Saint-Gobain Moves Forward With Acquisition of Continental Building Products
According to Saint-Gobain, the waiting period under the Hart-Scott-Rodino Act has expired, thereby satisfying the regulatory approval requirements under the merger agreement. The group anticipated the deal to close on Feb. 3.
"We are excited to have quickly received all necessary approvals to finalize the acquisition of Continental Building Products," said Pierre-André de Chalendar, chairman and CEO of Saint-Gobain. "This transaction will allow us to become a leading player in plasterboard and construction solutions across North America. It will enable the Group to enhance its growth and profitability profile, in line with the objectives of our ‘Transform & Grow’ program, and will create value for our shareholders."
As stated in November 2019 when the deal was announced, Saint-Gobain will acquire all the outstanding shares of Continental Building Products for $37 per share, in cash, in a transaction valued at approximately $1.4 billion (approximately €1.3 billion).
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.
Saint Gobain states the acquisition creates an opportunity for at least $50 million in cost synergies and performance improvements. These cost synergies are expected by the end of the third year following transaction close (i.e. full year 2022). Saint-Gobain expects these synergies will be captured through the integration of Continental Building Products’ operations into Saint-Gobain’s North America gypsum business.
Saint-Gobain anticipates the acquisition will broaden its asset portfolio and enhance its ability to provide wider customer base with innovative solutions. The combination will allow customers to benefit from an enriched product portfolio supported by Saint-Gobain’s global R&D and product development infrastructure.
The acquisition will also increase Saint-Gobain’s presence in the United States, as Continental Building Products will provide a strong geographic complement to Saint-Gobain’s North American operations in addition to positioning it for growth regions in the East and Southeast United States.
The integration of both companies is expected to be smooth due to similar business cultures and operational models. Continental Building Products will be joining its plasterboard business in the U.S., which will be managed by Jay Bachmann, former CEO of Continental Building Products.
"By combining forces with Continental Building Products, we have a unique opportunity to deliver innovative products to growth markets across North America, while maintaining a superior level of customer service," said Benoit Bazin, chief operating officer. "Our integration plan is on track and we are confident in our ability to deliver the expected synergies."