Building materials company CRH has announced it is selling its US-based glass business, Building Envelope, to KPS Capital Partners in a deal worth $3.8bn (€3.4bn).
The Irish-listed materials supplier will divest from Building Envelope for a cash consideration of $3.5bn (€3.1bn) and transfer liabilities of $350m (€313m) to KPS if the transaction is approved by regulators.
Building Envelope provides architectural glass, storefront systems, architectural glazing systems and related to hardware to its primarily North America-based customer base.
The business generated earnings of $337m (€301m) and profit before tax of $210m (€188m) in 2020, and its gross assets amounted to $2.5bn (€2.2bn) last June.
"The decision to divest at an attractive valuation follows a comprehensive review of the business and demonstrates CRH’s active approach to portfolio management, the efficient allocation of capital and the creation of a simpler and more focused group," CRH said in a statement.
In Association with
"The proceeds from the divestment will be incorporated into the group’s capital allocation resources, focused on value-enhancing capital expenditure, value-accretive acquisitions and cash returns to shareholders."
In a November trading update, CRH said it made sales of $22.8bn (€20.4bn) in the nine months to the end of September, an increase of 11% year-on-year, with earnings rising 15% to $3.9bn (€3.5bn) due to good underlying demand and prices increases across key markets, and its earnings margin rising 50bps to 17.1%.
The company said that it expects demand and pricing to continue to rise in 2022 against the backdrop of wider inflation internationally and US President Joe Biden's $1.2tn's infrastructure package.
Albert Manifold, CEO of CRH, said the company expects to deliver earnings in excess of $5.25bn for the full 2021 financial year, with earnings for the first nine months of the year at Building Envelope ahead of the same period in 2020 due to "good pricing discipline and cost mitigation efforts offset significant input cost inflation."
Photo: CRH CEO Albert Manifold at the CRH's AGM in 2018. (Pic: Rolling News)
