Monday 11 December 2017

CRH adds to portfolio with €186m spent on 21 deals in six months


John Mulligan

Building materials group CRH has agreed to pay more than €100m for a Belgian cement business and said it spent €186m on 21 acquisitions and joint ventures in the first half of the year.

In an update provided by the company yesterday, CRH said it spent €126m in the United States during the first six months of 2011. Its Americas Materials unit spent €98m buying aggregates reserves in states such as New Hampshire and Ohio. It also entered into two joint ventures with Virginia-based Adams Construction -- one including three quarries with 222 million tonnes of reserves in Virginia, and the other venture involves six asphalt plants. Other acquisitions by the division were made in Mississippi, Texas and Utah.

CRH's Americas Products and Distribution division spent €28m in the first half. Its acquisitions included Florida-based Duratek Precast Structures, which designs, manufactures and instals precast walls and structures. It also bought a Quebec-based manufacturer and distributor of hardscape products and accessories.

The group's Europe Materials division spent €40m in the first six months. It boosted its shareholding in Grupa Silikaty, Poland's second-largest producer of sand-lime brick, from 75pc to 90pc. CRH's joint venture in Portugal, Secil, also acquired Lafarge's Portuguese aggregates and readymixed concrete business that includes 30 concrete plants, four quarries and 56 million tonnes of aggregates reserves. An acquisition was also made in Ukraine last month.

CRH's Europe Products and Distribution division spent €20m in the first half buying companies in Belgium, Australia and the Netherlands.

CRH chief executive Myles Lee said that the pipeline of potential acquisitions for the group remained "good" and that the group remained ready to capitalise on opportunities.

The €100m acquisition of the business in Belgium -- VVM -- is subject to regulatory approval. Mr Lee said the purchase represented an "important strategic opportunity" for CRH's existing Cementbouw trading and readymixed concrete business in the Benelux. VVM, which is family-owned, operates two cement grinding mills in Belgium and two readymixed plants -- one in Belgium and the other in France.

Analyst David O'Brien at Goodbody Stockbrokers said the CRH spend in the first half was in line with expectations. He's forecasting a total acquisition and investment spend by CRH of €600m for the full year.

"It is encouraging to see deals across all divisions, despite the uncertain macro economic backdrop," said Mr O'Brien.

Shares in CRH closed at €14.75, down 27 cents.

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