CRH stumps up $46.6m for US concrete manhole maker

Acquisition of Concrete Specialities sees building giant continuing to strike bolt-on deals

Albert Manifold, CEO of CRH plc: Last week, the Dublin-based company launched the second phase of a share buyback programme. Photograph: Nick Bradshaw

Albert Manifold, CEO of CRH plc: Last week, the Dublin-based company launched the second phase of a share buyback programme. Photograph: Nick Bradshaw

 

Building materials giant CRH has spent $46.6 million (€40.1 million) on the purchase of an Illinois-based maker of concrete manholes and pipes as it continues to strike bolt-on deals even as it takes a breather from major acquisitions.

The Dublin-based group’s acquisition of Concrete Specialities, a leading producer of precast concrete products in the Chicago metropolitan area, southern Wisconsin and northern Indiana, was revealed in a recently filed financial report for its US subsidiary, which is the biggest materials group in North America.

A spokeswoman for CRH confirmed that the deal was in addition to the €150 million of acquisitions spend that the group revealed in its interim report, published on August 23rd, that it had carried out since the end of June.

CRH committed to about €5 billion of asset purchases in 2017, making it the second-biggest deal-making year in the group’s history, following on from the €8 billion it spent in 2015. However, the group, led by chief executive Albert Manifold, has returned to its bread-and-butter business of securing smaller bolt-on deals in 2018, as it focuses on digesting some of the big transactions it was involved in last year.

Biggest deal

The biggest deal agreed in 2017 was the $3.5 billion takeover of the US’s fifth-largest cement company, Kansas-headquartered Ash Grove, which was only completed in June.

CRH said in its interim report that it spent €265 million in the first half on 15 bolt-on purchases and one investment throughout the US and Canada, while it forked out €80 million on four acquisitions and one investment in Europe during the same period.

The group reported earnings before interest, tax, depreciation and amortisation (ebitda) in the first six months of the year of €1.13 billion, up 1 per cent on the comparative period in 2017. It has forecast “another year of progress for the group” for the full year, as momentum in Europe and north America continues, despite continuing currency headwinds and challenging conditions in the Philippines market.

Share buyback

Last week, CRH launched the second phase of a share buyback programme, authorising Swiss brokerage UBS to repurchase up to €350 million of its stock by the middle of November. The company had already a similar amount between late April and the end of June, repurchasing its own stock in the belief that it is trading below its real value.

Mr Manifold said on April 25th that the group plans to spend up to €1 billion buying back its own shares over 12 months in the first such programme.

Shares in Ireland’s largest publicly quoted company have declined by 4.5 per cent so far this year, slightly underperforming Dublin’s Iseq index, which has dipped by almost 3.8 per cent.