Global materials group CRH plc has announced that it has reached an agreement to divest of its European Distribution business to private equity funds managed by Blackstone for an Enterprise Value of €1.64 billion payable in cash. The transaction is subject to regulatory approval.
The business comprises CRH’s entire General Builders Merchants business in Europe, including its Sanitary Heating and Plumbing business. It supplies building materials to professional builders, specialist contractors, and DIY customers through a network of local and regional brands across six countries in Western Europe. In 2018, the business generated proforma EBITDA of €155 million on proforma sales of €3.7 billion; profit before tax for the year amounted to €124 million and gross assets at year-end amounted to €1.9 billion.
This divestment follows a comprehensive strategic review of the business over the last several months, which considered all options to maximise value for shareholders. It concludes the exit from the company’s distribution businesses across the Group, creating a simpler and more focused business.
The Group’s strategy of actively managing its portfolio for higher growth, more sustainable returns, and efficiently allocating capital to maximise shareholder value has resulted in its decision to divest of the business at an attractive valuation. The proceeds from the divestment will be used for general corporate purposes, value creating acquisitions, and capital returns to shareholders through the company’s ongoing share buyback programme.
“The announced transaction demonstrates the continued execution of CRH’s strategy of creating value for our shareholders through active portfolio management, the efficient allocation of capital, and creating a simpler and more focused Group going forward,” said Albert Manifold, Chief Executive of CRH. “We wish our colleagues in Europe Distribution every success as they enter this new phase of their development.”
Read the article online at: https://www.worldcement.com/europe-cis/22072019/crh-to-divest-european-distribution-business/