8-K

CRH PUBLIC LTD CO 8-K Report (May 16, 2003)

Filed May 16, 2003For Securities:CRH

Summary

CRH Public Limited Company (CRH) has announced a significant strategic acquisition through its Oldcastle Materials Group, a division of its Materials Division in the Americas. The company acquired the stock of S.E. Johnson, a leading US Midwest-based aggregates and asphalt producer, for a total cash consideration of US$217 million, including assumed debt. The net cost, after anticipated asset sales, is US$177 million. This acquisition is expected to enhance CRH's vertical integration strategy in the Midwest, particularly strengthening its market position and reserve base in Ohio, Michigan, and Indiana. S.E. Johnson brings substantial assets, including 600 million tons of permitted reserves and significant aggregate and asphalt production capabilities, along with 1,300 employees. The integration with CRH's existing Shelly Group and Thompson-McCully operations is anticipated to yield considerable cost savings and synergies. This move underscores CRH's commitment to expanding its footprint in key North American markets and capitalizing on growth opportunities in the building materials sector.

Key Highlights

  • 1CRH's Oldcastle Materials Group acquired S.E. Johnson, a major US Midwest aggregates and asphalt producer.
  • 2The total cash consideration for the acquisition was US$217 million, with a net cost of US$177 million after asset sales.
  • 3S.E. Johnson possesses significant assets including 600 million tons of permitted reserves and substantial aggregate/asphalt production capacity.
  • 4The acquisition is expected to enhance CRH's vertical integration strategy and market position in Ohio, Michigan, and Indiana.
  • 5Integration with existing CRH operations (Shelly Group, Thompson-McCully) is projected to generate significant cost savings and synergies.
  • 6S.E. Johnson reported US$18 million in trading profit (EBIT) in 2002 on US$272 million in sales.

Frequently Asked Questions

The acquisition aligns with CRH's Materials Division's strategy to enhance vertical integration in the Midwest. S.E. Johnson's strong aggregates business, extensive reserves, and geographic fit with existing operations in Ohio and Michigan are key strategic benefits, strengthening CRH's market position and reserve portfolio in the region.

CRH acquired S.E. Johnson for a total cash consideration of US$217 million, which included assumed debt. After accounting for anticipated asset sales of US$40 million, the net cost of the transaction amounts to US$177 million.

The combination of S.E. Johnson with CRH's existing operations, specifically the Shelly Group in Ohio and Thompson-McCully in Michigan, is expected to facilitate significant cost savings. Management anticipates considerable scope for the speedy realization of value-adding synergies due to the complementary nature of the businesses and geographic proximity.

Founded in 1929 and headquartered in Toledo, Ohio, S.E. Johnson is a leading producer of aggregates and asphalt. The company also engages in paving, heavy highway, and bridge construction, operating primarily in northern Ohio, south-eastern Michigan, and north-eastern Indiana.