CRH offloads parts of US firm

CRH has begun offloading unwanted parts of last month's €1 billion acquisition in the US.

A spokesman for the building materials giant confirmed yesterday that its US subsidiary is in the process of selling low-margin businesses that formed part of Apac, the Virginia-based operation it bought last month for €1 billion.

According to reports in the US, CRH has already sold part of Apac's Georgia operations to a company called CW Matthews, and is seeking to sell businesses in Texas, Virginia and the Carolinas.

The operations it has put on the block are low-margin contractors and the move is designed to streamline Apac and focus it on the supply of materials rather than on contracting.

CRH's spokesman said that the Irish group had planned to do this from the beginning.

"This was signalled last month when the acquisition was made," he said.

The company did not comment beyond that and no price was mentioned. Analysts also said the move had been expected.

The news failed to prevent its share price slipping by 45 cent to close at €26.40 in Dublin yesterday, even though the markets regarded the move as a positive one.

CRH announced last month that it was buying Apac from its owner Ashland for €1.008 billion. The news followed earlier revelations that the group was carrying out due diligence on the US company as a prelude to making an offer.

Apac is a leading US asphalt, quarried material and highway construction company. Last year, it had sales of €2.3 billion and earnings before interest, tax and write-offs of €170 million.

Apac's products and the fact that it had a presence in regions where CRH's Americas materials division had yet to get a foothold were the main reasons for the purchase.

The company is a big producer of asphalt, which will give CRH greater scope for taking advantage of an ongoing federal road building programme in the US.

In the medium term, CRH chief executive, Liam O'Mahony signalled that the group is also likely to use Apac to acquire new companies in the US, which accounted for more than half its €526 million first-half profits.