CRH considering sale of European distribution arm as part of $8.2bn capital raising plan
CRH, one of the world’s largest providers of construction materials, may sell off its European distribution business, according to reports.
The Irish company, which turns over around $31.5bn, is looking to raise €7bn ($8.2bn) in financial capacity over the next four years, which it says will provide “significant opportunities for further value creation for our shareholders”.
“We have initiated a strategic review of our Europe Distribution business, focused on improving the margins and returns of the business, as well as exploring other strategic options,” the company said in a statement.
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The business unit in question, which supplies materials to builders, contractors and plumbers, accounts for 16% of overall sales but only accounts for 9% of earnings before interest, tax, depreciation and amortisation (EBITDA), suggesting efficiencies can be made.
However, the Irish Times says market sources suggest a sale of $2.8bn is possible, with potential buyers being Kingfisher and Saint-Gobain.
CRH has already sold its US distribution business (Allied Building Products) in recent months to Beacon Roofing Supply for $2.6bn.
CRH also said it will establish a new global Building Products division from the beginning of 2019, bringing together its Europe Lightside, Europe Distribution and Americas Products divisions. Keith Haas, currently President of the Americas Products division, will assume leadership of the new consolidated unit.
