CRH offloads clay brickwork business for €521mn

Bain to acquire the assets as new CRH CEO demonstrates ‘impressive’ strategy

CRH has sold off its clay brickwork business which consists of Ibstock in the UK and Glen Gery in the US, as well as UK concrete products companies Forticrete and Supreme Concrete, for about €521m. (Photograph: Brenda Fitzsimons/The Irish Times)

CRH has sold off its clay brickwork business which consists of Ibstock in the UK and Glen Gery in the US, as well as UK concrete products companies Forticrete and Supreme Concrete, for about €521m. (Photograph: Brenda Fitzsimons/The Irish Times)

 

Irish construction giant CRH is to dispose of its UK and US clay brickwork business to US buyout firm Bain Capital for £414 milion (€521mn) .

The deal excludes real estate assets with an estimated market value of £30 million that are being retained by CRH “for future disposal”.

In a note this morning broker Davy noted that the deal marks “an impressive and welcome delivery of strategy” from CRH’s chief executive, Albert Manifold, who is in the job just one year. CRH has sold off some €900m in assets in recent months, out of an expected € 1.5-2m in total disposals.

Boston based Bain Capital has about $80 billion in assets under management and it’s understood that it has been looking at acquiring cement assets.

CRH’s clay brickwork business consists of Ibstock in the UK and Glen Gery in the US, as well as UK concrete products companies Forticrete and Supreme Concrete. As part of the transaction Bain will assume certain debt and pension liabilities relating to the business and accordingly, the net cash consideration payable to CRH is expected to be approximately £295 million.

According to CRH, the clay brickwork business generated profit before tax of £16 million, with gross assets of £300 million.

Subject to regulatory approvals, the transaction is expected to close in the first half of 2015.