REG - CRH PLC - CRH proposal to acquire Adbri in Australia

CRHAnnouncement

18/12/2023 07:00

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RNS Number : 1075X  CRH PLC  18 December 2023

  Press Release

CRH proposal to acquire Adbri in Australia

 

 

CRH plc, the leading provider of building materials solutions, together with
the Barro Group ("Barro" and together with CRH the "Partners") have entered
into an agreement with Adbri Ltd ("Adbri" or the "Company") in relation to a
potential transaction to acquire Adbri that is recommended by the Independent
Board Committee (IBC) of Adbri (the "Proposal").

Adbri, formerly known as Adelaide Brighton, is a leading building materials
business in Australia, listed on the Australian Securities Exchange (ASX). The
Partners have submitted a non-binding offer (the "Offer") to acquire 100% of
the ordinary shares of the Company for a cash price of A$3.20 per share. Adbri
recently announced that its 2023 underlying EBITDA is expected to be in a
range of A$310 - A$315 million and the Offer represents a multiple of
approximately 9x enterprise value to expected 2023 underlying EBITDA.

Under the Proposal, CRH would partner with Barro, an Australian family-owned
business and approximately 43% shareholder of Adbri. CRH currently has a 4.6%
interest in the Company via a cash settled derivative and would acquire the
remaining approximately 57% of Adbri's shares not owned by Barro with the
intention to delist Adbri from the ASX. The Partners' Proposal is non-binding
and subject to satisfactory completion of due diligence, entry into binding
transaction documentation, Adbri shareholder approval through a scheme of
arrangement and customary legal requirements, including relevant regulatory
approvals.

As separately announced by Adbri today, the Adbri IBC has agreed to provide
CRH exclusive due diligence access to progress the Proposal and intends to
recommend that Adbri shareholders vote in favour of the proposed transaction,
subject to entering into a binding scheme implementation deed and other
customary conditions.

The agreed cash consideration of A$3.20 per share values Adbri at an equity
valuation of A$2.1 billion (US$1.4 billion) on a 100% basis and values the
approximately 53% of issued share capital that the Partners do not currently
have an interest in and which CRH has agreed to acquire at A$1.1 billion
(US$0.75 billion).

Albert Manifold, Chief Executive of CRH, said: "We are very pleased to
announce this potential acquisition of Adbri in partnership with the Barro
family. We have held a long-term interest in the Australian construction
materials market, which has attractive attributes including stable market
dynamics and positive growth prospects, similar in nature to the Southern
United States and Central and Eastern Europe where we have a significant
presence.

Adbri is an attractive business with quality assets that complement our core
competencies in cement, concrete and aggregates. With its leading market
positions in Australia, we are delighted that this opportunity has presented
itself to us. It is the next logical step for CRH to expand our existing
presence in Australia, where we have been operating for 15 years.

This acquisition would strongly complement our existing Australian business,
creating additional opportunities for growth and development. We look forward
to working with the Barro family over the coming years to enhance the
long-term performance of the business, leveraging our scale, industry
knowledge and technical expertise to improve long-term growth and operating
performance and drive value to achieve the true potential of the business."

Contact CRH at +353 1 404 1000

   Albert Manifold      Chief Executive
   Jim Mintern          Chief Financial Officer
   Frank Heisterkamp    Director of Capital Markets & ESG
   Tom Holmes           Head of Investor Relations

 

About CRH

CRH (NYSE: CRH, LSE: CRH) is the leading provider of building materials
solutions that build, connect and improve our world. Employing c.75,800 people
at c.3,160 operating locations in 29 countries, CRH has market leadership
positions in both North America and Europe. As the essential partner for road
and critical utility infrastructure, commercial building projects and outdoor
living solutions, CRH's unique offering of materials, products and value-added
services helps to deliver a more resilient and sustainable built environment.
The company is ranked among sector leaders by Environmental, Social and
Governance (ESG) rating agencies. A Fortune 500 company, CRH's shares are
listed on the NYSE and LSE.

 

Registered Office: No 12965. Registered Office: 42 Fitzwilliam Square, Dublin
2, R02 R279, Ireland

 

Forward-Looking Statements

 

This document contains statements that are, or may be deemed to be,
forward-looking statements within the meaning of the United States Private
Securities Litigation Reform Act of 1995.

These forward-looking statements may generally, but not always, be identified
by the use of words such as "will", "believe", "continues", "is expected to",
"intends to" or similar expressions. These forward-looking statements include
all matters that are not historical facts or matters of fact at the date of
this document.

This document contains statements that are, or may be deemed to be,
forward-looking statements with respect to the business and future performance
of CRH and certain of the plans and objectives of CRH, including but not
limited to statements regarding plans and expectations in connection with the
Proposal and CRH's partnership with Barro; expectations for Adbri's 2023
underlying EBITDA and the multiple of enterprise value reflected by the
Proposal, plans and expectations related to completion of the transaction,
including the delisting of Adbri from the ASX; and plans and expectations
regarding the benefits of the proposed transaction and CRH's presence in
Australia.

Forward-looking statements are subject to risks, uncertainties and other
factors because they relate to events and depend on circumstances that may or
may not occur in the future and/or are beyond CRH's control or precise
estimate.

Such risks, uncertainties and other factors include, but are not limited to,
economic and financial conditions, including market turbulence, high interest
rates, inflation, price volatility and/or labor and materials shortages in
various countries and regions where we operate; the pace of growth in the
sectors in which we operate; demand for infrastructure, residential and
non-residential construction and our products in our geographic markets;
increased competition and its impact on prices; and increases in energy and/or
raw materials costs. There are other important factors, risks and
uncertainties that could cause actual outcomes and results to be materially
different, including risks and uncertainties relating to CRH described under
"Principal Risks and Uncertainties" in CRH's Report on Form 6-K regarding the
results for the six-month period ended 30 June 2023, as filed with the US
Securities and Exchange Commission (the "SEC"), as well as "Principal Risks
and Uncertainties (Risk Factors)" in the Company's 2022 Annual Report on Form
20-F as filed with the SEC.

You are cautioned not to place undue reliance on any forward-looking
statements. These forward-looking statements are made as of the date of this
document. CRH expressly disclaims any obligation or undertaking to publicly
update or revise these forward-looking statements other than as required by
applicable law.

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