Irish building materials group CRH has agreed to buy Pavestone Group for $540 million (€346.4 million) in cash on, aiming to expand in the United States even as the country's construction sector suffers a sharp slowdown.
Having spent €2.2 billion ($3.4 billion) on 78 acquisitions in 2007, chief executive Liam O'Mahony said earlier this month he hoped CRH could at least maintain the same rate in 2008 and said it had a "pipeline of potential deals".
Dallas-based Pavestone operates a network of concrete paver plants at locations across the United States which CRH said would complement the existing retail business of its US architectural products group (APG).
"While sentiment towards the US residential and related sectors remains weak, this (deal) raises the group's exposure to a segment which has delivered strong returns over many years and where continued medium term growth is projected," NCB analyst John Sheehan wrote in a research note.
US data earlier this month showed construction spending fell by a sharper-than-expected 1.7 per cent in January, led by a drop in private home building.
CRH recently predicted earnings growth in 2008 despite a drop in building activity in the United States and Europe - both major markets for one of the world's biggest suppliers to builders.
"The proposed acquisition of Pavestone represents an opportunity to build on our success in developing APG into the leading North American supplier of multiple landscaping products, enabling profitable growth," Mr O'Mahony said in a statement.
CRH said the Pavestone acquisition, which is subject to regulatory approval, included a deferred consideration based on future increases in profitability.
"This looks like a good deal for CRH in that it consolidates its position in the US paver market," Davy analyst Barry Dixon wrote in a note.
Shares in CRH were trading 3.6 per cent lower at €23.7 by 11.43am in light trade, underperforming a 2.9 per cent fall on the wider Irish market. The stock has fallen sharply from a record €38.20 set in mid 2007.