8-K

CRH PUBLIC LTD CO 8-K Report (Aug 24, 2017)

Filed August 24, 2017For Securities:CRH

Summary

CRH Public Limited Company (CRH) announced a significant portfolio realignment on August 24, 2017, through two key transactions. The company has agreed to sell its Americas Distribution business to Beacon Roofing Supply, Inc. for $2.63 billion in cash. This divestment is strategic, stemming from a lack of value-accretive acquisition opportunities and limited visibility for market leadership within that specific segment, despite its historical growth and recent performance improvements. The proceeds from this sale will be reinvested to pursue value-creating acquisitions and investments as part of CRH's ongoing strategy. Concurrently, CRH is strengthening its European presence by acquiring Fels, a leading German lime and aggregates business, for €0.6 billion (Enterprise Value). This acquisition is expected to significantly enhance CRH's position in the European lime market, establishing it as a number two player with a platform for further growth. These transactions underscore CRH's commitment to active portfolio management, capital reallocation, and pursuing growth opportunities in attractive markets while maintaining financial discipline.

Key Highlights

  • 1CRH is divesting its Americas Distribution business for $2.63 billion in cash to Beacon Roofing Supply, Inc.
  • 2The divestment of Americas Distribution is part of CRH's strategy to reallocate capital to value-creating acquisitions and investments.
  • 3CRH is acquiring Fels, a leading German lime and aggregates business, for €0.6 billion (Enterprise Value).
  • 4The Fels acquisition is expected to establish CRH as the number two player in the European lime market.
  • 5These transactions are consistent with CRH's strategy of growth and value creation through effective portfolio management.
  • 6The company reported €150 million EBITDA for Americas Distribution in 2016 on sales of €2.3 billion.
  • 7Fels reported €70 million EBITDA in 2016 on sales of €260 million.

Frequently Asked Questions

CRH is divesting its Americas Distribution business due to a lack of value-accretive acquisition opportunities and limited visibility for achieving market leadership within that segment. The sale allows CRH to reallocate capital to more attractive growth areas and strategic investments.

The proceeds from the $2.63 billion divestment of the Americas Distribution business will be reallocated towards value-creating acquisitions and investments, aligning with CRH's strategy of effective portfolio management and capital discipline.

Fels is a leading German lime and aggregates business with operations in Germany, the Czech Republic, and Russia. CRH is acquiring Fels to significantly strengthen its position in the European lime market, aiming to become the number two player and create a platform for further growth in this attractive sector.

The divestment of Americas Distribution is valued at $2.63 billion, and the acquisition of Fels is valued at €0.6 billion (EV). In 2016, Americas Distribution generated €150 million in EBITDA on €2.3 billion in sales, while Fels generated €70 million in EBITDA on €260 million in sales. These transactions are part of CRH's broader strategy to optimize its portfolio and capital allocation.