Simpson Manufacturing agrees to buy Etanco for about $818 million (updated)

Simpson Manufacturing

29/12/2021 21:51

(Adds deal details)
    Dec 29 (Reuters) - Building materials producer Simpson Manufacturing Co
 SSD.N  said on Wednesday it had agreed to buy European peer Etanco Group for
about $818 million.
    The acquisition, which is expected to close by the end of the first quarter
of 2022, is anticipated to add to Simpson's earnings within the first full
fiscal year following the deal.
    "We expect the acquisition to drive significant net sales growth with
operating income synergies of approximately $30 million on an annual run rate
basis," said Karen Colonias, president and chief executive officer of Simpson.
    The transaction would allow the company to enter into new commercial
building markets such as facades, waterproofing, safety and solar, as well as
grow its share of direct business sales, Simpson said.
    The purchase is expected to be funded via a combination of $100 million of
existing cash, with the rest from borrowings under the company's existing
revolving credit facility and a $450 million unsecured term loan with committed
financing from Wells Fargo Bank and MUFG Union Bank.
    Simpson said the credit facility will be increased to $450 million from $300
million.
    EC Mergers & Acquisitions and KPMG LLP served as financial advisers to
Simpson, which is valued at $5.97 billion.

 (Reporting by Kannaki Deka in Bengaluru; Editing by Maju Samuel)
 ((Kannaki.Deka@thomsonreuters.com;))