8-K

CRH PUBLIC LTD CO 8-K Report (Dec 18, 2023)

Filed December 18, 2023For Securities:CRH

Summary

CRH Public Limited Company (CRH) has announced a significant strategic move through a non-binding proposal to acquire Adbri Ltd, a leading Australian building materials business. This proposed acquisition is being undertaken in partnership with Barro Group, an existing significant shareholder in Adbri. The offer, valued at A$3.20 per share in cash, represents an equity valuation of A$2.1 billion (US$1.4 billion) for Adbri, and is based on an enterprise value multiple of approximately 9x Adbri's expected 2023 underlying EBITDA. This potential acquisition aligns with CRH's stated long-term interest in the Australian construction materials market, which it views as having attractive, stable market dynamics and positive growth prospects, akin to its successful operations in the Southern United States and Central/Eastern Europe. Adbri's high-quality assets, with leading market positions in cement, concrete, and aggregates, are seen as complementary to CRH's existing capabilities. The transaction is subject to customary conditions including due diligence, definitive agreements, shareholder approval, and regulatory clearances, with Adbri's Independent Board Committee having agreed to provide exclusive due diligence access and intending to recommend the proposal.

Key Highlights

  • 1CRH, in partnership with Barro Group, has submitted a non-binding proposal to acquire 100% of Adbri Ltd for A$3.20 per share in cash.
  • 2The total equity valuation for Adbri is approximately A$2.1 billion (US$1.4 billion), with the target acquisition of shares not owned by Barro valued at A$1.1 billion (US$0.75 billion).
  • 3The offer represents an enterprise value to expected 2023 underlying EBITDA multiple of approximately 9x, based on Adbri's projected EBITDA range of A$310-A$315 million.
  • 4Adbri's Independent Board Committee (IBC) has agreed to grant CRH exclusive due diligence and intends to recommend the proposal to Adbri shareholders, subject to a binding scheme implementation deed.
  • 5The acquisition is intended to expand CRH's presence in the Australian construction materials market, leveraging Adbri's strong market positions and complementary assets.
  • 6The transaction is contingent on satisfactory due diligence, entry into binding agreements, Adbri shareholder approval via a scheme of arrangement, and regulatory approvals.
  • 7Following the acquisition, CRH intends to delist Adbri from the Australian Securities Exchange (ASX).

Frequently Asked Questions

This 8-K filing announces CRH Public Limited Company's (CRH) non-binding proposal to acquire Adbri Ltd, a leading building materials business in Australia. It details the terms of the offer, the strategic rationale behind the potential acquisition, and the conditions that must be met for the transaction to proceed.

CRH, alongside its partner Barro Group, is proposing to acquire 100% of the ordinary shares of Adbri Ltd for a cash price of A$3.20 per share. This values Adbri at an equity valuation of approximately A$2.1 billion (US$1.4 billion).

CRH views this acquisition as a strategic expansion into the Australian construction materials market, which it finds attractive due to stable dynamics and growth prospects. Adbri's assets are considered complementary to CRH's existing capabilities, particularly in cement, concrete, and aggregates, and will strengthen CRH's presence in Australia where it has operated for 15 years.

The proposed transaction is non-binding and subject to several conditions, including the satisfactory completion of due diligence, entry into binding transaction documentation, approval by Adbri shareholders through a scheme of arrangement, and obtaining necessary regulatory approvals. Adbri's Independent Board Committee has agreed to recommend the proposal subject to these conditions.