2nd Jul 2007 07:01
CRH PLC02 July 2007 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 2 July 2007 CRH ANNOUNCES ADDITIONAL FIRST HALF 2007 ACQUISITION INITIATIVES OF EURO 395 MILLION BRINGING FIRST HALF SPEND TO ALMOST EURO 1 BILLION CRH plc, the international building materials group, today announces 31acquisition initiatives totalling euro 395 million undertaken during the firsthalf of 2007. These initiatives are in addition to the four transactions already separatelyannounced during the period: the acquisition of Swiss builders merchant GetazRomang announced in April and completed in late May; the acquisition of a 50%stake in Denizli Cement in Turkey and the buyout of the remaining 50% of PaverSystems in the US which were announced in April; and the purchase of HarbinSanling Cement Company in China which was announced in February. Thetransactions announced today bring total spend on acquisitions and investmentsin the first half of 2007 to almost euro 1 billion. Commenting on these developments, Liam O'Mahony, CRH Chief Executive, said: "Following the record net spend of euro 2.1 billion reported in 2006, the strongdevelopment momentum has carried into 2007 with a total of 35 transactionscompleted in the first six months of the year. We are particularly delightedthat this period has also seen the first steps by CRH into China and Turkey ,both of which represent good platforms for further growth and development forthe Group." The initiatives contained in this Development Strategy Update are as follows: • Europe Materials - 6 acquisitions for euro 50 million Two bolt-on transactions were completed in Poland , and Secil, in which CRH hasa 49% joint venture interest, completed one acquisition and three buyouts inPortugal and Lebanon. • Europe Products - 9 acquisitions for euro 68 million The Concrete Products group acquired three businesses in France , Denmark andthe UK , and also bought out the majority shareholding in a joint venture inPoland . The Building Products group continued the expansion of its ConstructionAccessories platform adding companies in Italy , Norway and France , andstrengthened its Fencing & Security business with acquisitions in Sweden andFrance. • Europe Distribution - 4 acquisitions for euro 73 million The Distribution group added a total of 21 builders merchants outlets to itsexisting branch network with acquisitions in France and the Netherlands , andcompleted its first acquisition in Spain adding 9 DIY stores. In addition, theGroup's Bauking joint venture completed an acquisition which added 16 buildersmerchants and 13 DIY stores in Germany. • Americas Materials - 4 acquisitions for euro 24 million Four bolt-on acquisitions were completed by Americas Materials in its Centraland West divisions. • Americas Products - 6 transactions for euro 175 million The Glass Group took a further major step in its development strategy with theacquisition of Vistawall, a leading US manufacturer of architectural aluminiumglazing systems headquartered in Texas . The Architectural Products Groupcompleted two acquisitions in Florida , one in Illinois and one in theNortheast, and also bought out the minority interest in a business in Georgia. • Americas Distribution - 2 acquisitions for euro 5 million Two roofing and siding acquisitions were completed in California , adding twonew locations to the 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 50 million The Europe Materials Division completed six transactions at a total cost of euro50 million during the first half of 2007. Incremental annual sales arising fromthese transactions amount to euro 62 million. Poland The Polish ready-mixed concrete operations of the Schwenk group were acquired inJune. Schwenk is a major readymixed concrete producer which operates through anetwork of 15 plants strategically located across Poland with goodinfrastructural access and proximity to high-quality aggregates reserves. Theacquisition adds annualised sales of euro 19 million and strengthens CRH'sexisting leadership position in the national ready-mixed concrete market inPoland . Also in June, CRH's subsidiary OKSM acquired Gniewkow, a major supplier ofgranite in Poland . With annual sales of approximately euro 2 million, Gniewkowhas proven and permitted reserves of 18 million tonnes near Wroclaw in thesouthwest of the country. Portugal CRH's joint venture Secil, in which the Group has a 49% stake, completed fourtransactions in Portugal and Lebanon during the first half of 2007. In January, Secil increased its interest in Secil Martinganca, the market leaderin Portugal in dry mortar, by 45.8% to a total shareholding of 97%. Also inJanuary, Secil acquired an additional 21.9% of Ciment de Sibline, in Lebanon ,bringing Secil's stake in this entity to 50.5%. Ciment de Sibline operates anintegrated clinker/cement plant approximately 35 kilometres south of Beirut .Sibline has an annual production capacity of 1 million tonnes of clinker, andthe company also has a readymixed concrete business which produces 120,000 cubicmetres annually. In June, Secil acquired Minerbetao, a readymixed concreteproducer located in the central region of Portugal , producing annual volumes of45,000 cubic metres. Also in June, Secil increased to 57.1% its interest inCimentos Madeira, a cement bagging and distribution company with sales of295,000 tonnes. CRH's share of the combined incremental sales from these fourtransactions amounts to euro 41 million. Europe Products: euro 68 million Europe Products completed nine acquisitions at a total cost of euro 68 millionin the first half of the year. The annual incremental sales arising from thesetransactions amount to euro 96 million. Concrete Products Four transactions were completed by the Concrete Products group in the period,three in its Structural activities and one in Architectural. In January, the Concrete Products group acquired Cinor, a French manufacturer ofload-bearing walls and of reinforced and prestressed concrete beams and columnswith annual sales of euro 13 million. Cinor operates a production facility nearStrasbourg , close to the French/German border, and is a good strategic fit withthe group's existing structural products businesses in France and the Benelux . In March, structural products activities were further strengthened with theacquisition of Dalton , the Danish market leader in concrete stairs andbalconies. With annual sales of approximately euro 30 million, Daltoncomplements CRH's existing Betonelement business in Denmark , extending theproduct range and providing opportunities for operating synergies. In April, CRH exercised its option to acquire the remaining 75% of former jointventure Ergon Poland in which a 25% stake had been acquired when CRH purchasedthe Ergon Group in Belgium in June 2004. The buyout of this business, whichhas annual sales of approximately euro 16 million, facilitates the integrationof CRH's structural concrete operations in Poland . Also in April, the architectural products business acquired Anderton ConcreteProducts, a regional market leader in precast concrete fencing products in thenorthwest of England , and a leading UK supplier of specialist small elementconcrete troughs for the utilities sector. Anderton is an excellent geographicfit with Supreme Concrete, acquired in April 2006, adding annual sales of euro15 million. Building Products Further progress in developing the Construction Accessories platform in Europewas achieved during the first six months of 2007 with the completion of threeacquisitions adding annual sales of euro 15 million. Plastybeton, a leading Italian manufacturer and distributor of plastic spacersand formwork accessories with one location near Venice , was acquired in March.In May, CRH acquired Halfen-Frimeda, a Norwegian metal-based constructionaccessories distributor. These two transactions were followed in June by thepurchase of Sodeco, a French manufacturer and distributor of magneticaccessories products for the construction industry based at Clermont-Ferrandnear Lyon. All three acquired businesses have important market positions andrepresent excellent geographic and product add-ons for the ConstructionAccessories group's growing network throughout Europe . The Fencing & Security business was strengthened with the acquisition ofbusinesses in Sweden and France which have combined annual sales of euro 11million. In March, the group entered the attractive Scandinavian market with theacquisition of Tuvan Stangsel, a leading Swedish distributor of fencing,gates, outdoor security and access control systems. OREP, a specialist providerof perimeter fence detection systems in France , was acquired in early May. Europe Distribution: euro 73 million Europe Distribution completed four transactions during the first half of 2007 inFrance, the Netherlands, Spain and Germany adding a total of 37 buildersmerchants branches and 22 DIY outlets to its existing network with annualincremental sales of euro 143 million. In January, the Distribution group acquired LDP, a French builders merchantoperating 17 branches in the Normandy region. LDP has annual sales of euro 43million, and provides a new base for expansion in Normandy , which is directlyadjacent to Ile-de-France where CRH has a significant existing network ofbuilders merchants. The Vlutters group in the Netherlands was acquired in March, adding fourlocations which focus on the distribution of flat roofing materials. Vlutters,with annual sales of approximately euro 16 million, represents a good geographicfit with CRH's existing network of 15 specialist roofing branches. In June, the Distribution group made its first entry into Spain with theacquisition of a 60% interest in Jelf Brico-House, which operates 9 DIY storesin the Alicante-Valencia coastal region of southeast Spain . Jelf's businessstrategy is similar to that of Max-Mat in Portugal , in which CRH has a 50%joint venture stake, and we believe this acquisition will form a platform forfurther growth, both by greenfielding and acquisition, in the large, but stillfragmented, Spanish DIY market. Annual sales of Jelf amount to euro 10 million. In February, Bauking, the German builders merchant and DIY operator in which CRHacquired a 47.8% joint venture interest in December 2005, acquired MobauModernes Bauer. Mobau is the leading regional player in the southern part ofNorth-Rhine-Westphalia, operating 16 general merchants and 13 DIY stores. Thisacquisition, which has annual sales of euro 155 million (100%), is very muchin keeping with the CRH/Bauking strategy of adding small to mid-sized regionalbusinesses in areas adjacent to Bauking's existing locations. The enlargedBauking business now comprises a network of 79 builders merchants and 53 DIYoutlets. Americas Materials: euro 24 million The Americas Materials Division completed four acquisitions in the first half of2007 at a combined cost of US$ 32 million (euro 24 million). The annualincremental sales arising from these transactions amount to US$ 46 million. In April, the Shelly group concluded the acquisition of the asphalt assets ofKenmore Construction Company, a privately-owned business based in Cleveland ,Ohio . Kenmore produces 1 million tons of asphalt annually most of which issold externally. The acquisition, which adds incremental sales of approximatelyUS$ 33 million, strengthens Shelly's existing integrated aggregates and asphaltpresence in the northeast Ohio market and expands its third-party materialssupply business. Three smaller bolt-on acquisitions were also completed during the period addingincremental sales of US$ 7 million. The Industrial Materials group within theCentral region acquired Rock It Stone in January. The company operates acrushing facility adjacent to an existing CRH high calcium quarry in Virginia .The additional crushing capacity provided by Rock It Stone will allow theIndustrial Minerals group to pursue larger volume contracts in the region. InApril, the Rocky Mountain group which is part of the West region acquired theassets of Big Sky Asphalt in Sheridan , Wyoming , enhancing its existingoperations in the region. Also in the West, Staker Parson acquired threereadymixed concrete plants in southern Utah with the purchase of selected assetsof Kaneco Products. Americas Products: euro 175 million Five acquisitions and a buyout transaction were completed in the first half of2007 at a combined cost of US$ 250 million (euro 175 million) yielding annualincremental sales of US$ 371 million. Architectural Products Group (APG) In January, APG acquired the assets of Valley Block, a manufacturer of concretemasonry block and manholes located northwest of Chicago . Valley has beenintegrated into APG's existing Northfield business. APG acquired two masonry distribution businesses in Florida . ColorocMaterials, based in Tampa , was acquired in February and Harwood Brick based inGainesville , was acquired in June. These two acquisitions provide furtheraccess to the independent masonry contractor customer segment and are acomplementary fit with APG's existing operations in Florida . In May, APG acquired Pre-Blend Products, a dry specialty cement and concreterepair products manufacturing company based near Trenton , New Jersey .Pre-Blend, which has been integrated into APG's Bonsal American operations,provides specialty blending capacity in the Northeast US . The combined incremental sales from these four bolt-on acquisitions amount toUS$ 48 million. In June, APG acquired the remaining 20% interest in Custom Surfaces, afabricator and installer of marble, granite and solid surface countertops inGeorgia and South Carolina in which an initial 80% stake was acquired in March2004. Glass Group At the end of June, the Glass Group acquired the Vistawall Group for a totalconsideration of US$ 190 million. With annual sales of US$ 323 million,Vistawall is a leading vertically-integrated manufacturer of a broad range ofarchitectural aluminium glazing systems, including storefront systems, curtainwall, glass skylights, translucent roof and wall systems and operable windows.The acquisition provides scale and critical mass for Glass Group's growthstrategy to assemble a unique product and service bundle of architectural glassand architectural aluminium glazing systems. Vistawall's main manufacturingfacility and headquarters are in Terrell , Texas . In addition, the group hassix regional facilities located in Greeneville (Tennessee), Newnan (Georgia),Warwick (Rhode Island), Modesto (California), Wausau (Wisconsin), andBloomsburg (Pennsylvania) together with a total of 19 service centres throughoutthe United States, which give Vistawall a national footprint with sales in all50 states. Americas Distribution: euro 5 million The Americas Distribution group (Allied Building Products) completed twoacquisitions in California in April adding annual incremental sales of US$ 22million. Spartan Supply is based in west Los Angeles and focuses on thedistribution of roofing products. The John Ray Company is a roofing/drywalldistributor serving the Stockton market in northern California . Both businessesare primarily focussed on the residential re-roof market. The combined cost ofthe acquisitions, both of which are single-branch businesses serving the roofingand siding sector, was US$ 6 million (euro 5 million). * * * * * 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:
CRH