21st Aug 2006 13:00
CRH PLC21 August 2006 N E W S R E L E A S E 21 August 2006 CRH TO ACQUIRE ASHLAND PAVING AND CONSTRUCTION, INC. (APAC) IN GROUP'S LARGEST EVER TRANSACTION Agreement to acquire APAC CRH plc, the international building materials group, announces that its USsubsidiary, Oldcastle Materials, Inc., has reached agreement to purchase AshlandPaving And Construction, Inc. (APAC) for a total consideration, including zeronet debt at acquisition, of US$ 1,300 million (euro 1,008 million); the finalprice to be adjusted for seasonal working capital and some other accounts atcompletion. Goodwill arising on the transaction is estimated at approximatelyUS$450 million. This agreement follows extensive due diligence under the termsof an exclusivity agreement with APAC's parent company, Ashland Inc., announcedon 19 June 2006. Completion of the purchase of APAC, which has receivedantitrust clearance, is anticipated before the end of August. CRH will financethe acquisition using debt. APAC's business APAC, headquartered in Atlanta , GA , is a leading US aggregates, asphalt andheavy highway construction company with approximately 9,700 employees andextensive operations in 14 mid-western and southern states. In the 12 monthsending June 2006 sales amounted to US$ 2.9 billion with profit before interest,tax, depreciation and amortisation (EBITDA) of approximately US$ 220 million,before charging depreciation and amortisation of US$ 106 million. Gross assetsas at 30 June 2006 were US$1,665 million. In the year ended June 2006 APAC produced 32.5 million tons of aggregates, 31million tons of asphalt and 1 million cubic yards of readymixed concrete.Approximately one-third of APAC's aggregates production and two-thirds ofasphalt production are consumed internally by APAC's construction operations. APAC has vertically integrated aggregates, asphalt and highway constructionoperations in Kansas , Missouri , Oklahoma , Arkansas and Mississippi , all withleading regional market positions. APAC is also a leading integrated player inthe Memphis area of western Tennessee , in eastern Tennessee/western NorthCarolina and in southern Florida . Total permitted reserves amount to over 2billion tons. In addition APAC has significant asphalt and highway constructionoperations in West Virginia , Virginia , Alabama , Georgia , the Carolinas,northern Florida and Texas . Management APAC's President Kirk Randolph who has over 20 years experience with APAC willcontinue to have responsibility for APAC as part of CRH's Americas Materialsdivision which is led by Mark Towe working closely with Tom Hill head of ouroverall Americas business. Key APAC operational management will remain with thebusiness and join the Americas Materials division. In addition, a number ofsenior managers from Americas Materials will be assigned to work with theexisting APAC team to assist with its integration. CRH Americas Materials division CRH's existing Americas Materials division is the number one US asphalt producerwith 2005 volumes of 41 million tons; the fourth largest US aggregates companywith 2005 volumes of 162 million tons and a top 10 readymixed concrete playerwith volumes of 8.5 million cubic yards. The division operates in 32 US states,primarily in the Northeast, Midwest and West. In the year ending December 2005the Americas Materials Division reported sales of US$ 3.9 billion and EBITDA ofUS$ 613 million, before charging depreciation and amortisation of US$ 205million. APAC will be integrated with the existing Americas Materials divisionalstructure which is currently divided into four major regional groupings; NewEngland , New York / New Jersey , Central and West. Acquisition benefits The acquisition of APAC represents a major expansion for CRH into new materialsmarkets in mid-western and southern US states and significantly increases CRH'sposition as a top tier aggregates and leading asphalt producer in the US . APACprovides increased exposure to US infrastructure spending and a developmentplatform for future growth in new regions. The acquisition offers significantscope for margin improvement through administrative, operational and purchasingsynergies - estimated at US$ 20 million per annum in the near term rising to US$40 million within three years - and is expected to contribute positively to CRHearnings. Commenting on the agreement to purchase APAC, Liam O'Mahony, CRH ChiefExecutive, said: "I am delighted that agreement has been reached for thepurchase of APAC which represents a major milestone in the development of ourAmericas Materials business and the largest ever transaction to be completed byCRH. We aim to build on this significant new platform through enhancing thematerials focus of APAC's business and through the application of the AmericasMaterials Division's vertically integrated approach to aggregates, asphalt andhighway construction." ----- This announcement contains certain forward-looking statements as defined underUS legislation. By their nature, such statements involve uncertainty; as aconsequence, actual results and developments may differ from those expressed inor implied by such statements depending on a variety of factors including thespecific factors identified in this announcement and other factors discussed inour Annual Report on Form 20-F filed with the SEC. All references to tons in this announcement are to short tons in line with USpractice. ----- CRH will host an analysts' conference call at 2.30 p.m. BST today to discussthis announcement. The dial-in number is +44 20 7138 0816. A recording of theconference call will be available from 4.00 p.m. BST by dialling +44 20 78061970. The security code for the replay will be 2741758#. A presentation to accompany this call will be available from 1.00 p.m. on CRH'swebsite at www.crh.com. Contact CRH at Dublin 404 1000 (+353 1 404 1000) Liam O'Mahony, Chief Executive Myles Lee, Finance Director Eimear O'Flynn, Head of Investor Relations Maeve 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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