3rd Jan 2007 07:00
CRH PLC03 January 2007 3 January 2007 CRH ANNOUNCES ADDITIONAL SECOND HALF 2006 ACQUISITION INITIATIVES OFEURO 400 MILLION BRINGING FULL YEAR ACQUISITION SPEND TO ARECORD EURO 2.1 BILLION CRH plc, the international building materials group, today announces 31acquisition initiatives totalling euro 400 million undertaken during the secondhalf of 2006. These initiatives are in addition to the acquisition of a 50% stake in AmericanCement Company for a cash outlay of US$ 50 million (euro 39 million) announcedon 1 August 2006 and the acquisition of Ashland Paving & Construction (APAC),announced on 21 August 2006, for US$ 1.3 billion (euro 1.0 billion). Taking intoaccount subsequent selective disposals of non-core APAC asphalt and contractingactivities for US$195 net of tax, announced on 12 December 2006, total netacquisition spend for the second half of 2006 amounted to approximately euro 1.3billion. This combined with a first half acquisition spend of euro 0.8 billion results ina record net acquisition spend of approximately euro 2.1 billion for 2006. Commenting on these developments, Liam O'Mahony, CRH Chief Executive, said: "Development momentum in 2006 has been very strong with a total 69 acquisitionsconcluded, including APAC, the largest single transaction completed by theGroup. This record euro 2.1 billion acquisition spend will be an importantfactor in further driving growth across all CRH divisions." The initiatives contained in this Development Strategy Update are as follows: Europe Materials - 4 acquisitions and 1 joint venture investment for euro 47million Four bolt-on transactions were completed, further expanding existing operationsin Ireland, eastern Europe and Portugal. In addition, the Division invested inbitumen storage facilities in Ireland. Europe Products - 7 acquisitions for euro 121 million The Concrete Products group completed CRH's first acquisition in Italy andacquired three other businesses in Germany, Belgium and France. The BuildingProducts group expanded its construction accessories platform with theacquisition of an Irish business; entered a new niche sector by acquiring aleading Dutch roller shutter and awnings business; and purchased a fencingbusiness in the UK. Europe Distribution - 3 acquisitions for euro 18 million Three acquisitions in the Netherlands, Switzerland and France added a total offour builders merchants outlets to our existing branch network in Europe. Americas Materials - 7 acquisitions for euro 69 million Four bolt-on acquisitions were completed by Americas Materials in the Centralregion and a further three acquisitions strengthened its operations in the West. Americas Products - 5 acquisitions for euro 53 million The Precast Group completed two acquisitions, one in Georgia and one inCalifornia. The Architectural Products Group also completed two acquisitions, inIowa and North Carolina. The Glass Group acquired a leading Toronto-basedmanufacturer of curtain wall systems. Americas Distribution - 4 acquisitions for euro 92 million Three interior product acquisitions were completed by the Distribution Group;one in Texas and two in Florida. A roofing and siding distributor on theHawaiian Islands was also acquired. These four transactions added 12 locationsto the Distribution Group's existing branch network. Contact at Dublin 404 1000 (+353 1 404 1000)Liam O'Mahony Chief ExecutiveMyles Lee Finance DirectorEimear O'Flynn Head of Investor RelationsMaeve Carton Group Controller Europe Materials: euro 47 million The Europe Materials Division completed four acquisitions and a joint ventureinvestment at a total cost of euro 47 million during the second half of 2006.Incremental annual sales arising from these transactions amount to euro 30million. Ireland The Group's activities in Northern Ireland, operating under the Northstonebrand, span a broad portfolio of products including readymixed concrete andassociated products, building and engineering services, aggregates, asphalt andprecast units. The acquisition in July of Salmor, a leading manufacturer offrames, covers and other accessories for the underground cable and water supplyinfrastructure network, represents an opportunity for Northstone to expand intoother related markets in Ireland and the United Kingdom. Salmor has annualsales of euro 12 million and operates from a single facility in Lurgan, Co.Armagh. In December, a newly-formed joint venture in which CRH and Colas Teoranta eachhave a 50% share acquired bitumen storage terminals in Dublin and Belfast ports. CRH is a major consumer of bitumen for its blacktop operations in Ireland.These strategically located storage facilities will allow the group to enterinto longer-term supply agreements and they also provide the opportunity toutilise storage capacity to take advantage of low season bitumen pricediscounts. Poland In July, the Division acquired three concrete paving plants in Poland, fromJadar. These paving assets, which are located in Warsaw, Kielce and Rzeszow andgenerate annual sales of euro 13 million, expand and complement CRH's existingpaving operations in Poland. Ukraine The acquisition of Bekhovsky, an aggregates producer located in Ukraine'sZhytomer region, 140 kilometres northwest of Kiev, was completed in August andcomplements the acquisition in February of the Popeliansky quarry. With annualsales of euro 4 million, Bekhovsky facilitates further expansion into the Kievaggregates market. Portugal In September, CRH's joint venture Secil, in which the Group has a 49% stake,acquired the remaining 50% of Ecorresiduos, a slag grinding plant located in theLisbon area. Secil intends to develop this company, which has annual sales ofeuro 1 million, into a slag and fly-ash trading company. Europe Products : euro 121 million Europe Products completed seven acquisitions at a total cost of euro 121 millionin the second half of the year. The annual incremental sales arising from thesetransactions amount to euro 130 million. Concrete Products In July, the Concrete Products group acquired Rhebau, a manufacturer of watertreatment and sewerage products based in North Rhine-Westphalia in Germany withannual sales of euro 10 million. Located close to the Dutch and Belgianborders, Rhebau will form part of the group's Architectural Products Beneluxoperation and provides an excellent fit with its water treatment activitieswhich are set to benefit from increasing water conservation regulations acrossEurope. July also saw the purchase of Oeterbeton, a precast concrete manufacturer basedin Belgium. This acquisition, with annual sales of euro 25 million and threestate-of-the-art production facilities, strengthens the group's position in theBenelux flooring and hollow wall market and extends the current product offeringto encompass pre-stressed shuttering slabs. In August, the group acquired Chapron Leroy, a utility products manufacturerproducing rainwater boxes, fences and other niche products and generating euro 6million in annual sales from a single location in the northwest of France. CRH's entry into Italy was marked in October with the acquisition of Record, aleading concrete landscaping manufacturer in the Lombardy and Piedmont regionwith annual sales of euro 23 million. Based in the economically strong north ofthe country and operating from three locations, Record provides an excellentbase in Italy as well as offering possibilities for best practice andbenchmarking with existing Concrete Products operations in Europe. Building Products The acquisition in July of Construction Accessories Ltd. (CAL), an Irishdistributor of metal and plastic construction accessories, further develops andgrows the group's Construction Accessories platform. With annual sales of euro8 million, CAL operates from a single location near Dublin and sells throughoutthe Republic of Ireland. In August, the Building Products group acquired AVZ, a leading developer,assembler and distributor of roller shutter and awning systems in theNetherlands. With annual sales of euro 54 million, the transaction representsan important first step in building a Europe-wide presence in this niche sector,which has close strategic links with the Group's existing Daylight & Ventilationand Fencing & Security activities. The purchase in September of Tangorail, the UK market leader in non-weldedrailing systems, further advances the Fencing & Security group's strategy to bea leading player in outdoor security solutions for the non-residential market.With annual sales of euro 4 million, the company operates from a singleproduction facility in Walsall (UK Midlands). Europe Distribution: euro 18 million Europe Distribution completed three transactions during the second half of 2006in the Netherlands, Switzerland and France adding a total of 4 buildersmerchants branches to its existing network with annual incremental sales of euro49 million. In July, Kachelhuus a single-branch builders merchant in Ede in the east of theNetherlands with annual sales of euro 6 million was acquired. The acquisition, also in July, of BMH Hagendorf AG and Dennler AG added afurther two branches to our network of builders merchants in German-speakingSwitzerland. With combined annual sales of euro 35 million, these two branchesoffer opportunities for internal efficiencies and synergies. In August, the Distribution group acquired Etrechy Materiaux, a single-branchbuilders merchant located in the Ile-de-France region. With annual sales of euro8 million, Etrechy represents an excellent geographical fit with the group'sexisting operations in Ile-de-France. Americas Materials: euro 69 million The Americas Materials Division completed seven bolt-on acquisitions in thesecond half of 2006 at a combined cost of US$ 87 million (euro 69 million). Theannual incremental sales arising from these transactions amount to US$ 55million. Central Four acquisitions were completed in the Central region contributing annual salesof US$ 18 million. In August, the Shelly group concluded two small transactions in the Columbusregion of Ohio. Certain assets of Baird Concrete Products, a readymixed concreteproducer and block manufacturer located in Coshocton, together with certainassets of Tri-Son Concrete, a readymixed producer located in Zanesville (bothlocations within 60 miles of Columbus, Ohio), were acquired. With combinedannual sales of US$ 5 million, these acquisitions provide additional costsynergies and further readymixed concrete market penetration for Shelly'sexisting business in the area. Early in 2006, an Industrial Minerals group was established within the Centralregion as part of Americas Materials' strategy to exploit the value of existinghigh-calcium limestone and dolomitic reserves with a focus on expansion in theindustrial mineral sector both organically and through acquisition. In October,two acquisitions were completed by this new group. Fletcher Limestone,operating from one location in North Carolina, focuses on the mining, crushingand screening of various stone sizes for the local aggregates and decorativestone market as well as the processing of white stone in various sizes for arange of industrial applications including paints, plastics and vinyl. From itsGeorgia limestone crushing facility, H&S Whiting supplies calcium carbonate to avariety of industries including carpet, asphalt roofing and animal feed. Withcombined annual sales of US$ 13 million, both acquisitions provide additionalfine-grinding capacity for white products in existing CRH markets whilst alsooffering increased geographic coverage. West Three bolt-on acquisitions in the West region strengthen and complement existingactivities and provide incremental annual sales of US$ 37 million to thisregional grouping. In September, a 110-acre site was acquired from Gosney & Sons, an aggregates andconstruction business in Bayfield, Colorado. With access to 3.7 million tons ofaggregates reserves and annual sales of US$ 3 million, the acquisition securesthe reserves requirements of the existing Four Corners materials business in thesouth-western Colorado and north-western New Mexico markets. Summit Stone and Consolidated Concrete, located in Boise, Idaho and acquired inOctober, supplies aggregates and produces readymixed concrete with a primaryfocus on the commercial sector. With US$ 18 million in annual sales, thetransaction expands Americas Materials' existing presence in Idaho. Octoberalso saw the acquisition of Egge Sand & Gravel, a vertically integratedaggregates, asphalt and construction company based in Eugene, Oregon. Withannual sales of US$ 16 million, this acquisition represents a significantaddition to recently-acquired businesses in the region as well as providingpurchasing benefits. Americas Products: euro 53 million Five acquisitions were completed in the second half of 2006 at a combined costof US$ 68 million (euro 53 million) yielding annual incremental sales of US$ 88million. Precast Group McArthur Concrete Products, a precast drainage and manhole products manufacturerwith annual sales of US$9 million, was acquired in August. The company operatesfrom a single location in Acworth, Georgia and primarily serves utilities andcontractors for underground applications. Its location northwest of Atlantacomplements our existing precast business in the Atlanta area. In December, thegroup acquired BES Concrete Products, a meter box manufacturer with annual salesof US$ 9 million. The company manufactures from a single location in Tracy,California and its primary customers are electrical distributors in the Northernand Central valley regions of California. BES's location and product-mixcomplement our existing meter box business in Madera, California which primarilysells to waterworks distributors in the same regions. Architectural Products Group (APG) In July, APG acquired the assets of Rhino Block & Materials, a masonrymanufacturing and distribution company operating from a single block plantlocated in West Des Moines, Iowa. Rhino adds annual sales of US$ 13 million anda well-run facility to APG's existing operations in the Midwest and provides aplatform from which to grow the Belgard hardscapes business in Iowa. InAugust, the group acquired certain assets of W.P. Rose Supply, a distributor ofblock, brick and other construction supplies serving eastern North Carolina,adding annual sales of US$ 7 million and an established, centrally-locatedwarehouse and sales yard to APG in the region. Glass Group In August, the Glass Group acquired Antamex, a leading Toronto-basedmanufacturer of high-performance curtain wall systems and architectural panelsfor commercial, institutional and multi-storey condominium construction. Annualsales amount to approximately US$ 50 million. Operating from threemanufacturing facilities in Canada and with offices in Canada and London,Antamex is an excellent strategic fit for the Glass Group, combininghigh-performance curtain wall and architectural panel capabilities with theGlass Group's existing product breadth. Americas Distribution: euro 92 million Four acquisitions were completed by the Americas Distribution group (AlliedBuilding Products) in the second half of 2006 at a combined cost of US$ 118million (euro 92 million) yielding annual incremental sales of US$ 216 millionand enlarging Allied's network by 12 branches. Three of the acquisitions, all completed in October, distribute interiorproducts. Builders Gypsum Supply, with five branches and annual sales of US$145 million, is one of the largest distributors of interior products in Texas.This acquisition is Allied's first in Texas; the combination of positive marketconditions and population growth trends in the region will give Allied a goodbase from which to grow the business. Lakehill Ventures is a two-branchinterior products distributor based in western central Florida with annual salesof US$ 16 million. All-Star Building Supplies, a single-branch distributor ofstucco, lath and plastic trim based in southern Florida, has annual sales of US$6 million. All-Star's products are used for exterior cladding applications andthe business is being merged with Allied's existing interior products businessesin the area. RRS, Inc., acquired in November, is the largest roofing and siding distributoron the Hawaiian Islands. With four branches and annual sales of US$ 49 million,RRS is Allied's first roofing and siding acquisition in Hawaii. * * * * * CRH plc, Belgard Castle, Clondalkin, Dublin 22, Ireland TELEPHONE +353.1.4041000 FAX +353.1.4041007 E-MAIL [email protected] WEBSITE www.crh.com Registered Office, 42 Fitzwilliam Square, Dublin 2, Ireland This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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