CRH plc,
the international building materials group, today announces 18 acquisition and
investment initiatives undertaken during the first-half of 2012 as part of its
continuing programme of development activity. The 18 transactions bring
first-half development spend for the Group to approximately €0.25 billion.
The
development initiatives included in this Update comprise: Europe Divisions - 5
transactions €155 million
These
transactions include a significant addition in Germany to our RMI-oriented
Shutters & Awnings business and two acquisitions by our Construction
Accessories business which expand its footprint in Southeast Asia and
strengthen its existing business in the UK. The Distribution business added six
builders merchants outlets in the Netherlands, and CRH also invested further in
its Materials associate in China.
Americas Divisions - 13 acquisitions €89 million
The
Americas Materials Division completed ten bolt-on transactions across its
operations, adding 47 million tonnes of strategically located aggregates
reserves. Our Architectural Products business expanded its national packaged
products operations with two acquisitions adding plants in Texas, Louisiana and
Florida, and also strengthened its masonry operations in the Northeast with an
acquisition in Rhode Island.
Divestment
Update
In addition
to the previously-announced divestment of our 49% stake in Portuguese cement
producer Secil, the first half of 2012 also saw the disposal by Europe Products
of Magnetic Autocontrol, which is headquartered in Germany and supplies vehicle
and pedestrian access control products. This brings first-half divestment
proceeds, including smaller transactions, to €0.7 billion.
Commenting
on these developments, Myles Lee, CRH Chief Executive, said:
“The
bolt-on transactions completed in the first half of 2012 reflect our continuing
strategy of completing acquisitions which fill out our regional and product
level positions, enhance vertical integration and bolster our strong long-term
permitted reserves positions. The transactions announced today bring total
development spend over the past 12 months to approximately €0.7 billion.”
Europe: €155 million
Development
activity in Europe in the first half of 2012 comprised one investment by our
Materials business, together with three acquisitions in our Products activities
and one acquisition by Europe Distribution which add annualised sales of
approximately €166 million. These transactions cost a total of approximately
€155 million, of which goodwill accounted for €46 million.
Europe
Materials
During the
first half of 2012, CRH invested further equity in the Group’s 26% associate in
China, Yatai Building Materials, as part of the financing for the construction
by Yatai of a 1.2 million-tonne-per-annum cement grinding station in Tumen,
Jilin Province extending its cement grinding network. Yatai Building Materials
also progressed the development of its new dry process clinker production line
at the same site. When completed these two projects will bring Yatai’s cement
equivalent capacity to 29 million tonnes.
Europe
Products
The
acquisition of Alulux Erhardt was completed in early April. This represents a
significant geographic addition to the Group’s existing Shutters & Awnings
operations, bringing annualised sales for the enlarged platform to approximately
€200 million and expanding its footprint into Germany. Alulux Erhardt produces
and distributes roller shutter components and assembled shutters and awnings
from six locations in Germany. Approximately 80% of Alulux Erhardt sales are to
the residential repair, maintenance and improvement (RMI) sector; the
acquisition increases CRH’s exposure to this attractive market segment.
Our
Construction Accessories business completed two acquisitions in the first half
of 2012, bringing annualised sales for this segment to approximately €450
million. In April, our footprint in Southeast Asia was expanded through the
acquisition of Malaysia-headquartered Moment Group, which has branches in
Singapore, the Philippines and India. Moment manufactures engineered construction
accessories which complement our existing worldwide portfolio. In January, our
building site accessories business, which provides a full product offering,
strong logistics and on-site presence to the construction industry, was
strengthened with the addition of UK specialist distributor Anchor Bay
Construction Products. Anchor supplies a wide range of products direct to
end-users from locations in the London and Birmingham regions, adding strong
local market positions and a new route to market for our existing products.
Europe
Distribution
In June,
our Distribution group added six branches to its builders merchants network in
the Netherlands through the acquisition of Wijck’s Afbouwmaterialen. As a
specialist merchant of finishing products, Wijck’s services the needs of
specialist contractors and has a strong position in the eastern part of the
Netherlands.
Americas:
€89 million (US$116 million)
Our
Americas businesses spent a total of €89 million in the first half of 2012 on
13 transactions, of which ten were in the Materials segment and three in the
Products business. Goodwill of €27 million arose on these acquisitions, which
add combined incremental sales of €98 million.
Americas
Materials
Ten
acquisitions, four in the East and six in the West, were completed in the first
half of 2012 at a combined cost of US$64 million (€49 million) increasing
vertical integration in a number of key markets and strengthening our
aggregates position through the addition of 47 million tonnes of reserves.
East
The
vertical integration of our existing operations in the mid-Atlantic region was
strengthened during the first half of 2012 by the completion of acquisitions in
North Carolina and Delaware, together with two bolt-on transactions in West
Virginia, which added combined annualised sales of US$25 million.
Rhodes
Brothers Paving, which operates two asphalt plants in North Carolina, was
acquired in January. Rhodes is a good fit with our existing business in the
region and now sources aggregates from CRH’s nearby Franklin quarry. Also in
January, we entered into a 50% joint venture with a long-established integrated
materials business in the mid-Atlantic region. The newly-formed Heritage joint
venture supplies readymixed concrete in existing markets in Delaware, Maryland
and Pennsylvania with greater efficiency and reduced operating costs.
Two bolt-on
acquisitions during the period follow the September 2011 acquisition of Central
Supply, which saw the Group enter the readymixed concrete market in West
Virginia where the Group was already a major asphalt and aggregates supplier.
The assets of Alcon, which operates four readymixed concrete plants together
with a fully-automated concrete block manufacturing facility and four retail
stores for building supplies, were acquired in February. This was followed in
June by the acquisition of the readymixed concrete plant of Arrow Construction
based in Morgantown.
West
Four
transactions involving the purchase of aggregates reserves were completed
during February and March in Colorado and Texas. We acquired three deposits in
Southern and Western Colorado adjacent to existing Group operations, with
combined aggregates reserves of 11 million tonnes. These purchases replace
existing depleting reserves and in addition enable the achievement of transport
and operational efficiencies. A similar transaction in Texas added 15 million
tonnes of aggregates reserves and two readymixed plants in the Austin area,
providing important synergies with our Lindsey (acquired in November 2011) and Wheeler
(acquired in December 2009) businesses.
March also
saw the purchase of two businesses in the Omaha, Nebraska area, adding
incremental sales of US$40 million to our existing operations in the region.
Omni Engineering, an asphalt and paving business, vertically integrates our
Mallard Sand & Gravel business (acquired in January 2008) and significantly
expands our asphalt market share in this stable economic region. The assets of
sand and gravel business KMG Partners add 21 million tonnes of reserves and
provide good opportunities for transport synergies.
Americas
Products
The
Architectural Products Group (APG) completed three transactions during the
first-half of 2012 at a combined cost of US$52 million (€40 million).
Incremental annualised sales resulting from the acquisitions total US$60
million.
In
February, APG acquired Park Avenue Cement Block, a manufacturer and distributor
of masonry products based in Cranston, Rhode Island. With two block machines,
and proximity to the Boston metro market, Park Avenue is an excellent fit with
Anchor Concrete, APG’s masonry and hardscapes business in the Northeast.
The
packaged products assets of TXI, were acquired in April. TXI’s product range
includes dry-mix concrete, packaged cement, bulk mortar and resale products.
With 5 plants located in Dallas, Houston and Austin, TXI is a market leader in
Texas and had been one of the largest licensees of the Group’s Sakrete®
packaged products brand. This transaction further strengthens APG’s national
presence in packaged concrete products. The acquisition of selected assets of
Corbitt Manufacturing Company, a supplier of packaged lawn and garden products
to homecenters in Florida, Louisiana and Texas, was completed in June. The
integration of Corbitt’s business into APG’s Lawn & Garden group expands
its customer base and improves the efficiency of our plant network.
Source
CRH
