8-K

CRH PUBLIC LTD CO 8-K Report (Nov 12, 2010)

Filed November 12, 2010For Securities:CRH

Summary

CRH Public Ltd Co (CRH) announced on November 11, 2010, a significant divestment of selected Insulation businesses in Europe to Kingspan Group plc for a net cash consideration of €120 million. This strategic move aligns with CRH's earlier stated intention to exit the Insulation sector in Europe, particularly in segments where it does not foresee achieving market leadership. The transaction, expected to close in the first quarter of 2011, is subject to regulatory approvals and works council consultations in the Netherlands. This divestment is not expected to result in any gain or loss on disposal, as impairment charges related to these businesses were already factored into CRH's full-year profit guidance. In 2009, the divested businesses reported sales of €241 million and EBITDA of €19.8 million. For the current year, EBITDA is projected to be around €11 million. The sale excludes certain insulation businesses, including Unipol in the Netherlands and the Group's stake in Jackon Insulation.

Key Highlights

  • 1CRH is divesting selected European Insulation businesses to Kingspan Group plc for €120 million in net cash.
  • 2The divestment is a strategic decision to exit the Insulation sector in Europe where CRH does not see potential for market leadership.
  • 3The transaction is expected to close in the first quarter of 2011, subject to regulatory and consultation approvals.
  • 4No gain or loss on disposal is anticipated, as impairment charges were already recognized in prior guidance.
  • 5The divested businesses generated €241 million in sales and €19.8 million in EBITDA in 2009.
  • 6Current year EBITDA for the divested businesses is estimated at approximately €11 million.
  • 7Specific insulation businesses, including Unipol and a stake in Jackon Insulation, are excluded from the sale.

Frequently Asked Questions

CRH will receive €120 million in net cash. The company does not expect any gain or loss on disposal, as impairment charges related to these businesses were already accounted for in previous profit guidance. The divested businesses reported EBITDA of €19.8 million in 2009 and are expected to report around €11 million for the current year.

CRH is exiting this segment because it does not foresee the potential to achieve a market leadership position in Europe within the Insulation business. This is part of a broader strategic decision to focus on areas where CRH can establish a stronger competitive advantage.

The divestment includes selected Insulation businesses in Europe, referred to as 'CRH Insulation,' which are headquartered in the Netherlands and operate in the Benelux, Finland, Denmark, Sweden, Germany, UK, and Ireland. However, CRH's EPS granulates business Unipol in the Netherlands, its EPS business in Poland, and its 49% shareholding in Jackon Insulation in Germany are excluded from this sale.

The transaction is expected to close in the first quarter of 2011. This completion is contingent upon the successful conclusion of works council consultations in the Netherlands and the granting of necessary regulatory approvals.