REG - Compagnie St-Gobain - Acquisition

Compagnie de Saint Gobain SAAnnouncement

12/06/2023 17:30

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RNS Number : 4556C  Compagnie de Saint-Gobain  12 June 2023

 

 

SAINT-GOBAIN SIGNS A DEFINITIVE AGREEMENT TO ACQUIRE

BUILDING PRODUCTS OF CANADA CORP.

 

Saint-Gobain announces that it has entered into a definitive agreement for the
acquisition of Building Products of Canada Corp. ("Building Products of
Canada"), a privately owned manufacturer of residential roofing shingles and
wood fiber insulation panels in Canada, for C$1,325 million (approximately
€925 million) in cash.

 

With this acquisition, Saint-Gobain takes a logical step to reinforce its
leadership in light and sustainable construction in the Canadian market. With
Building Products of Canada, Saint-Gobain will be well positioned to better
serve Canadian customers, to whom it will bring a broader innovative and
sustainable range of solutions.

 

·        Building Products of Canada completes the offer of
Saint-Gobain on Exterior Solutions in Canada with Roofing, following the
addition of Siding thanks to the Kaycan acquisition in 2022;

·        The acquisition complements the existing CertainTeed Canada
operations, already leader in Interior Solutions (gypsum, insulation,
ceilings).

 

The purchase price represents a multiple (before synergies) of approximately
11.9x Building Products of Canada's 2022 EBITDA of C$111 million and an
acquisition multiple of approximately 8.2x when including run-rate synergies
of approximately C$50 million.

 

The acquisition meets the Group's strategic and financial criteria articulated
in the "Grow & Impact" plan:

 

1)   Strengthening the Group's leadership in North America as well as
enriching our offering in light and sustainable construction;

2)   Value creation by year 3 following the closing of the transaction;

3)   Maintaining a strong balance sheet with a limited impact of +0.1x on
net debt to EBITDA and with leverage remaining below the target set (1.5x to
2.0x).

 

Closing of the transaction is subject to customary conditions and expected by
year-end 2023.

 

 

STRATEGIC BENEFITS

 

Building Products of Canada is a leading roofing and exterior building
products player in Canada with three manufacturing plants servicing the full
country (Montreal, Edmonton, Pont-Rouge) and 460 employees. It has a leading
position in asphalt shingle roofing in Canada and offers a comprehensive range
of exterior building products including wood fiber insulation panels and
acoustic panels. It sells through more than 1,200 points-of-sale across home
center retailers and specialty distribution channels.

 

Leveraging its highly efficient country-based organization, Saint-Gobain will
add C$435 million to its leadership in Canada, where it has already around
C$1.4 billion of sales, primarily gypsum, insulation, ceilings and siding,
including its recent acquisitions of Kaycan and GCP in 2022. It will allow
Saint-Gobain to enhance the scope of the light and sustainable construction
solutions offered with roofing products, for the benefit of its Canadian
customers. In addition, Saint-Gobain's innovation capability will allow
Building Products of Canada to develop a broader, more innovative, and more
sustainable range of products for its customers.

 

VALUE CREATION & SYNERGIES

 

A value-creative transaction for Saint-Gobain's shareholders. This acquisition
will create value by year 3 following closing of the transaction and will be
EPS (Earnings Per Share) accretive from year 1. It will provide an enhanced
proposition for our customers thanks to a full-range offer:

1)   Leverage our innovation for unique full-range solutions: bring
CertainTeed building integrated photovoltaic (BIPV) Solstice(®) shingles to
the Canadian market, enrich the Building Products of Canada offer with our
ClimateFlex(®) all-weather technology, our industry-leading reflective
shingle Solaris(®), our widest range of Landmark(®) premium products, and
our best-in-class Roof System that utilizes all CertainTeed's roofing
components including GCP underlayment;

2)   Drive sustainability in building materials: leverage CertainTeed
circular economy know-how and recycle Building Products of Canada shingle
waste leveraging CertainTeed's partnership with Asphaltica, for recycling
asphalt shingle used in roofing.

 

Significant synergy opportunities are estimated at c. C$50 million by year 3
following the closing of the transaction. This includes cost synergies of c.
C$40 million which are expected to be captured through the combination of
Building Products of Canada's materials procurement with that of Saint-Gobain,
the implementation of Saint-Gobain's World Class Manufacturing program
leveraging best practices from its industry leading position across its 17 US
roofing plants, optimization of freight and logistics costs across North
America, as well as SG&A cost optimization. Sales synergies of c. C$10
million are expected thanks to cross-selling opportunities with Kaycan
(leveraging the full exterior solutions offering) and using Building Products
of Canada channels to sell other Saint-Gobain product categories and expand
their product range in roofing (with Landmark(®) shingles, GCP Ice &
Water Shield(®) waterproofing membranes).

 

Benoit Bazin, Chief Executive Officer of Saint-Gobain, commented:

"I am very pleased to announce the acquisition of Building Products of Canada
and I look forward to soon welcoming into our Group the Building Products of
Canada teams, who over the years have built a very attractive, highly
respected and renowned position in Canada. This is an important and logical
step for Saint-Gobain, allowing us to establish a leading position in roofing
in Canada, completing our offering for the building envelope which we have
reinforced with the recent Kaycan and GCP acquisitions. It completes our
offering of solutions for light and sustainable construction in Canada as we
have done successfully in the United States. The acquisition is perfectly
aligned with our "Grow & Impact" strategy, reinforces our position in
North America and builds on our many proven successes in this region over the
last four years. It will create significant value for shareholders, enhance
the profitable growth outlook of the Group, enrich our solutions to better
serve our customers and provide attractive development opportunities for both
the Building Products of Canada and Saint-Gobain teams."

 

Yves Gosselin, President & Chief Executive Officer of Building Products of
Canada, commented:

"Today marks the beginning of an exciting new chapter in the history of
Building Products of Canada. Our focus on delivering the best solutions and
satisfaction to our customers has enabled us to become a leading player in
roofing in Canada. The opportunity to join Saint-Gobain, the worldwide leader
in light and sustainable construction, and which is investing significantly in
Canada, is the perfect next step to further enrich our offer by leveraging
Saint-Gobain's innovation and technology: I want to thank all our teams for
their outstanding work over many years, and I look forward to leading the
integration of Building Products of Canada into Saint-Gobain and continuing to
drive profitable growth."

 

RBC Capital Markets, LLC is acting as financial advisor, and Cleary Gottlieb
Steen & Hamilton LLP and Blake, Cassels & Graydon LLP are acting as
legal counsel to Saint-Gobain in connection with the transaction. Deloitte
Corporate Finance Inc. is acting as financial advisor and McCarthy Tétrault
LLP is acting as legal advisor for Building Products of Canada.

 

Analyst/Investor Conference Call on June 12, 2023 at 6:30 pm Paris time (GMT +
1)

Dial-in: +33 1 70 91 87 04 or +44 12 1281 8004 or +1 718 705 8796

Please dial in 5 to 10 minutes prior to the scheduled start time.

Replay: +39 02 802 0987 then press 700724# and 724# from 9:00 pm Paris time
until July 12, 2023.

A presentation will be available before the conference call on Saint-Gobain's
website at: https://www.saint-gobain.com/en/finance/financial-events
(https://www.saint-gobain.com/en/finance/financial-events)

 

 

ABOUT SAINT-GOBAIN

Worldwide leader in light and sustainable construction, Saint-Gobain designs,
manufactures

and distributes materials and services for the construction and industrial
markets. Its integrated solutions for the renovation of public and private
buildings, light construction and the decarbonization

of construction and industry are developed through a continuous innovation
process and provide sustainability and performance. The Group's commitment is
guided by its purpose,

"MAKING THE WORLD A BETTER HOME".

€51.2 billion in sales in 2022

168,000 employees, locations in 75 countries

Committed to achieving Carbon Neutrality by 2050

 

For more information about Saint-Gobain,

visit www.saint-gobain.com and follow us on Twitter @saintgobain

 

 

 

 

 

 

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