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CRH Divests Europe Distribution Business

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CRH Divests Europe Distribution Business

CRH Divests Europe Distribution Business
July 19
09:49 2019

CRH plc, the global building materials group, has agreed to divest of its Europe Distribution business to private equity funds managed by Blackstone for an Enterprise Value of €1.64 billion* payable in cash. The transaction is subject to regulatory approval.

The business being sold comprises CRH’s entire General Builders Merchants business in Europe, including its Sanitary Heating and Plumbing business. It supplies building materials to professional builders, specialist contractors and DIY customers through a network of local and regional brands across 6 countries in Western Europe. In 2018 the Business generated proforma EBITDA of €155 million on proforma sales of €3.7 billion; profit before tax for the year amounted to €124 million and gross assets at year-end amounted to €1.9 billion.

This divestment follows a comprehensive strategic review of the business over the last several months which considered all options to maximise value for shareholders. It concludes the exit from CRH’s distribution businesses across the group, creating a simpler and more focused operation.

The group’s strategy of actively managing its portfolio for higher growth, more sustainable returns and efficiently allocating capital to maximise shareholder value has resulted in its decision to divest of the Europe Distribution business at an attractive valuation. The proceeds from the divestment will be used for general corporate purposes, value creating acquisitions and capital returns to shareholders through our ongoing share buyback programme.

Commenting on this development, Albert Manifold, CRH Chief Executive, said: “The transaction demonstrates the continued execution of CRH’s strategy of creating value for our shareholders through active portfolio management, the efficient allocation of capital and creating a simpler and more focused group going forward. We wish our colleagues in Europe Distribution every success as they enter this new phase of their development.”

* The Enterprise Value excludes a further €50 million of additional consideration which is contingent on the satisfaction of certain other contractual clauses.

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