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CRH to sell Americas Distribution business

Fels

Part of the $2.6 billion proceeds to be used to purchase German lime and aggregates business Fels

CRH plc have reached agreement to sell their Americas Distribution business to Beacon Roofing Supply Inc. for a total consideration of US$2.63 billion (€2.2 billion) in cash, and will use some of the proceeds to acquire Fels, a leading German lime and aggregates business.

Whilst CRH’s Americas Distribution business has delivered significant returns in recent years, the company said the absence of value-accretive acquisition opportunities and the lack of an obvious route to market leadership led to the decision to divest the business now at an attractive valuation.

In accordance with the Group’s strategy, the proceeds from the divestment will be reallocated to value-creating acquisitions and investments, including €0.6 billion for the purchase of Fels by CRH’s Europe Heavyside business.

With nine production locations in Germany and one each in the Czech Republic and in the Moscow region of Russia, Fels have leading market positions in the lime markets in each of these areas as well as more than 1 billion tonnes of high-quality limestone reserves. In 2016, Fels reported EBITDA of €70 million on sales of €260 million.

CRH are one of the leading lime producers in the UK, Poland and Ireland, with annual production volumes of 1.2 million tonnes and sales of €180 million. The integration of Fels with CRH’s existing business will position the Group at number two in the European lime market, whilst providing a platform for further growth.

Commenting on these developments, CRH’s chief executive, Albert Manifold, said: ‘These transactions demonstrate the execution of CRH’s strategy of adding value through the efficient allocation and reallocation of capital, and in particular the deployment of capital into an attractive growth market in Europe, while maintaining our financial discipline.

‘We are pleased that our Americas Distribution business is being acquired by a highly respected industry player and we wish our colleagues every success as they enter this new phase of their development. At the same time, we see significant value-creation potential from the Fels acquisition, which will also be an exciting new development platform for CRH.’

Meanwhile, CRH have reported a ‘satisfactory start to 2017’, with pre-tax profit up 27% to €517 million and EBITDA up 5% to €1.17 billion on sales that were up 2% to €13 billion, for the six months ended 30 June.

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