5th Jul 2006 07:00
CRH PLC05 July 2006 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 5 July 2006 CRH ANNOUNCES ADDITIONAL FIRST HALF DEVELOPMENT INITIATIVES OF EURO 372 MILLION BRINGING TOTAL FIRST HALF SPEND TO OVER EURO 800 MILLION CRH plc, the international building materials group, today announces 36development initiatives totalling euro 372 million (including capitalexpenditure of euro 21 million on two large capital projects) undertaken duringthe first half of 2006. These initiatives, which are in addition to theacquisition of MMI Products, Inc. for US$ 350 million (euro 280 million)announced on 26 April 2006 and the acquisition of the Halfen-Deha Group for euro170 million announced on 2 May 2006, bring total development spend for the firsthalf of 2006 to over euro 800 million. Commenting on these developments, Liam O'Mahony, CRH Chief Executive, said: "The pick-up in development momentum experienced in the latter half of 2005 hascontinued into 2006 with a strong level of spend during the first six months ofthis year, spread across all our reporting segments and regions. The dealsannounced today, combined with the two larger acquisitions completed during theperiod, reflect the Group's continuing commitment to identifying and completingtransactions at prices which we believe will create long-term value for CRH'sshareholders." The initiatives contained in this Development Strategy Update are as follows: • Europe Materials - 7 acquisitions/investments and 1 capital project foreuro 36 million Seven bolt-on transactions were completed during the period, expanding theDivision's existing operations in Switzerland , eastern Europe and Portugal ,while work commenced on a major development project in Ireland . • Europe Products - 5 acquisitions for euro 54 million Four acquisitions were completed by the Concrete Products group in Switzerland ,Belgium , France , and the United Kingdom , and the Clay Products group acquiredone business in the Netherlands . • Europe Distribution - 3 acquisitions for euro 20 million Three acquisitions, in the Netherlands , Belgium and Switzerland , added atotal of six outlets to the Group's existing builders merchanting network inEurope . • Americas Materials - 12 acquisitions for euro 169 million Six acquisitions in the West region and four in the Central region, togetherwith one acquisition in each of the New York/New Jersey and New England regions. • Americas Products - 5 acquisitions and 1 capital project for euro 53 million The Architectural Products Group (APG) bought the Sakrete(R) trademark for usein specified sales territories and also commenced construction of a new blockplant in Atlanta , Georgia . In addition, the Precast Group completed twoacquisitions in Colorado and Indiana , and the Glass Group acquired twobusinesses in Texas and Florida . • Americas Distribution - 2 acquisitions for euro 40 million Two acquisitions were completed by the Distribution Group in Florida and NorthCarolina , adding 13 branches to its growing interior products division. 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 36 million The Europe Materials Division completed seven acquisitions/investments at atotal cost of euro 22 million during the first half of 2006. Incremental annualsales arising from these transactions amount to euro 12 million. In addition,work commenced on a significant capital investment project in Ireland at a totalcost of euro 14 million. Switzerland In January, JURA-Holding acquired Frenke Beton, a readymixed concrete producerbased in Holstein . Frenke, which also trades in aggregates and gravel and hasannual sales of euro 3 million, gives JURA access to the canton of Basel , oneof the most important economic regions of Switzerland . The acquisition hasbeen integrated with JURA's existing operations in the German-speaking region ofSwitzerland . Eastern Europe In January, Rudus Eesti acquired Kehra, the second biggest producer of concretelandscape products in Estonia , with annual sales of euro 2 million. Theacquisition alleviates capacity constraints at Rudus Eesti's plant in Tallinnand provides an opportunity to diversify into concrete blocks. The acquisition of Kamenolomy, a leading regional aggregates producer in theTrencin region of Slovakia , was also completed in January. With annual sales ofeuro 3 million, the company operates 3 quarries along the main highway corridorbetween Bratislava and Zilina. The acquisition, which has been integrated intothe Poland-based OKSM organisation, expands Europe Materials' aggregateoperations into Slovakia and the Czech Republic . In February, Podilsky Cement acquired Popelniansky, a producer of graniteaggregates with annual sales of euro 1 million, which is located 110 kilometressouthwest of Kiev in the Zhytomer Oblast (region). The acquisition provides anentry into the aggregates market in central and eastern Ukraine and facilitatesa possible entry into the blacktop sector. It will also allow Podilsky Cement toparticipate more actively in the expanding construction market in Kiev andZhytomer. The paving operation of Pater Firm Bruk Company, located near Bialystok inPoland , was acquired in May. This acquisition strengthens CRH's existing pavingoperations in Lodz and supports the Group's focus on this area in central Poland. Grupa Ozarow in Poland expanded into the sand-lime brick business with thepurchase of a 32.3% stake in Silikaty Ostroleka and Silikaty Lezajsk in Marchand a 15.13% stake in Silikaty Ludynia in June. These combined businessescomprise Grupa Silikaty, which is the second-largest producer of sand-limebricks in Poland . Sand-lime bricks are an important downstream product for thelime industry in which CRH is a leading player in the Polish market. CRH isalready a major producer of sand-lime bricks in the Netherlands . Portugal In March, CRH's joint venture Secil, in which the Group has a 49% stake,acquired 100% of Sicobetao, a readymixed concrete producer located incentral-north Portugal, with annual sales of euro 3 million. The acquisitionstrengthens Secil's position in this region of Portugal . Ireland Clogrennane Lime has commenced construction of a new 100,000 tonnes per annumvertical regenerative kiln in County Clare . The investment is expected to costeuro 14 million, and will provide sufficient capacity to supply lime for fluegas desulphurisation at the Electricity Supply Board's Moneypoint station and tomeet expected market growth. Europe Products : euro 54 million Europe Products completed five acquisitions comprising Supreme Concrete andthree smaller transactions in the Concrete Products group and one acquisition inthe Clay Products group, at a total cost of euro 54 million. The annualincremental sales arising from these transactions amount to euro 86 million. Concrete Products In February, the Concrete Products group acquired Element AG and Prebeton SA,which were subsequently merged to create the leading producer of prefabricatedstructural concrete elements in Switzerland . With annual sales of euro 35million, the group operates from three locations, two of which are located inthe Bern region with the third near Zurich. The deal strengthens CRH's positionin the Swiss prefabricated structural concrete market. In March, the group acquired ATA, a natural stone trader in France, andVibrobeton, a dedicated stair producer in Belgium . ATA complements Stradal/BMI's landscaping activities, which are focused on the garden market, and hasbeen integrated with Hofman, our Belgian natural stone trader. Vibrobeton playsan important part in the niche sector in the non-residential structural concretemarket and gives us a leading position in the Belgian stair market. Incrementalsales from these two acquisitions amount to euro 7 million. In April, the group acquired Supreme Concrete, the market leader in concretefencing and lintels in the UK . With annual sales of euro 40 million, Supremehas six manufacturing sites producing concrete fencing and other relatedproducts, prestressed lintels and T-beams. The acquisition extends the existingactivities of Forticrete, which has traditionally focused on concrete masonryproducts and rooftiles. Clay Products In June, the Clay Products group acquired Nuth, a manufacturer of soft mudfacing brick in the Netherlands with annual sales of euro 4 million. Thisacquisition offers the opportunity to expand CRH Kleiwaren's product range inthe upper-medium price segment in the Dutch brick market. Europe Distribution: euro 20 million Three acquisitions during the period, in the Netherlands , Belgium andSwitzerland , added a total of six outlets and annual incremental sales of euro48 million to Europe Distribution's existing builders merchanting network. In January, the group acquired Kalkmortelcentrale, a Dutch builders merchantspecialising in plaster materials in Den Bosch. In February, the group acquiredGamma Schelle and Gamma Dendermonde, which expands our coverage to 20 DIY storesoperating in Belgium . The acquisition in February of BAW Baustoffe, BAB Baustoffe AG and BAF Baustoffe(together, Triple-B) allows a strong entry into the Basel region with theaddition of three builders merchants in the German-speaking part of Switzerland. Americas Materials: euro 169 million The Americas Materials Division completed twelve bolt-on acquisitions in thefirst half of 2006 at a combined cost of US$ 205 million (euro 169 million). Theannual incremental sales arising from these transactions amount to US$ 203million. New York/New Jersey In February, Americas Materials acquired the quarrying and recycling assets ofBedrock located in Kearney , New Jersey . With annual sales of US$ 17 million,Bedrock is a natural fit with our existing recycling business in the greater NewYork/New Jersey area. New England Bissonette Redimix, a premier readymixed concrete business based in Manchester ,New Hampshire with annual sales of US$ 38 million, was acquired in mid-January.The acquisition has been integrated with our existing aggregates businesses inthe northeastern United States and strengthens our presence in the ready-mixedconcrete sector in the region. Central Pioneer Concrete, a readymixed concrete producer based in Wilmington , Delawarewith annual sales of US$ 29 million, was acquired in February. This acquisitionwas followed by three transactions in Ohio , which added combined sales of US$51 million. In mid-February, the acquisition of the readymixed concrete assetsof the Stansley Group doubled the size of the Group's concrete operations inToledo . Our Central region had already acquired the trucking assets of theStansley Group in November 2005. In April, we acquired Miller Companies, anasphalt producer and paving/construction contractor based in Columbus, andApache Asphalt and Paving, a sand and gravel, readymixed concrete, asphalt andconstruction company near Coshocton. West During the first half of 2006, the Americas Materials Division completed sixbolt-on acquisitions in its West region which strengthen and complement itsexisting activities and provide incremental annual sales of US$ 68 million tothis regional group. Central Concrete, the leading readymixed concrete supplier in Mankato ,Minnesota was acquired in February. This acquisition, combined with theacquisition of certain aggregate assets of Owatonna Construction, also inFebruary, and the purchase of Emmetsburg Readymix in January serves as aplatform to expand our operations in the region. In June, Goose Bay , anexcavation and utilities placement services company based in Kalispell , Montana, was acquired and will be integrated with our existing Rocky Mountain business.Also in June we acquired the assets of J.C. Compton, the leading aggregates,readymixed concrete and asphalt supplier in Salem , Oregon , along with theassets of Boehler Construction an aggregate and asphalt supplier located in Elko, Nevada . Americas Products: euro 53 million Five acquisitions were completed in the first half of 2006 at a combined cost ofUS$ 57 million (euro 46 million) yielding annual incremental sales of US$ 43million. In addition, work commenced on a major capital investment project whichis expected to cost US$ 9 million (euro 7 million). Precast Group The acquisition of Foothills Concrete Pipe and Products was completed inJanuary. Foothills, a manufacturer of concrete pipe and precast in Denver , hasannual sales of US$ 4 million from one location in Platteville , Colorado .Foothills, which sells to underground utility and civil contractors, primarilyfor infrastructure projects, is an excellent fit with the Precast Group'sexisting Denver area business. Hartford Concrete Products, a manufacturer of utility vaults andtelecommunications buildings in Indiana , was acquired in early June. Withannual sales of US$ 11 million and an excellent reputation in the market forquality and service, Hartford provides the Precast Group with access to severalattractive Midwestern markets. Architectural Products Group (APG) In January, APG acquired ownership of the Sakrete(R) trademark, securing therights for use of this nationally-recognised trademark in the United States ,Canada , Mexico and the Caribbean in addition to the exclusive rights to theSakrete sales territory in Ohio , Indiana , Kentucky and Illinois . APG alreadyhas the exclusive rights to sales territories in a number of other regionsacross the United States . The trademark, which enjoys a strong reputation forquality, covers packaged cement and asphalt-based products, particularly drycement mixes, specialty concrete masonry and tile-setting products. APG also started construction work during the period on a US$ 9 million blockplant in Atlanta , Georgia , aimed at further increasing production capacity toservice strong customer demand in the Atlanta market. Glass Group In January, the Glass Group acquired Texas Wall Systems, a leading provider ofhigh-performance curtain wall systems and engineering services. Texas WallSystems, which has annual sales of US$ 15 million, significantly broadens theGlass Group's product offering and provides a strong manufacturing base forcustom, high-performance curtain wall systems in the United States . U.S. Global Glass, a leading provider of laminated and tempered glass productsin the southern Florida regional construction market was acquired in June. Withannual sales of US$ 13 million, this acquisition increases the Glass Group'slaminated glass and tempering capacity in southern Florida and provides a strongmanufacturing base for the Group's important hurricane-resistant product,StormGlassTM. Americas Distribution: euro 40 million Two acquisitions were completed by the Americas Distribution group (AlliedBuilding Products) in the first half of 2006 at a combined cost of US$ 50million (euro 40 million) yielding annual incremental sales of US$ 139 million. The acquisition of Osprey Building Materials, a six-branch interior productsdistributor in southeast and southwest Florida , was completed by Allied in lateApril. The addition of Osprey builds on Allied's existing presence in theFlorida interior products market following the acquisition of Atlantic BuildingMaterials in late December 2005. In June, Allied acquired Interior Distributors, Inc. (IDI), a seven-branchinterior products distributor in the Carolinas and Virginia . IDI extendsAllied's interior products business into the Carolinas and complements thegroup's existing interior products branches in Washington D.C. and Maryland . * * * * * 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 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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