Building materials giant CRH has acquired a North American provider of residential fencing and railing products for $1.9 billion (€1.8 billion). The company announced the purchase of Barrette Outdoor Living from Canadian private equity firms TorQuest Partners and Caisse de Dépôt et Placement du Québec on Friday.
The deal will be paid for with cash of $1.85 billion and about $40 million of capitalised lease liabilities.
CRH said the deal represents an acquisition multiple of 10 in terms of earnings before interest, taxes, depreciation and amortisation pre-synergies. The transaction will be financed through existing financial resources and, subject to regulatory approval, is expected to close in the second half of 2022.
Barrette reported profit before tax of $79 million and gross assets of $1.2 billion for the year ended January 1st, 2022.
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CRH chief executive Albert Manifold described Barrette as “an excellent addition” to the company.
“Our architectural products business has been one of our fastest growing businesses in recent years and the acquisition of Barrette complements and enhances our existing offering of sustainable outdoor living solutions in North America,” he said. “It also demonstrates the continued execution of our integrated solutions strategy to create further value for our customers, our business and our shareholders.
“We welcome the Barrette team to CRH and look forward to working with them on the next phase of our growth and development.”
The transaction follows the recent divestment of CRH’s building envelope business. The building materials giant said it “demonstrates the continued execution of the group’s strategy to create shareholder value through active portfolio management and the efficient allocation and reallocation of capital”.
The group said in April that it expected its sales and earnings margins to grow over the first half of 2022, despite significant energy cost volatility and the impact of the ongoing war in Ukraine. It also revealed in a trading update that its sales rose 15 per cent in the first half of this year, with each of its three divisions, Americas Materials, Europe Materials and Building Products, turning in strong performances.
