8-K

CRH PUBLIC LTD CO 8-K Report (Nov 1, 2005)

Filed November 1, 2005For Securities:CRH

Summary

CRH Public Limited Company (CRH) announced on November 1, 2005, a significant expansion of its US Materials operations through three strategic acquisitions. The total consideration for these transactions amounts to US$413 million, including assumed debt and deferred payments. These acquisitions are expected to bolster CRH's market position and provide new growth avenues within the US building materials sector. The company has acquired the vertically integrated "Mountain Companies," which includes aggregates, asphalt, paving, and construction assets, significantly expanding CRH's presence in the Appalachian regions of eastern Kentucky, southwest Virginia, and along the Kentucky/West Virginia border. Additionally, CRH acquired a 50% stake in Mountain's heavy construction affiliate, Bizzack, Inc. In Minnesota, CRH purchased the assets of Southern Minnesota Construction ("SMC"), a leading supplier of aggregates and asphalt in the south-central region, which offers a strong geographic synergy with CRH's existing Iowa operations.

Key Highlights

  • 1CRH plc announces three acquisitions to significantly expand its US Materials operations.
  • 2Total combined consideration for the acquisitions is US$413 million.
  • 3Acquisition of Mountain Companies strengthens CRH's presence in Kentucky, Virginia, and West Virginia, with substantial permitted aggregate reserves.
  • 4CRH acquired a 50% stake in Bizzack, Inc., Mountain's heavy construction affiliate.
  • 5Acquisition of Southern Minnesota Construction (SMC) expands CRH's reach into south-central Minnesota.
  • 6The acquired businesses generated combined sales of US$294 million and EBITDA of US$52 million in 2004.
  • 7Management expects substantial cost savings and strengthened market position from these integrations.

Frequently Asked Questions

The primary strategic rationale is to significantly expand CRH's US Materials operations, strengthening its market position and establishing new growth platforms in key regions. The acquisitions are expected to facilitate substantial cost savings through integration and leverage the acquired companies' strong market positions and reserves.

The total consideration for the three transactions is US$413 million. The acquired businesses had combined sales of US$294 million and EBITDA of US$52 million for the year ended December 31, 2004. While 2004 sales were lower than 2003 due to market conditions, a much-improved performance is expected for the current year (2005).

The acquisitions significantly expand CRH's presence in the Appalachian regions, specifically eastern Kentucky, southwest Virginia, and along the Kentucky/West Virginia state line through the Mountain Companies. Additionally, CRH expands into south-central Minnesota with the acquisition of SMC.

While the acquired businesses experienced a decline in sales in 2004 due to factors like reduced highway construction spending in Kentucky and adverse weather in Minnesota, CRH anticipates a recovery. The company expects a much-improved financial outturn for the current year (2005) and sees significant growth potential supported by factors such as increased federal highway funding under SAFETEA-LU for the Appalachian region.