CRH said on Monday that it has agreed to sell its North American glass building products unit, Oldcastle Building Envelope, in a deal worth a higher-than-expected $3.8 billion (€3.4 billion) to private-equity firm KPS Capital Partners.
The Irish building materials giant said the consideration, payable on closing, includes cash of $3.45 billion together with a transfer of lease liabilities of $350 million. The deal is subject to regulatory approvals.
“The business comprises CRH’s entire Building Envelope business, which provides architectural glass, storefront systems, architectural glazing systems and related hardware to customers primarily in North America,” it said.
In 2020, the unit generated earnings before interest, tax, depreciation and amortisation (ebitda) of $337 million and profit before tax of $210 million. CRH will announce full year results for 2021 on Thursday.
“The decision to divest at an attractive valuation follows a comprehensive review of the business and demonstrates CRH’s active approach to portfolio management, the efficient allocation of capital and the creation of a simpler and more focused group,” CRH said, adding that proceeds would focused on “value-enhancing capital expenditure, value-accretive acquisitions and cash returns to shareholders”.
It first emerged in early December that CRH was looking to offload the unit for an estimated figure in excess of $3 billion.
“CRH has been an active manager of its portfolio over the last decade, and recent speculation means this deal does not come as a surprise,” said Goodbody Stockbrokers analyst David O’Brien.
“It again highlights the shareholder-friendly nature CRH takes to its portfolio of businesses.
“ With a greater focus on US infrastructure and a very strong financial position we believe the outlook for both organic and inorganic growth is positive.”