TIDMCOD
RNS Number : 1892T
Compagnie de Saint-Gobain
12 November 2019
PRESS RELEASE
November 12, 2019
SAINT-GOBAIN ENTERS INTO DEFINITIVE AGREEMENT TO ACQUIRE
CONTINENTAL BUILDING PRODUCTS
Saint-Gobain and Continental Building Products (NYSE: CBPX)
today announce that they have entered into a definitive agreement
pursuant to which Saint-Gobain will acquire all of the outstanding
shares of Continental Building Products for $37.00 per share, in
cash, in a transaction valued at approximately $1.4 billion
(approximately EUR1.3 billion). The business combination has been
unanimously approved by the Board of Directors of Saint-Gobain and
by Continental Building Products' Board of Directors.
Continental Building Products, a highly respected plasterboard
player in North America, employs 645 people and is expected to
generate 2019 revenues of approximately $510 million and adjusted
EBITDA of approximately $130 million per broker consensus. The
business has strong geographic complementarity with Saint-Gobain's
North American operations, good positioning in growth regions in
the East and South-East of the United States and strong
profitability.
Strategic Benefits
-- Broadens Saint-Gobain's asset portfolio and enhances ability
to provide wider customer base with innovative solutions.
Continental Building Products has developed a top-tier platform in
plasterboard in North America with strong customer relationships.
The combination will allow customers to benefit from an enriched
product portfolio supported by Saint-Gobain's global R&D and
product development infrastructure.
-- Increases Saint-Gobain's presence in growth regions in the United States. The geographical complementarity of the production sites will allow better commercial coverage and more efficient logistics services, in particular in high growth regions in the United States.
-- Creates opportunity for approximately $50 million in cost
synergies and performance improvements. These cost synergies are
expected by the end of the third year following transaction close.
Saint-Gobain expects the synergies will be captured through the
integration of Continental Building Products' operations into
Saint-Gobain's North America gypsum business. The categories of
benefits include logistics optimization, purchasing, operations and
SG&A efficiencies. In addition, Saint-Gobain expects to benefit
from additional sales thanks to an enlarged commercial platform and
its ability in transversal innovation, to the benefit of North
American consumers.
-- Similar culture and shared values. Continental Building
Products' teams will be integrated into the Group's gypsum business
in North America, which will in turn be able to lean on their
expertise and know-how. Continental Building Products' continuous
operational improvement program, Bison Way, rests on the same
pillars as the World Class Manufacturing program at Saint-Gobain.
The integration of both companies will be enabled by close business
cultures and operational models, which will allow the acceleration
of value creation for our shareholders and our customers.
The agreed upon price represents a premium of 34.4% to the
volume weighted average price for the 60 trading days ending
November 11, 2019, a multiple (before synergies) of approximately
11.0x Continental Building Product's 2019E adjusted EBITDA of $130
million per broker consensus estimates and a multiple of 7.9x
EBITDA post run-rate synergies. Saint-Gobain will largely finance
the acquisition using the proceeds from divestments made by the
Group. Saint-Gobain expects the transaction to be value creative by
the third year following transaction close, in line with the
Group's acquisition criteria.
Edward Bosowski, Chairman of Continental Building Products and
Jay Bachmann, Chief Executive Officer, commented:
"This is an exciting day for Continental Building Products, our
shareholders, customers and employees and represents the
culmination of the hard work of our highly talented workforce.
Saint-Gobain is the ideal strategic partner with the resources to
support our development, commitment to operational excellence and
global platform that will enable us to continue to provide
outstanding customer service. We believe this is a terrific outcome
for our shareholders and thank the teams at Continental Building
Products for the fantastic work they have done over many
years."
Pierre-André de Chalendar, Chairman and Chief Executive Officer
of Saint-Gobain, and Benoit Bazin, Chief Operating Officer,
commented:
"The acquisition of Continental Building Products is a unique
opportunity allowing Saint-Gobain to move to the forefront of
plasterboard and construction solutions in North America. With the
very strong industrial platform and expert teams that Continental
Building Products brings, Saint-Gobain will be able to accelerate
the deployment of its innovative product offering in order to
better serve customers. We are very impressed by the quality of
work accomplished by the Continental Building Products' teams over
many years and are very happy to welcome them to Saint-Gobain. We
share the same industrial and commercial cultures as the
Continental Building Products' teams and are confident that
together we can leverage our expertise and know-how to drive
sustainable and profitable growth, to the benefit of our customers
and the end consumer. This transaction will enable Saint-Gobain to
enhance its growth and profitability profile, in line with the
'Transform & Grow' program, and to create value for our
shareholders."
This transaction is part of Saint-Gobain's portfolio
optimization strategy, one of the two pillars of the transformation
program "Transform & Grow". Divestments completed or signed by
the Group to date represent sales of around EUR3.3 billion with
cash proceeds of over EUR1 billion, for an EBITDA multiple of
around 10x and an operating income multiple of around 15x. The
full-year operating margin impact is more than 40 basis points,
ahead of the target of the "Transform & Grow" program of a gain
of 40 basis points in the operating margin. Saint-Gobain is
continuing its divestment program even though the initial target of
over EUR3 billion in sales divested by the end of the year has
already been met.
With regard to acquisitions, the Group has closed 12
transactions since the beginning of the year including Pritex
(Mobility, acoustic solutions), Plaka Mexico (plasterboard), Celima
(Mortars in Peru), as well as transactions to optimize our
positioning in Distribution in Nordic countries.
Closing of the transaction is subject to Continental Building
Products shareholders' approval, U.S. antitrust approval and
fulfillment of other customary closing conditions with expected
closing in the second half of 2020.
Lazard and Morgan Stanley are acting as financial advisors, and
Cleary Gottlieb Steen & Hamilton is acting as legal counsel to
Saint-Gobain in connection with the transaction.
ABOUT SAINT-GOBAIN
Saint-Gobain designs, manufactures and distributes materials and
solutions which are key ingredients in the wellbeing of each of us
and the future of all. They can be found everywhere in our living
places and our daily life: in buildings, transportation,
infrastructure and in many industrial applications. They provide
comfort, performance and safety while addressing the challenges of
sustainable construction, resource efficiency and climate
change.
EUR41.8 billion in sales in 2018
Operations in 68 countries
More than 180,000 employees
For more information about Saint-Gobain
Visit www.saint-gobain.com
and follow us on Twitter @saintgobain
Analyst/Investor relations Press relations
+33 1 47 62 +33 1 47 62 30
44 29 10
+33 1 47 62 +33 1 47 62
Vivien Dardel 35 98 Laurence Pernot 51 37
Floriana Michalowska +33 1 47 62 Patricia Marie +33 1 47 62
Christelle Gannage 30 93 Susanne Trabitzsch 43 25
----------------------- -------------- -------------------- ---------------
Analyst/Investor Conference Call on November 13, 2019 at 8:00
a.m. Paris time (GMT + 1)
Dial-in: + 33 (0) 1 72 72 74 03 or +1 646 722 4916 (code
32935652#)
Please dial in 5 to 10 minutes prior to the scheduled start
time
Replay: +33 (0) 1 70 71 01 60 or +1 646 722 4969 (code
418887531#), from 10:30 a.m. Paris time until December 13, 2019
A presentation regarding the transaction will be available
before the conference call on
Saint-Gobain's website at:
https://www.saint-gobain.com/en/finance/events-and-financial-results
Forward-Looking Statements
This press release contains forward-looking statements.
Forward-looking statements may be identified by the use of words
such as "anticipate", "believe", "expect", "estimate", "plan",
"outlook", and "project" and other similar expressions that predict
or indicate future events or trends or that are not statements of
historical matters.
Forward-looking statements should not be read as a guarantee of
future performance or results, and will not necessarily be accurate
indications of the times at, or by, which such performance or
results will be achieved.
Forward-looking statements are based on historical information
available at the time the statements are made and are based on
management's reasonable belief or expectations with respect to
future events, and are subject to risks and uncertainties, many of
which are beyond the Company's control, that could cause actual
performance or results to differ materially from the belief or
expectations expressed in or suggested by the forward-looking
statements.
Forward-looking statements speak only as of the date on which
they are made and the Company undertakes no obligation to update
any forward-looking statement to reflect future events,
developments or otherwise, except as may be required by applicable
law.
Investors are referred to information published by the Company
on its web site (www.saint-gobain.com) and filed with the Autorité
des marchés financiers, including its Annual Report and its
Quarterly Reports for additional information regarding the risks
and uncertainties that may cause actual results to differ
materially from those expressed in any forward-looking
statement.
This communication does not constitute an offer to purchase,
sell or exchange, or the solicitation of an offer to purchase, sell
or exchange, any securities.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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