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CRH planning sale of European distribution business: Reuters
Posted on Friday, 12 April 2019 13:59
Irish building products group CRH is exploring a disposal of its European distribution operations and has hired Bank of America to launch a sale, people close to the situation told Reuters. According to the sources, a process is expected to start next month; however, the group is due to provide a trading update on 24th April and could formally announce plans to divest then. Private equity groups such as Advent, Lone Star and CVC have reportedly already expressed interest, although when contacted by Reuters, each declined to comment. The European distribution business is said to have been on the block for around a year, with CRH reviewing options for the unit in 2018 to streamline operations and boost growth. A deal could be valued at EUR 2.00 billion, or 11.0x the division’s core earnings of EUR 181.00 million, Reuters reported. CRH is looking to focus on core-operations and strip underperforming assets as the company overall increased earnings last year, while the potential target declined slightly over the same timeframe. One source told the news provider that whoever buys the distribution operations would have to turn around the business ahead of a possible recession that could have significant consequences on the building products industry. CRH claims to be a leader in providing materials to this sector, with 90,000 employees at over 3,700 locations worldwide. The company recorded revenue of EUR 26.79 billion in the year ended 31st December 2018, a 6.0 per cent increase on EUR 25.22 billion in the previous 12 months. Earnings before interest, taxes, depreciation and amortisation totalled EUR 3.37 billion in 2018, compared to EUR 3.15 billion in 2017. © Zephus Ltd