REG - Compagnie St-Gobain - Acquisition

Compagnie de Saint Gobain SAAnnouncement

15/08/2024 18:15

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RNS Number : 6709A  Compagnie de Saint-Gobain  15 August 2024

 

SAINT-GOBAIN FURTHER STRENGTHENS ITS WORLDWIDE PRESENCE IN CONSTRUCTION
CHEMICALS BY SIGNING A DEFINITIVE AGREEMENT TO ACQUIRE OVNIVER Group, A
LEADING PLAYER IN THE HIGH-GROWTH MEXICAN AND CENTRAL AMERICAN MARKETS

 

 

Saint-Gobain today announces that it has entered into a definitive agreement
to acquire OVNIVER Group, a leading privately-owned construction chemicals
player in Mexico and Central America, for $815 million (approximately €740
million) in cash.

 

Following the acquisitions of Chryso, GCP and FOSROC (underway), this move
represents another strategic step in establishing Saint-Gobain's worldwide
presence in construction chemicals, which will have combined sales of €6.5
billion across 76 countries following the acquisition (pro forma).

 

OVNIVER Group is a leading construction chemicals player with a strong
commercial and industrial footprint in the high-growth Mexican and Central
American markets. The company is expected to generate revenues of $285
million, with a growth rate of around 20% per year on average in the last 5
years, and achieve an EBITDA margin of 21.7% in 2024. With 16 manufacturing
plants and around 1,000 employees, OVNIVER Group offers a wide range of
innovative solutions for residential and non-residential construction markets,
including façade coatings, tile adhesives, waterproofing and surface
preparation mortars.

 

The purchase price represents an acquisition multiple (before synergies) of
approximately 13.1x OVNIVER Group's 2024E EBITDA of $62 million, and a
multiple of around 8.0x including run-rate synergies of approximately $40
million in year 3.

 

This acquisition will be fully financed in cash. The Group will maintain a
strong balance sheet with net debt / EBITDA remaining well within the target
range (1.5x to 2.0x), taking into account the acquisitions of CSR Limited,
FOSROC and OVNIVER Group. Closing of the transaction is subject to customary
conditions and is expected in the first half of 2025.

 

 

A CLEAR STRATEGIC RATIONALE

 

·    A highly complementary geographical footprint: this acquisition
strengthens Saint-Gobain's presence in the high-growth Mexican and Central
American markets. OVNIVER Group's strong positions in Mexico, Honduras, El
Salvador and Guatemala complement Saint-Gobain's existing manufacturing
presence in the region. Combined with the Group's recent acquisitions of IMPAC
in Mexico and Imptek in Ecuador in waterproofing, this transaction will
provide a unique platform to accelerate the introduction of innovative and
sustainable solutions into Mexico and Central America. OVNIVER Group is a
leading player in Mexico, one of the most attractive construction markets
worldwide, with growth supported by solid macroeconomic fundamentals and
demographic trends, increasing adoption of advanced building solutions, and
strong links with the US economy, notably through nearshoring.

 

·    A unique opportunity, fully aligned with Saint-Gobain's strategy to
accelerate its worldwide presence in construction chemicals, supported by
solid macroeconomic factors including strong urbanization and demographic
trends.

 

·    A strong track record of highly profitable growth: OVNIVER Group has
shown impressive growth, averaging 20% sales growth annually from 2019 to
2024E. The company boasts an EBITDA margin above 21% due to its strong brands,
well-positioned industrial footprint, broad product offer, robust commercial
organization, and experienced leadership team with a proven track record in
execution.

 

·    A value accretive acquisition for Saint-Gobain's shareholders and
customers, with strong synergy potential. Approximately $40 million of
synergies in year 3 following transaction close, of which $26 million are cost
synergies, anticipated through operational improvements, logistics
optimization, procurement economies of scale in polymers, other raw materials
and energy, as well as product reformulation and SG&A savings.
Additionally, Saint-Gobain expects at least $14 million in growth synergies
through cross-selling opportunities. These synergies will leverage
Saint-Gobain's existing strong presence in the wider light and sustainable
construction sector in Mexico and Central America, with already more than $1.5
billion of sales prior to this acquisition. The acquisition will create value
by year 3 following the closing of the transaction and will be EPS (Earnings
Per Share) accretive from year 1.

 

OVNIVER Group will be consolidated into the Americas Region.

 

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

"The acquisition of OVNIVER Group perfectly aligns with our "Grow &
Impact" strategic plan. It is an excellent opportunity for Saint-Gobain to
further reinforce its presence in construction chemicals and to strengthen its
presence in high-growth markets. I am very impressed with OVNIVER Group's
leadership, strategy and outstanding growth development, as well as the team's
track record of excellent execution. The combination of the two groups will
boost the rapid expansion of our profitable growth platform in construction
chemicals. I look forward to warmly welcoming the OVNIVER Group teams to
Saint-Gobain."

 

Hector Abella, Chief Executive Officer of OVNIVER Group, commented:

"Today marks the beginning of an exciting new chapter in OVNIVER Group's
history. Our focus on delivering the best solutions and customer satisfaction
has made us a leading player in Mexico and Central America in our sector. I
want to thank all our teams for their outstanding work over many years.
Joining Saint-Gobain, a worldwide leader in light and sustainable construction
with a well-established presence and strategy for Mexico as well as a global
player in construction chemicals is the perfect next step for us. It will
enhance our offering by leveraging Saint-Gobain's innovation and technology in
construction chemicals. I look forward to continuing our growth journey within
Saint-Gobain."

 

BNP Paribas is acting as financial advisor and Galicia is acting as legal
counsel to Saint-Gobain in connection with the transaction.

 

For more information, a presentation regarding the transaction is available 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".
 
€47.9 billion in sales in 2023
160,000 employees, locations in 76 countries

Committed to achieving net zero carbon emissions by 2050

 
For more information about Saint-Gobain, visit
www.saint-gobain.com (http://www.saint-gobain.com/)
 and follow us on X
@saintgobain (https://twitter.com/saintgobain)

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