CRH to launch €2bn deal for sale of distribution business
By Maurice Garvey
BUILDING materials group CRH has hired Bank of America to launch the sale of its European distribution business in a deal valuing the unit at about €2 billion - including debt.
The sale is expected to kick off next month and has already drawn interest from a series of buyout funds including Advent, Lone Star and CVC, according to industry sources.
CRH HQ is based at Belgard Castle
Further share buybacks at the global group - headquartered at Belgard Castle - are under ‘active consideration’, and will be announced as part of the company’s trading update announcement on April 24.
The European division has core earnings of €181m and could fetch a valuation of about €2 billion, representing a multiple of 11 times its core earnings.
CRH put the entire unit under review last year as part of a plan to streamline its operations and boost growth.
While the whole group saw its core earnings rise by 7 per cent to €3.3 billion last year, the European distribution business was underperforming, with core earnings down 1 per cent.
The company reported record earnings of €3.37bn for 2018.
During the period the group completed €3.6bn worth of acquisitions and €3bn of disposals.
It also returned €800m to shareholders in 2018 through it’s share buyback programme.
Speaking in February during the announcement of CRH’s full year results for 2018, Albert Manifold, Chief Executive said the group remained “well positioned” to build on the gains made in 2018.
“With a relentless focus on continuous business improvement, margin expansion, cash generation and returns for shareholders, together with continued strong financial discipline and efficient allocation of capital, we believe 2019 will be a year of progress and further growth for the group,” he said.
