3rd Jan 2008 07:00
CRH PLC03 January 2008 D E V E L O P M E N T S T R A T E G Y U P D A T E 3 January 2008 CRH ANNOUNCES ADDITIONAL SECOND HALF 2007 ACQUISITIONS OF EURO 693 MILLION BRINGING FULL YEAR SPEND TO EURO 2.2 BILLION CRH plc, the international building materials group, today announces 37acquisitions totalling euro 693 million undertaken during the second half of2007. These initiatives are in addition to the separate announcements regardingthe Cementbouw BV buyout (announced in August) and five Americas Materialstransactions: the acquisition of certain Cemex assets in Florida and Arizonaannounced at the end of November and the acquisition of Conrad Yelvington,Eugene Sand & Gravel, Cessford Construction and McMinn's Asphalt and ProspectAggregates which were announced in mid-September. The combined second half 2007announcements bring acquisition spend to • 1.2 billion for the period andtogether with a first half development spend of almost • 1.0 billion, results ina record full year acquisition spend of • 2.2 billion on 78 acquisitions. Commenting on these developments, Liam O'Mahony, CRH Chief Executive, said: "Development activity over the course of 2007, spread evenly across our Europeand Americas operations, shows yet again the Group's ability to deliver at pace,a broad range of strong, value-adding transactions. Total acquisition spend of€2.2 billion surpasses 2006's record activity level, and the transactionscompleted will contribute greatly to the objective of delivering acquisitivegrowth and increasing shareholder value." The initiatives contained in this Development Strategy Update are as follows: • Europe Materials - 5 acquisitions for euro 22 million Five bolt-on acquisitions were completed, further strengthening operations in Ireland, Finland, Ukraine and Slovakia. • Europe Products - 7 acquisitions for euro 172 million The Concrete Products group completed four acquisitions; a structural products operation in Denmark, two architectural products companies in Belgium and one in Romania. The Clay group acquired a Polish clay brick, block and roof tile producer. The Building Products group purchased two businesses, a Fencing business and a Construction Accessories business, both in the UK. • Europe Distribution - 5 acquisitions for euro 27 million A total of eleven builders merchants and three DIY stores were added to Europe Distribution's branch network as it completed two acquisitions in Germany, two in the Netherlands and one in Switzerland. • Americas Materials - 10 acquisitions for euro 124 million The West operations completed four bolt-on transactions and APAC completed three transactions. Three other acquisitions further strengthened the businesses in the New England, New York/New Jersey and Central regions. • Americas Products and Distribution - 10 acquisitions for euro 348 million The Precast Group completed two acquisitions, one with locations in both the US and Ireland and one with operations in California. The Architectural Products Group completed six acquisitions - two acquisitions in Florida and two acquisitions with operations in New Mexico and Georgia. Two further acquisitions in the Midwest and in Texas and California were also added. The Distribution group added two interior product businesses; one with 6 branches in Florida and one with 21 branches across the western United States. Europe Materials: euro 22 million The Europe Materials Division completed 5 acquisitions, adding incrementalannual sales of euro 14 million, at a total cost of euro 22 million. Ireland Northstone, the brand under which Europe Materials' activities in NorthernIreland operate, acquired T. O'Connell & Sons, a sand and gravel extractionbusiness with a small concrete block operation in September. With annual salesof euro 5 million, the acquisition secures long-term reserves for Northstone inthe Derry region as well as providing an in-house supply of aggregates for themanufacture of downstream products. Finland In November, Murskauskolmio Oy, a mobile crushing and aggregates business withannual sales of euro 5 million was acquired. Located in the greater Helsinkiarea, Murskauskolmio has extraction rights over high quality aggregates atlocations adjacent to CRH's existing business in the area. Ukraine Two concrete plants with combined annual sales of euro 3 million were acquiredstrengthening the Group's presence in downstream activities in Ukraine. InOctober, a precast plant in Shchyrets near the city of Lvov, 360 km west of Kievwas acquired while Belotserkovsky, a manufacturer of vibrated and centrifugedpoles and other concrete products, located 85 km south of Kiev, was acquired inDecember. Slovakia In August, the Division acquired the assets of Jablonica Quarry, a hard rockaggregates producer in Slovakia with sales of euro 1 million. The quarry,located 55km north of Bratislava, complements CRH's existing aggregatesoperations in the region and increases its reserve base. Europe Products: euro 172 million Europe Products completed 7 acquisitions at a total cost of euro 172 million inthe second half of the year. The annual incremental sales arising from thesetransactions amount to euro 192 million. Concrete Products The Concrete Products group completed four acquisitions during the second halfof 2007, one structural products acquisition in Denmark , two architecturalproducts acquisitions in Belgium and one in architectural products in Romania. In August, the Concrete Products group acquired Expan, a lightweight concreteproducer based in Denmark , operating from eight facilities mainly located tothe west of the country. With annual sales of euro 107 million, the companyproduces both lightweight and normal concrete panels as well as lightweightfloors. The acquisition of Expan completes the group's portfolio of products aswell as further consolidating its current market position and providing theopportunity to realise synergies with other Danish group companies. In October, two companies were acquired in Belgium . Olivier is a manufacturerof prefabricated basements, water treatment and rainwater storage tanks andother specialist concrete products. Operating from a single location inFlanders and with annual sales of euro 9 million, Olivier's product range andgeographical coverage complement and further the strategy of Concrete'sInfrastructure Products Benelux group to develop strong positions in its coremarket segments. MBI Beton Belgium, a manufacturer of private and publiclandscaping products operates from a single location in Ghent and has annualsales of euro 16 million. The acquisition will improve the group's marketposition and give a better geographical spread in the Belgian private and publiclandscaping market. With its UK distributor network, MBI also provides theopportunity for the group to enter the UK private landscaping market. In December the Concrete Products group concluded the acquisition of Elpreco,one of Romania 's leading producers of building materials. Operating from twosites at Titu and Craiova in Southern Romania , Elpreco manufactures aeratedconcrete blocks, concrete roof tiles, pavers and utility products. With annualsales of euro 30 million, the acquisition is an important step in the group'sstrategy to grow its business in Central and Eastern Europe. Clay In November, the Clay Products group acquired Cerabud, a medium-sized Polishclay brick, block and roof tile producer located in central west Poland. Withannual sales of euro 10 million, Cerabud benefits from a strong brand name inthe rapidly developing regions of Poznan and Wroclaw. The acquisition providesaccess to good quality clay reserves as well as creating a strong regionalpresence in blocks and roof tiles. Building Products The group completed two acquisitions in the UK during the month of July, onewithin its Fencing & Security activities and one in Construction Accessories. The acquisition of West Midland Fencing, a fencing contracting business basednear Birmingham with annual sales of euro 12 million, strengthens the group's UKbusiness through process improvements and synergy related benefits. Theaddition of FCA Wholesalers Ltd ("Forsite"), a wholesaler of generalconstruction accessories in the UK and Ireland , further advances theConstruction Accessories group's strategy of geographical expansion. Withannual sales of euro 8 million, Forsite is the UK 's largest wholesaler ofgeneral construction accessories (e.g. plastic and steel wire spacers, tyingwire and concrete spacers etc.) and the sole distributor in the UK and Irelandfor a range of construction accessories. Europe Distribution: euro 27 million Europe Distribution completed 5 transactions during the second half of 2007,adding a total of 11 builders merchants and 3 DIY branches to its existingnetwork with annual incremental sales of euro 52 million. BauKing, the group's 48% joint venture in Germany , completed two acquisitionsadding a total of nine builders merchants branches and one DIY branch to itsgrowing network. In July it acquired Kapella Baustoffe which has annual sales ofeuro 57 million (100%). Kapella operates seven builders merchant branches andone DIY branch located in the Berlin-Brandenburg metropolitan area and offersexcellent potential for further growth as well as providing performanceimprovement opportunities with our existing businesses. In August, BauKingacquired Moller & Forster Baustoff a two-branch general builders merchantlocated in the Hamburg region with annual sales of euro 13 million (100%). Bouweijden Almere, which operates two GAMMA DIY stores in the city of Almere(central Netherlands ), was acquired in September. The acquisition, with annualsales of euro 11 million, represents an attractive add-on to our existing DIYnetwork and results in CRH being the sole Intergamma franchisee in Almere,considered to be one of the Netherlands' fastest growth regions. In October, thegroup acquired Haringsma Hout-en-Bouwmaterialen, a single-branch buildersmerchant with annual sales of euro 5 million, extending the Group's network inthe Utrecht area. The assets of G. von Gunten AG, a builders merchant operating from a singlelocation in Thun, on the border of German-speaking and French-speakingSwitzerland were acquired in December. With annual sales of euro 2 million, theacquisition expands the sanitaryware network of CRH in the region. Americas Materials: euro 124 million The Americas Materials Division completed 10 bolt-on acquisitions in the secondhalf of 2007 at a combined cost of US$ 180 million (euro 124 million). Theannual incremental sales arising from these transactions amount to US$ 203million. Central The readymixed and concrete block and precast assets of US Concrete Inc.,located in Knoxville, Tennessee and in Delaware were acquired in November. TheKnoxville assets, comprising four ready-mixed concrete plants represent a goodfit with the group's existing business in the region. In Delaware, fivereadymixed concrete plants, one block plant and one precast plant, will, aftersome restructuring, allow for significant overhead savings and productionefficiency gains. Some surplus asset disposals will result from the acquisitionpost-integration. Annual sales of the combined locations amount to US$ 36million. West November saw the acquisition of HK Contractors Inc., an integrated aggregates,asphalt and construction company based in Idaho Falls , Idaho with annual salesof US$ 87 million. The acquisition offers a significant geographic expansionopportunity for the group in the Rocky Mountain region as well as the ability toachieve operating efficiencies with existing businesses in Jackson, Wyoming andPocatello, Idaho. Hales Sand & Gravel Inc., based in Redmond and Elsinore ,Utah is an integrated aggregates, asphalt, readymixed concrete and paving andconstruction company with annual sales of US$ 15 million. Acquired in December,it will serve to expand the geographical reach of the West Division's StakerParson group in Central Utah. The Staker Parson group also completed two otheracquisitions during the period. In August, it added International Stone, asmall decorative stone business with annual sales of US$ 5 million and outletsin Boise , Caldwell and Eagle, Idaho to its portfolio allowing the group tofurther expand into the Idaho market. In December, Hancock Materials, anintegrated aggregates and readymixed concrete business operating in Page,Arizona was acquired. With annual sales of US$ 3 million, this acquisitionallows Staker Parson to expand into Northern Arizona - a logical expansion ofits southern Utah business. APAC In August, the APAC group acquired Southeast Asphalt, a small asphalt producer,based in Ridgeland , South Carolina with annual sales of US$ 1 million. MathewsConstruction and Jasper Asphalt, an aggregates and asphalt operator based inJasper, Texas was acquired in November and provides an excellent strategic fitwith APAC's Texas based operations. The company, which has annual sales of US$18 million has an excellent logistical advantage in its ownership of a railsiding on the region's railway line - a most cost effective way to transportaggregate supplies. Bellco Materials Inc., an integrated aggregate, asphalt andconstruction company based in northeast Oklahoma with annual sales of US$ 31million, was acquired in December. Bellco's well located and permitted reservesincrease APAC's aggregate presence in the area and provide cost savings in termsof scale and operating efficiencies for the extended operations. Northeast Two smaller bolt-on acquisitions were also completed during the period addingtotal incremental sales of US$ 7 million. Madden Concrete, a readymixedconcrete producer located in Utica, New York, was acquired in July. Theacquisition grows our aggregate and asphalt businesses in the region andprovides a good platform on which to pursue other growth opportunities. In ourNew England group, the quarry operations of Burgess Brothers, based inBennington , Vermont , were acquired in September. Burgess provides the groupwith the opportunity to establish a presence in a new market area withinVermont. Americas Products and Distribution: euro 348 million 10 acquisitions were completed in the second half of 2007 at a combined cost ofUS$ 501 million (euro 348 million) yielding annual incremental sales of US$ 766million. Precast Group Carson Industries, a manufacturer of plastic and polymer utility boxes,equipment pads and material handling products was acquired in July. With fourmanufacturing plants in the US and one in Ireland, Carson primarily servestelecommunication companies, utilities, landscape architects and municipal wateragencies. Its market extends to all fifty states of the US and much of Europe .Carson 's long established and effective national sales and distributionorganisation further strengthens the Precast Group's product offering and marketpositioning. Inland Concrete Enterprises, acquired in December, is a manhole anddrainage manufacturer which operates from 2 locations in Southern California .Inland's customers are primarily underground utility and sewer and drainage pipecontractors. The business complements Precast's existing operations in theregion as well as providing synergies in terms of costs and productionefficiencies. Architectural Products Group (APG) The assets of Rinker Block, consisting of a single block plant in Albuquerqueand a cinder mine in Santa Fe, New Mexico, were acquired in July. Sellingprimarily to residential and commercial contractors, these assets provide a baseto grow APG's business in New Mexico as well as allowing for freight relatedsynergies on existing sales into the region. Ruck Brothers Brick, a masonry distribution company operating from two locationsin western central Florida was acquired in August. Ruck complements the group'sgrowing masonry and stone distribution platform covering the majority ofnorthern and central Florida. August also saw the acquisition of AmerimixIndustries and Cementec Industries related companies based in St. Petersburg ,Florida manufacturing bagged and bulk mortar and stucco mixes. These businessessell to contractors, distributors and the retail channels, and represent alogical bolt-on to APG's Florida masonry operations as well as providing anopportunity to get involved in the contractor-focused bulk mortar market. The Lafarge North America block assets in Georgia and New Mexico were acquiredin November. The Georgia assets, consisting of seven plants and three saleyards are a good strategic fit with APG's existing operations in the surroundingAtlanta area whilst in New Mexico, the operations consisting of one block plantand a small resale operation in Santa Fe, complement the Rinker Block businessacquired in July. Two acquisitions were completed in December. Headwaters Mortar and Stucco Group,with operations in Texas, California and Georgia, will benefit APG's existingoperations by widening the group's product offering and production capabilitiesin those states. In the Midwest, River City Landscape Supply, a manufacturerand distributor of bulk and bagged soils, mulches and decorative stone, expandsAPG's presence in the Lawn & Garden segment in this region. Distribution Group (Allied) Florida Waterproofing Supply, was acquired in September. With six locations inFlorida , the acquisition will accommodate the growth of Allied's commercialcustomer base as well as providing a platform on which to expand into newmarkets in the region. Acoustical Materials Services (AMS), a major independent interior productsdistributor in the western United States was acquired in November. AMS operatesa total of twenty-one locations in California (14), Nevada (2), Hawaii (1),Arizona (1), and Baja California, Mexico (3). The acquisition greatlystrengthens Allied's Interior Products (wallboard, steel studs and acousticalceiling systems) presence in the western United States, forms a strong platformfor future growth and will deliver purchasing and overhead synergies. * * * * * * 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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