1st Nov 2005 12:00
CRH PLC01 November 2005 N E W S R E L E A S E 1 November 2005 SIGNIFICANT EXPANSION OF CRH'S US MATERIALS OPERATIONS CRH plc, the international building materials group, announces that it hasrecently completed three transactions which significantly expand its Materialsoperations in the US. The total combined consideration of US$413 million (euro344 million) comprises cash, including debt assumed, of US$361 million (euro 301million), plus deferred payments with a net present cost of US$52 million (euro43 million). CRH has acquired the aggregates, asphalt, paving and construction assets of theMountain Companies, a vertically integrated business operating in theAppalachian regions of eastern Kentucky, southwest Virginia and along theKentucky/West Virginia state line. With permitted reserves of over 400 milliontons at eight quarries and one sand & gravel pit, Mountain producesapproximately 5 million tons of aggregates and 2 million tons of asphaltannually. CRH has also acquired 50% of Bizzack, Inc., Mountain's heavyconstruction affiliate. Bizzack undertakes specialist rock clear-cutting andearth-moving work, a feature in this rugged and mountainous region. Mountainwill be integrated with the Materials Division's West Virginia subsidiary, WestVirginia Paving, to form a major new regional business unit within the MaterialsDivision's Central group. The Mountain deal represents a significant expansion for CRH's AmericasMaterials Division into Kentucky, Virginia and southwest West Virginia. Aftera record 2003, highway construction activity in Kentucky declined significantlyin 2004, however, the market is forecast to recover steadily from 2005, aided bya significant increase in federal funding under SAFETEA-LU which is expected tounderpin several large, federally-funded new infrastructure projects in theregion. In Minnesota, CRH has purchased the assets of Southern Minnesota Construction("SMC"), the leading aggregates and asphalt supplier in the south-central regionof the state. SMC has over 80 million tons of reserves and annual volumes ofapproximately 3 million tons of aggregates and 0.5 million tons of asphalt. SMCis a superb geographic fit with the Materials Division's existing Iowa businessand is a significant market expansion into a new state for the Division. It willcontinue to be managed by the existing management team as a stand-alone businesswithin the Materials Division's West group. For the year ended 31 December 2004, combined sales for the acquired businesses(including 50% of Bizzack) amounted to US$294 million, significantly lower thanin 2003, reflecting both the decline in Kentucky highway spending from therecord 2003 level and protracted wet weather in southern Minnesota. 2004 EBITDAamounted to US$52 million with a much improved outturn expected for the currentyear. Commenting on the transactions, Liam O'Mahony, Chief Executive, said: "These arevery well-managed businesses with excellent reserves and strong marketpositions, which represent a unique geographic fit with the Materials Division'sexisting activities. Integration of the businesses should facilitate substantialcost savings while strengthening the Division's market position and giving ussignificant new growth platforms in Kentucky, Virginia and Minnesota." Contact CRH 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 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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