority for us. From a strategic perspective, it provides us with a stronger platform from which to pursue further organic growth and bolt-on acquisitions. Kevin Lagan, Chairman of Lagan Group, said: I d like to thank our committed and passionate staff for the role they have played in the growth of Lagan Group and I wish them every success as they enter an exciting new chapter with Breedon, who I am confident will build on that success, supporting the development of the business in the years ahead. - ends - 2

3 Note to editors Following the acquisition of Lagan, Breedon Group plc will be a leading construction materials group in the UK and Ireland. It will operate two cement plants, around 70 quarries, 40 asphalt plants, 200 ready-mixed concrete and mortar plants, nine concrete and clay products plants, four contract surfacing businesses, six import/export terminals and two slate production facilities. The Group will employ nearly 3,000 people and have around 870 million tonnes of mineral reserves and resources. The Group s strategy is to continue growing organically and through the acquisition of businesses in the heavyside construction materials market. Webcast for analysts and investors Breedon will host a meeting for invited analysts at 9.00am today at Travers Smith LLP, 2-3 Hosier Lane, London EC1 and there will be a simultaneous webcast of the meeting. Please use this link to join the webcast: The webcast will also be available to view on our website later today at and the presentation can also be viewed or downloaded from the same location from 8.55am today. The information contained within this announcement is deemed by the Group to constitute inside information under the Market Abuse Regulations (EU) No. 596/2014. Enquiries: Breedon Group plc Peter Tom, Executive Chairman Pat Ward, Group Chief Executive Rob Wood, Group Finance Director Stephen Jacobs, Head of Communications Moelis & Company (Financial Adviser to Breedon) Mark Aedy Liam Beere Rich Newman Cenkos Securities (NOMAD and Joint Broker to Breedon) Max Hartley Oliver Goad Numis Securities (Joint Broker to Breedon) Heraclis Economides Ben Stoop Tel: Tel: Tel: Tel: Tel:

4 IMPORTANT NOTICES MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE CLAWBACK PLACING. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(1)(e) OF DIRECTIVE 2003/71/EC AS AMENDED, INCLUDING BY THE 2010 PROSPECTUS DIRECTIVE AMENDING DIRECTIVE (DIRECTIVE 2010/73/EC) AND TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE (THE "PROSPECTUS DIRECTIVE"); (2) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS) OR (B) FALL WITHIN ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN BREEDON GROUP PLC. THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE OF THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE. THIS ANNOUNCEMENT (INCLUDING THE APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. The distribution of this Announcement and/or the Placing and/or issue of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, the Joint Bookrunners or any of their respective affiliates, agents, directors, officers or employees that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and the Joint Bookrunners to inform themselves about and to observe any such restrictions. This Announcement or any part of it is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia (the "United States" or the "US")), Australia, Canada, the Republic of South Africa or Japan or any other jurisdiction in which the same would be unlawful. No public offering of the Placing Shares is being made in any such jurisdiction. All offers of the Placing Shares in the EEA will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus. In the United Kingdom, this Announcement is being directed solely at persons in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 (as amended) does not apply. The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States. The relevant clearances have not been, nor will they be, obtained from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained for the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Placing Shares and the Placing Shares have not been, nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Canada, the Republic of South Africa or Japan. 4

5 Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, the Republic of South Africa or Japan or any other jurisdiction outside the United Kingdom. Persons (including, without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any action. By participating in the Placing, each person who is invited to and who chooses to participate in the Placing (a "Placee") by making an oral and legally binding offer to acquire Placing Shares will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in the Appendix. This Announcement may contain and the Company may make verbal statements containing "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company, including amongst other things, United Kingdom domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of governmental and regulatory authorities, the effect of competition, inflation, deflation, the timing effect and other uncertainties of future acquisitions or combinations within relevant industries, the effect of tax and other legislation and other regulations in the jurisdictions in which the Company and its affiliates operate, the effect of volatility in the equity, capital and credit markets on the Company's profitability and ability to access capital and credit, a decline in the Company's credit ratings; the effect of operational risks; and the loss of key personnel. As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. Except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based. Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of (a) retail investors, (b) investors who meet the criteria of professional clients and (c) eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Joint Bookrunners will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels. Moelis & Company UK LLP ( Moelis & Company ), which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively as financial adviser to Breedon and no-one else in connection with the Acquisition and will not be responsible to anyone other than Breedon for providing the protections afforded to clients of Moelis & Company nor for providing advice in connection with the Acquisition or any matter referred to herein. Cenkos Securities plc ("Cenkos Securities") which is authorised and regulated in the United Kingdom by the FCA, is acting solely for Breedon in relation to the Placing and no-one else and will not be responsible to anyone other than Breedon for providing the protections afforded to clients of Cenkos Securities nor for providing advice in relation to the Placing or any other matter referred to in this Announcement. 5

6 Numis Securities Limited ("Numis Securities") which is authorised and regulated in the United Kingdom by the FCA, is acting solely for Breedon in relation to the Placing and no-one else and will not be responsible to anyone other than Breedon for providing the protections afforded to clients of Numis Securities nor for providing advice in relation to the Placing or any other matter referred to in this Announcement. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Joint Bookrunners, Moelis & Company or by any of their respective affiliates or agents as to, or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefor is expressly disclaimed. No statement in this Announcement is intended to be a profit forecast or estimate, and no statement in this Announcement should be interpreted to mean that earnings per share of the Company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the Company. The price of shares and any income expected from them may go down as well as up and investors may not get back the full amount invested upon disposal of the shares. Past performance is no guide to future performance, and persons needing advice should consult an independent financial adviser. The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange. Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement. 6

7 1. Introduction Breedon announces that it has entered into a conditional agreement to acquire Lagan Group (Holdings) Limited ( Lagan ), a leading construction materials business based in Belfast, for a cash consideration of 455 million* on a cash- and debt-free basis (the Acquisition ). The consideration will be payable to the sellers on Completion. The combination of Breedon and Lagan will create a leading independent construction materials group in the UK and Ireland, and extend Breedon s geographic footprint with immediate critical mass in Ireland and across the entire value chain. The Acquisition also provides Breedon with an enhanced platform for further organic growth and bolton acquisitions. 2. Information on Lagan Lagan is a leading supplier of construction materials and contract surfacing in Ireland and the UK, supplying a range of bulk and bagged cement, aggregates, asphalt and bitumen, with services ranging from road surfacing and maintenance to airfield surfacing. Founded in 1960, Lagan is one of the largest privately-owned companies in Ireland, employing approximately 750 people. Lagan s assets include: a modern cement manufacturing facility, nine active quarries across the UK & Ireland (including the Welsh Slate business), 13 asphalt plants, nine ready-mixed concrete plants, a brick manufacturing plant, four port terminals (one for cement export, one for aggregates export and two for bitumen import & export) and a share in a bitumen vessel. In the year ended 31 December 2017, Lagan generated revenue of 249 million, EBITDA of 46 million and profit before tax of 21 million. As at 31 December 2017, Lagan had pro forma net assets of 156 million. 3. Information on Breedon Breedon is the largest independent construction materials group in the UK after the four global majors. It operates a cement plant, around 60 quarries, 26 asphalt plants, nearly 200 ready-mixed concrete and mortar plants and four concrete products plants nationwide, employing around 2,200 people. Breedon has strong asset backing, with around 750 million tonnes of mineral reserves and resources. Breedon s strategy is to continue growing through organic improvement and acquisition of businesses in the heavyside construction materials market. In the year ended 31 December 2017, Breedon sold 16.0 million tonnes of aggregates, 1.9 million tonnes of asphalt and 3.3 million cubic metres of concrete. In the same period Breedon generated revenue of 652 million, Underlying EBITDA of 117 million and profit before tax of 71 million. Breedon s Ordinary Shares are admitted to trading on the AIM market of the London Stock Exchange. 4. Strategic rationale for the Acquisition Expansion into the attractive Irish construction market Lagan s strong presence as a leading supplier of construction materials and services in Ireland complements Breedon s existing footprint in the UK. The strategic entry into Ireland secures immediate critical mass across the entire value chain and will allow Breedon to service an attractive market with a strong growth outlook for the Irish construction sector. * Based on locked-box accounts at 31 December

8 Increased scale and enhanced market position The Acquisition creates a leading independent construction materials group in the UK and Ireland. The Enlarged Group will have: two cement manufacturing plants, 69 quarries, 39 asphalt plants, approximately 200 ready-mixed concrete and mortar plants, six import/export terminals, eight railfed depots and four contract surfacing businesses. In the year ended 31 December 2017, the Enlarged Group would have reported pro forma revenue of 901 million and pro forma Underlying EBITDA of 163 million. Further consolidation of the UK and Irish heavyside construction materials sectors As a result of sector consolidation over the last 15 years or so, international cement companies now account for the vast majority of the UK heavyside building materials industry. The combination of Breedon and Lagan brings together two sizeable companies in this sector in the UK and RoI and, in line with Breedon s strategy, further consolidates the UK and RoI heavyside construction materials industry. With the significantly enhanced platform created by this Acquisition, and with the smaller end of the sector remaining highly fragmented, there are further consolidation opportunities for the Enlarged Group in the future. Improved and broadened product mix The Acquisition provides a range of complementary products and services that will enable Breedon to strengthen its core product offering. In addition to aggregates, asphalt, ready-mixed concrete and bitumen, Lagan adds bricks, a range of concrete and clay products and Welsh slate to Breedon s existing portfolio. Lagan also brings with it a substantial contract surfacing and road maintenance business which will significantly increase the scale of Breedon s existing contract surfacing operations and enable the Enlarged Group to provide solutions to larger surfacing and road maintenance projects. Cost synergies Breedon expects to achieve annual cost synergies of approximately 5 million from operational improvements by the third full year following Completion. One-off integration costs to achieve these savings are expected to be approximately 4 million. 5. Key terms of the Acquisition Under the terms of the sale and purchase agreement relating to the Acquisition (the SPA ), Breedon Holdings (Jersey) Limited, a wholly-owned subsidiary of Breedon, will acquire the entire issued share capital of Lagan for a purchase price of 455 million on a cash- and debt-free basis. The consideration will be payable to the sellers on Completion. Completion is conditional on, and is expected to occur within one Business Day of, Admission. The SPA also contains customary warranties, covenants, undertakings and conditions for a transaction of this nature. 6. Financing for the Acquisition The consideration will be financed by a combination of a new term loan, a new revolving credit facility and the net proceeds of the Placing. 8

9 At the time of signing the SPA, Breedon entered into a new 500 million term and revolving credit facility agreement with Barclays Bank PLC, HSBC Bank plc, The Royal Bank of Scotland plc, Santander UK plc and AIB Group (UK) PLC (t/a First Trust Bank). The new facility replaces Breedon's existing 300 million revolving credit facility and has a four-year term with an option to extend by one year (in respect of the 350 million revolving facility only; the 150 million term facility amortises fully over the four-year term) and a 100 million accordion option. The pricing is marginally better than Breedon s existing revolving credit facility. 7. The Placing The Placing Shares have been conditionally placed by Cenkos Securities and Numis Securities, as agents for Breedon, with existing institutional and other investors at the Placing Price in accordance with the terms of the Placing Agreement. Breedon intends to use the net proceeds of the Placing to part-fund the cash consideration payable under the terms of the SPA. Of the Placing Shares, 65,488,454 new Ordinary Shares (the "Clawback Placing Shares") have been placed subject to a right of recall to satisfy allocations under the Clawback Placing which will be launched immediately following this Announcement. The Clawback Placing is subject to the terms and conditions set out in the appendix of this Announcement. The remaining 156,733,768 Placing Shares (the "Firm Placing Shares") have been placed firm and are not subject to clawback. Cenkos Securities and Numis Securities will today commence a bookbuilding process in respect of the Clawback Placing Shares. The Clawback Placing Shares will be placed at the Placing Price. The timing of the closing of the book and allocations are at the absolute discretion of Cenkos Securities, Numis Securities and Breedon. Regardless of the take-up of the Clawback Placing Shares, the full number of Placing Shares will be allotted pursuant to the Placing Agreement. The issue of the Placing Shares is to be effected by way of a cashbox placing. Breedon will allot and issue the Placing Shares on a non-pre-emptive basis to the Placees in consideration for Cenkos Securities transferring its holdings of redeemable preference shares and ordinary subscriber shares in Lisbon Funding Limited ("JerseyCo") to Breedon. The Placing is not underwritten and is not conditional on Completion. The Placing Agreement contains certain warranties and indemnities from Breedon in favour of Cenkos Securities and Numis Securities, and is conditional, inter alia, upon: (a) certain announcement obligations; (b) the SPA having become unconditional in all respects (save in relation to any condition relating to the Placing Agreement becoming unconditional and Admission) and not being terminated in accordance with its terms; (c) the Facility Agreement having become unconditional in all respects (save in respect of any condition relating to the Placing Agreement becoming unconditional, Admission and the completion of the SPA) and not being terminated in accordance with its terms; (d) the warranties contained in the Placing Agreement not being breached (save where such breach is not considered by the Joint Bookrunners, acting jointly and in good faith, to be material in the context of the Placing) when made at the date of the Placing Agreement and at Admission by reference to the facts and circumstances subsisting at the time; (e) the Company complying with its obligations under the Placing Agreement in all material respects to the extent that they fall to be performed on or before Admission; and 9

10 (f) Admission becoming effective in accordance with the AIM Rules for Companies by no later than 8.00 a.m. on 19 April 2018 (or by such later date as the Company and the Joint Bookrunners (acting jointly) may agree in writing, being no later than 8.00 a.m. on 30 April In the unlikely event that the Acquisition does not complete in circumstances where Admission has already taken place, the Board's current intention is that the net proceeds of the Placing will be invested and/or applied for general corporate purposes and, where possible, financing other acquisition opportunities that fulfil the Company's strategic objectives. The Placing Shares will represent approximately 15.4 per cent of Breedon s current issued share capital and approximately 13.3 per cent of the Enlarged Share Capital of Breedon following Admission and Completion. The Placing Shares will, following Admission, rank in full for all dividends and distributions declared, made or paid in respect of the issued ordinary share capital of Breedon and otherwise rank pari passu in all other respects with the existing Ordinary Shares. The Placing Price represents a 2.3 per cent discount to the closing mid-market price of 78.3 pence per Ordinary Share on 16 April 2018 (being the latest practicable date prior to the date of this Announcement). 8. Open Offer The Board is pleased to provide Qualifying Shareholders with the opportunity to participate in the Open Offer at the Placing Price to raise approximately 4 million (assuming full take up of the Open Offer but being less than the 5 million maximum amount permitted without requiring publication of a prospectus under the Prospectus Rules). The Open Offer is in addition to and separate from the Placing. The Open Offer is conditional upon (amongst other things) Completion and is not being underwritten. The Directors are fully supportive of the Open Offer and the Directors who are Qualifying Shareholders (other than one of the non-executive Directors) have therefore indicated their intention to participate in part or in full in the Open Offer in respect of their respective Basic Entitlements, which amount to 190,496 Open Offer Shares in aggregate. However, the Directors who are Qualifying Shareholders are willing to be scaled back by other Qualifying Shareholders under the Excess Application Facility to accommodate demand from other Qualifying Shareholders. Qualifying Shareholders are also being given the opportunity, provided they take up their Basic Entitlements in full, to apply for Excess Entitlements through the Excess Application Facility, further details of which are set out below. Qualifying Shareholders with holdings of Existing Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating their Open Offer Entitlements. Entitlements of Qualifying Shareholders will be rounded down to the nearest whole number of Open Offer Shares. Fractional entitlements which would otherwise arise will not be issued to the Qualifying Shareholders but will made available under the Excess Application Facility. The Excess Application Facility enables Qualifying Shareholders to apply for Open Offer Shares in excess of their Basic Entitlement as at the Record Date. However, applications for Excess Entitlements will be satisfied only and to the extent that corresponding applications by other Qualifying Shareholders are not made or are made for less than their Basic Entitlements and may be scaled back at Breedon s absolute discretion. No assurance can be given that applications by Qualifying Shareholders under the Excess Application Facility will be met in full, in part or at all. 10

11 In any event, applications will be rejected if acceptance would result in the Qualifying Shareholder, together with those acting in concert with him for the purposes of the City Code on Takeovers and Mergers, holding 30 per cent. or more of the Ordinary Shares in issue immediately following Admission. Qualifying Non-CREST Shareholders who wish to apply to acquire more than their Basic Entitlements should complete the relevant sections on the Application Form. Qualifying CREST Shareholders will have Excess Entitlements credited to their stock account in CREST and should refer to the Circular for information on how to apply for Excess Entitlements pursuant to the Excess Application Facility. The Circular contains the full terms and conditions of the Open Offer. 9. Financial effects of the Acquisition The Acquisition will significantly increase Breedon s scale and profitability, bringing into the Group a business that generated revenue of 249 million and EBITDA of 46 million in the year ended 31 December In addition, Breedon expects to achieve annual cost synergies of approximately 5 million by the third full year following Completion. The Acquisition is expected to be double-digit accretive to Breedon s Underlying EPS in the first full year following Completion.** Breedon s pro forma net debt is expected to be approximately 2.6x Underlying EBITDA at Completion. Leverage is expected to fall to less than 1x in The Enlarged Group s strong balance sheet and expected increased future cash flow will provide it with the financial flexibility to pursue further bolt-on acquisitions and future growth opportunities. 10. Board, management and employees Breedon greatly values the skills, knowledge and expertise of Lagan s existing management team and employees. Lagan s experienced management team will continue to drive growth in Ireland, supported by Breedon s existing management team. 11. Strategy of the Enlarged Group The strategy of the Enlarged Group will remain consistent with Breedon s current strategy of pursuing a well-planned combination of organic growth and continuing consolidation of the UK and Irish heavyside construction materials industry. Breedon s objective remains to be the safest and most profitable construction materials company in the UK and Ireland market through: striving for best customer service; delivering continuous organic improvement; securing value-enhancing acquisitions; and doing all these things safely. 12. Interim results In light of the acquisition of Lagan, and in order to allow time for the first phase of its integration into the Group to be completed, it has been decided to reschedule the announcement of Breedon s interim results from mid-july to 5 September This will apply to the current year only. In 2019 Breedon will resume its customary practice of reporting in mid-july. ** This should not be construed as a profit forecast and should therefore not be interpreted to mean that earnings per share in any future financial period will necessarily match or be greater than those for the relevant preceding financial period. 11

12 13. Trading update for underlying Breedon business In common with the rest of our industry, we have experienced disruption from the severe weather in the first quarter which has impacted the phasing of some of our work. However, with the worst of the weather behind us, we have seen an improvement in recent weeks and anticipate a continuing recovery in activity. The Board s expectation for the full year remains unchanged. 14. Total Voting Rights Application has been made for the Placing Shares to be admitted to trading on AIM. The Placing Shares will rank pari-passu with existing Ordinary Shares and it is expected that Admission will occur at 8.00 a.m. on or around 19 April Following Admission, Breedon s issued ordinary share capital will comprise 1,668,936,659 Ordinary Shares, of which none are held in treasury. Therefore, the total number of Ordinary Shares with voting rights in Breedon following Admission will be 1,668,936,659. The above figure of 1,668,936,659 may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in Breedon under the FCA's Disclosure Guidance and Transparency Rules. 15. Definitions The following words and expressions shall have the following meanings in this Announcement unless the context otherwise requires: Acquisition Admission AIM AIM Rules Announcement Basic Entitlement Board of Directors or Directors Breedon or the Company Cenkos Securities Circular Clawback Placing Clawback Placing Shares Completion the proposed acquisition by Breedon of Lagan the admission to trading on AIM of the Placing Shares becoming effective in accordance with Rule 6 of the AIM Rules the AIM Market of the London Stock Exchange the rules for AIM companies as published by the London Stock Exchange from time to time this announcement and the Appendix the basic entitlement to subscribe for Open Offer Shares, allocated to a Qualifying Shareholder pursuant to the Open Offer the directors of Breedon Breedon Group plc, a company registered in Jersey with a registered number Cenkos Securities plc the shareholder circular relating to the Open Offer to be published on the date of this Announcement the right of recall in respect of the Clawback Placing Shares to satisfy allocations under the bookbuilding process being launched today 65,488,454 Ordinary Shares completion of the Acquisition 12

13 CREST EBITDA Enlarged Group Enlarged Share Capital EPS Excess Entitlements Existing Shares Facility Agreement Joint Bookrunners Lagan Moelis & Company Numis Securities Open Offer Open Offer Entitlements Ordinary Shares Placee Placing Placing Agreement Placing Price Placing Shares Qualifying CREST Shareholders the computer system (as defined in the CREST Regulations) in respect of which Euroclear is the recognised operator (as defined in those regulations) earnings before interest, tax, depreciation and amortisation Breedon and its subsidiary undertakings, including Lagan, following Completion the issued ordinary share capital of Breedon immediately following Completion and the Placing earnings per share an entitlement for each Qualifying Shareholder to apply to subscribe for Open Offer Shares in addition to his Basic Entitlement pursuant to the Excess Application Facility which is conditional on him taking up his Basic Entitlement in full and which may be subject to scaling back in accordance with the provisions of the Circular the Ordinary Shares in issue at the Record Date the term loan and revolving credit facility agreement between the Company, Barclays Bank PLC, HSBC Bank plc, The Royal Bank of Scotland plc, Santander UK plc and AIB Group (UK) PLC (t/a First Trust Bank) dated 17 April 2018 Cenkos Securities and Numis Securities Lagan Group (Holdings) Limited Moelis & Company UK LLP Numis Securities Limited the invitation by the Company to Qualifying Shareholders to apply to subscribe for the Open Offer Shares at the Placing Price on the terms and subject to the conditions set out in the Circular the Basic Entitlements and Excess Entitlements ordinary shares of no par value in the share capital of Breedon each person who is invited to and who chooses to participate in the Placing the placing of new Ordinary Shares pursuant to the Placing Agreement the placing agreement entered into between Breedon and Cenkos Securities and Numis Securities on 17 April pence per Placing Share 222,222,222 Ordinary Shares Qualifying Shareholders holding Existing Shares in uncertificated form 13

14 Qualifying Non-CREST Shareholders Qualifying Shareholders Record Date 13 April 2018 Restricted Jurisdiction RoI SPA Underlying EBITDA Underlying EPS UK or United Kingdom Qualifying Shareholders holding Existing Shares in certificated form holders of Existing Shares on the register of members of the Company at the Record Date but excluding any nonexempt overseas shareholder in a Restricted Jurisdiction United States, Canada, Australia, the Republic of South Africa or Japan Republic of Ireland the sale and purchase agreement entered into between Breedon, Breedon Holdings (Jersey) Limited, Kevin Lagan and the other Sellers (as defined therein) and Lagan setting out the terms and conditions of the Acquisition EBITDA before acquisition-related expenses, redundancy and reorganisation costs, property items, amortisation of acquisition intangibles and related tax items EPS before acquisition-related expenses, redundancy and reorganisation costs, property items, amortisation of acquisition intangibles and related tax items the United Kingdom of Great Britain and Northern Ireland 14

15 EXPECTED TIMETABLE OF OPEN OFFER 2018 Record Date and time for entitlement under the Open Offer 5.30 p.m. on 13 April Announcement of the Placing, the Acquisition and the Open Offer 17 April Publication of the Circular and, to Qualifying Non-Crest Shareholders, the Application Form 17 April Ex entitlement date of the Open Offer 17 April Open Offer Entitlements credited to stock accounts in CREST of Qualifying CREST Shareholders by 18 April Latest recommended time and date for requested withdrawal of Open Offer Entitlements from CREST 4.30 p.m. on 2 May Latest time and date for depositing Open Offer Entitlements in CREST 3.00 p.m. on 3 May Latest time and date for splitting Application Forms (to satisfy bona fide market claims) 3.00 p.m. on 4 May Latest time and date for receipt of Application Forms and payment in full under the Open Offer and settlement of relevant CREST instructions (as appropriate) a.m. on 9 May Results of the Open Offer announced 11 May Admission and dealings in the Open Offer Shares expected to commence on AIM 8.00 a.m. on 14 May Expected date for CREST accounts to be credited in respect of Open Offer Shares in uncertificated form (where applicable) 14 May Expected date for despatch of share certificates for Open Offer Shares in certificated form (where applicable) within 14 days of Admission Notes Each of the times and dates above are indicative only and if any of the details contained in the timetable above should change, the revised times and dates will be notified to Shareholders by means of an announcement through a Regulatory Information Service. References to time in this Announcement are to London time, unless otherwise stated. 15

16 APPENDIX - TERMS AND CONDITIONS OF THE CLAWBACK PLACING IMPORTANT INFORMATION FOR INVITED PLACEES ONLY REGARDING THE CLAWBACK PLACING. MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE CLAWBACK PLACING. THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE TERMS AND CONDITIONS SET OUT HEREIN (TOGETHER, THIS "ANNOUNCEMENT") ARE DIRECTED ONLY AT PERSONS WHOSE ORDINARY ACTIVITIES INVOLVE THEM IN ACQUIRING, HOLDING, MANAGING AND DISPOSING OF INVESTMENTS (AS PRINCIPAL OR AGENT) FOR THE PURPOSES OF THEIR BUSINESS AND WHO HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND ARE: (1) IF IN A MEMBER STATE OF THE EUROPEAN ECONOMIC AREA ("EEA"), QUALIFIED INVESTORS AS DEFINED IN ARTICLE 2(1)(e) OF DIRECTIVE 2003/71/EC AS AMENDED, INCLUDING BY THE 2010 PROSPECTUS DIRECTIVE AMENDING DIRECTIVE (DIRECTIVE 2010/73/EC) AND TO THE EXTENT IMPLEMENTED IN THE RELEVANT MEMBER STATE (THE "PROSPECTUS DIRECTIVE"); (2) IF IN THE UNITED KINGDOM, QUALIFIED INVESTORS WHO (A) FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE "ORDER") (INVESTMENT PROFESSIONALS) OR (B) FALL WITHIN ARTICLE 49(2)(a) TO (d) (HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC.) OF THE ORDER (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS"). THIS ANNOUNCEMENT AND THE INFORMATION IN IT MUST NOT BE ACTED ON OR RELIED ON BY PERSONS WHO ARE NOT RELEVANT PERSONS. PERSONS DISTRIBUTING THIS ANNOUNCEMENT MUST SATISFY THEMSELVES THAT IT IS LAWFUL TO DO SO. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THIS ANNOUNCEMENT DOES NOT ITSELF CONSTITUTE AN OFFER FOR SALE OR SUBSCRIPTION OF ANY SECURITIES IN BREEDON GROUP PLC. THE PLACING SHARES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE OR JURISDICTION OF THE UNITED STATES, AND MAY NOT BE OFFERED, SOLD OR TRANSFERRED, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES EXCEPT PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION OF THE UNITED STATES. THE PLACING SHARES ARE BEING OFFERED AND SOLD ONLY OUTSIDE THE UNITED STATES IN "OFFSHORE TRANSACTIONS" WITHIN THE MEANING OF, AND IN ACCORDANCE WITH, REGULATION S UNDER THE SECURITIES ACT AND OTHERWISE IN ACCORDANCE WITH APPLICABLE LAWS. NO PUBLIC OFFERING OF THE PLACING SHARES IS BEING MADE IN THE UNITED STATES OR ELSEWHERE. THIS ANNOUNCEMENT (INCLUDING THIS APPENDIX) AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. The distribution of this Announcement and/or the Placing and/or issue of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company, the Joint Bookrunners or any of their respective affiliates, agents, directors, officers or employees that would permit an offer of the Placing Shares or possession or distribution of this Announcement or any other offering or publicity material relating to such Placing Shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company and the Joint Bookrunners to inform themselves about and to observe any such restrictions. This Announcement or any part of it is for information purposes only and does not constitute or form part of any offer to issue or sell, or the solicitation of an offer to acquire, purchase or subscribe for, any securities in the United States (including its territories and possessions, any state of the United States and the District of Columbia), Australia, Canada, the Republic of South Africa or Japan or any other jurisdiction in which the same would be unlawful. No public offering of the Placing Shares is being made in any such jurisdiction. All offers of the Placing Shares in the EEA will be made pursuant to an exemption under the Prospectus Directive from the requirement to produce a prospectus. In the United Kingdom, this Announcement is being directed solely at persons in circumstances in which section 21(1) of the Financial Services and Markets Act 2000 (as amended) (the "FSMA") does not apply. The Placing Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Placing or the accuracy or adequacy of this Announcement. Any representation to the contrary is a criminal offence in the United States. The relevant clearances have not been, nor will they be, obtained 16

17 from the securities commission of any province or territory of Canada, no prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; the relevant clearances have not been, and will not be, obtained for the South Africa Reserve Bank or any other applicable body in the Republic of South Africa in relation to the Placing Shares and the Placing Shares have not been, nor will they be, registered under or offering in compliance with the securities laws of any state, province or territory of Australia, Canada, the Republic of South Africa or Japan. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Canada, the Republic of South Africa or Japan or any other jurisdiction outside the United Kingdom. Persons (including, without limitation, nominees and trustees) who have a contractual right or other legal obligations to forward a copy of this Announcement should seek appropriate advice before taking any action. This Announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notices" section of this Announcement. By participating in the Clawback Placing, each Placee will be deemed to have read and understood this Announcement in its entirety, to be participating, making an offer and acquiring Clawback Placing Shares on the terms and conditions contained herein and to be providing the representations, warranties, indemnities, acknowledgements and undertakings contained in this Appendix. In particular, each such Placee represents, warrants, undertakes, agrees and acknowledges (amongst other things) that: 1. it is a Relevant Person and undertakes that it will acquire, hold, manage or dispose of any Clawback Placing Shares that are allocated to it for the purposes of its business; 2. in the case of a Relevant Person in a member state of the EEA which has implemented the Prospectus Directive (each, a "Relevant Member State") who acquires any Clawback Placing Shares pursuant to the Clawback Placing: (a) (b) it is a Qualified Investor within the meaning of Article 2(1)(e) of the Prospectus Directive; and in the case of any Clawback Placing Shares acquired by it as a financial intermediary, as that term is used in Article 3(2) of the Prospectus Directive: (i) (ii) the Clawback Placing Shares acquired by it in the Clawback Placing have not been acquired on behalf of, nor have they been acquired with a view to their offer or resale to, persons in any Relevant Member State other than Qualified Investors or in circumstances in which the prior consent of the Joint Bookrunners have been given to the offer or resale; or where Clawback Placing Shares have been acquired by it on behalf of persons in any Relevant Member State other than Qualified Investors, the offer of those Clawback Placing Shares to it is not treated under the Prospectus Directive as having been made to such persons; and 3. it is acquiring the Clawback Placing Shares for its own account or is acquiring the Clawback Placing Shares for an account with respect to which it exercises sole investment discretion and has the authority to make and does make the representations, warranties, indemnities, acknowledgements, undertakings and agreements contained in this Announcement; and 4. it understands (or if acting for the account of another person, such person has confirmed that such person understands) the resale and transfer restrictions set out in this Appendix; and 5. except as otherwise permitted by the Company and subject to any available exemptions from applicable securities laws, it (and any account referred to in paragraph 4 above) is outside the United States acquiring the Clawback Placing Shares in offshore transactions as defined in and in accordance with Regulation S under the Securities Act. No prospectus The Clawback Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require any prospectus or other offering document to be published. No prospectus or other offering document has been or will be submitted to be approved by the FCA in relation to the Clawback Placing or the Clawback Placing Shares and Placees' commitments will be made solely on the basis of the information contained in this Announcement and any information publicly announced through a Regulatory Information Service (as defined in the 17