The acquisition price includes land and buildings and excludes stock. The transaction will be completed in August 2010.
Girotto is a market leader on the east coast with operations in Melbourne, Sydney and Brisbane. Gocrete operates in Western Australia and commissioned an automated precast plant in 2008. The plants produce both walling, and flooring components. The businesses will be merged with Brickworks' existing Sasso Precast Business and will be re-branded Austral Precast(TM).
Mr Lindsay Partridge, Managing Director of Brickworks Limited, said: "This is an exciting opportunity to add substantial scale and market presence nationally to our precast concrete panels business.
"There are many synergies with the recently acquired Sasso Precast(TM) business in Sydney. The additional volume through the most advanced precast plant in Australia will further strengthen Austral's lowest-cost producer position in New South Wales.
"Capital upgrades to the Gocrete plant in Perth are planned after completion and will secure Austral's position as the lowest cost producer in Western Australia.
"We are also planning the construction of automated production facilities in Brisbane and Melbourne. When completed, these facilities will provide Brickworks with state-of-the-art automated facilities serving the four largest markets in Australia.
"This acquisition and the planned investment in new automated-production facilities demonstrates Brickworks' commitment to the fastest growing product segment of the walling market in Australia. There is substantial upside in precast concrete panels as industrial and commercial development is currently depressed in Australia and the plants are operating at approximately half capacity," added Mr Partridge.
The combined operation will have a total capacity of 675,000 m2 per annum, however the current market for precast walling and flooring components is estimated at 5 million m2 per annum. As a comparison Austral Brick's installed production capacity for clay bricks is 20 million m2 per annum. Market acceptance is increasing, but still has a long way to go to reach the levels of usage seen in Europe and North America." said Mr Partridge.
In a separate transaction, Brickworks announces the settlement of the 15 hectare site at 170 Douglas Street, Oxley. The site was sold to Unison Projects for A$13.0 million plus GST.
About Brickworks Limited
Brickworks Limited (ASX:BKW) was listed on the Australian Securities Exchange in 1962 and has paid a dividend every year since then. It has three Groups - Building Products, Land and Development and Investments. The Building Products Group includes Australia's largest bricks producer Austral Bricks(TM), Austral Masonry(TM), Bristile Roofing(TM) and Austral Precast(TM). The Land and Development operation maximises value from surplus land and redundant building products sites. Investments include a 42.85% holding in Washington H. Soul Pattinson.