CRH shares advance on reports it has bought US business

SHARES IN building materials giant CRH were in demand yesterday on the back of unconfirmed reports it has bought a US business with sales of $200 million a year.

Reports yesterday said that CRH’s biggest US subsidiary, Oldcastle Materials, has bought the assets of the Wheeler companies based in San Antonio, Texas.

Wheeler has sales estimated to be $200 million a year, and employs 500 people. It specialises in asphalt, paving, concrete and other products.

The news helped boost CRH’s share prices yesterday. At one point its units were selling at 73 cent higher than their €18.934 opening quote in Dublin. It closed the day almost 3 per cent up at €19.492.

Around half CRH’s €20 billion revenues come from the US, where house market data showed signs of an upturn yesterday.

However, stock market traders in Dublin said the San Antonio deal was the real driver of investor interest in the Irish company yesterday as it would be the first acquisition on this scale that the company has made this year.

In March, it raised €1.24 billion from shareholders, some of which it intends to use to buy smaller rival businesses that are for sale at attractive prices.

No one from the company was available to comment yesterday.

According to reports, Oldcastle has bought Wheeler’s four businesses which supply the San Antonio and Austin areas. The company’s founder, Jack Wheeler, will become part of Oldcastle’s management team.

Through Oldcastle, CRH is one of the biggest suppliers of asphalt in the US. The Irish group is poised to benefit from federal-funded highway building and other public projects which will be part of President Barack Obama’s economic stimulus plan.

CRH is Ireland’s biggest company and accounts for over one-third of the Iseq index of Irish shares on the Dublin Stock Market. Its 3 per cent rise yesterday translated into a 1 per cent rise in the value of the Iseq.

The company’s business is split roughly 50/50 between the US and Europe, although it does have some interests in Asia. Many of its businesses have struggled since the global downturn began, and its operations have been cutting costs and staff numbers over the last 18 months. It expects to make profits of around €760 million this year.