CRH buys rooflights subsidiary for €77m

CRH has agreed to acquire the rooflight interests of Yule Catto & Company plc, a British manufacturer of speciality chemicals and building products, for a cash consideration, including debt, of €77 million (£60.6 million). The transaction, subject to regulatory approvals, is expected to be completed by the end of April.

It will be earnings enhancing. In a full year, it should add more than 0.5 cents to earnings per share, said CRH's general manager finance, Mr Myles Lee.

Yule Catto Rooflights, which produces items such as dome lights and glass roofing, has strong market positions in Germany, the Netherlands, the UK and Ireland. It will fit in well with CRH's daylight and ventilation division, which has operations in Germany, the Netherlands and Belgium. The integration, said Mr Brian Hill, group managing director, CRH Europe Products and Distribution, will give "an excellent geographic spread across most of northern Europe's biggest markets and will result in significant synergies".

The sector's growth is driven by the trend towards natural light and ventilation in buildings and by increasingly stringent fire and safety regulations across Europe, according to CRH. The enlarged division will have annualised sales approaching €150 million and 1,000 employees.

Yule Catto Rooflights generated profits before interest, depreciation and amortisation of €10.6 million, on sales of €63 million in 1999. Trading profit after depreciation amounted to €8.7 million. The company employs 540 people.

The business is being purchased at a considerable premium to net assets and this is reflected by the goodwill of €57 million on the acquisition. CRH has been active on the takeover front this year. In February, it announced the takeover of Shelly Company, an Ohio-based aggregates group, for $362 million. It is also one of the two firms shortlisted to purchase up to 80 per cent of Poland's main lime producer, Trzuskawica, which has 1,300 employees and a 30 per cent share of the market.

The sale of its rooflights business increases Yule Catto's focus on speciality chemicals, such as ink and drug ingredients, and will cut its building product sales by a third. In November, the company purchased the 50 per cent it didn't already own in Synthomer Ltd and Synthomer GmbH from joint venture partner Reichhold Inc, for $95 million in cash. This boosted its polymer chemicals business.