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[August 2006]
CRH to Acquire APAC in Group's Largest Ever Transaction
CRH PLC has announced that its US subsidiary, Oldcastle Materials Inc, has reached agreement to purchase Ashland Paving And Construction Inc (APAC) for a total consideration, including zero net debt at acquisition, of US$1.3 billion (1.008 billion euro); the final price to be adjusted for seasonal working capital and some other accounts at completion.
Goodwill arising on the transaction is estimated at approximately US$450 million. This agreement follows extensive due diligence under the terms of an exclusivity agreement with APAC’s parent company, Ashland Inc, announced on 19 June 2006. Completion of the purchase of APAC, which has received antitrust clearance, is anticipated before the end of August. CRH will finance the acquisition using debt.
APAC, headquartered in Atlanta, GA, USA is a leading US aggregates, asphalt and heavy highway construction company with approximately 9,700 employees and extensive operations in 14 mid-western and southern states. In the 12 months ending June 2006, sales amounted to US$2.9 billion with profit before interest, tax, depreciation and amortisation (EBITDA) of approximately US$220 million, before charging depreciation and amortisation of US$106 million. Gross assets as at 30 June 2006 were US$1.665 billion.
In the year ended June 2006 APAC produced 32.5 million tons of aggregates, 31 million tons of asphalt and 1 million cubic yards of readymixed concrete. Approximately one-third of APAC’s aggregates production and two-thirds of asphalt production are consumed internally by APAC’s construction operations.
APAC has vertically integrated aggregates, asphalt and highway construction operations in Kansas, Missouri, Oklahoma, Arkansas and Mississippi, all with leading regional market positions. APAC is also a leading integrated player in the Memphis area of western Tennessee, in eastern Tennessee/western North Carolina and in southern Florida. Total permitted reserves amount to over 2 billion tons. In addition APAC has significant asphalt and highway construction operations in West Virginia, Virginia, Alabama, Georgia, the Carolinas, northern Florida and Texas.
APAC’s President Kirk Randolph who has over 20 years' experience with APAC will continue to have responsibility for APAC as part of CRH’s Americas Materials division which is led by Mark Towe working closely with Tom Hill, head of the overall Americas business. Key APAC operational management will remain with the business and join the Americas Materials division. In addition, a number of senior managers from Americas Materials will be assigned to work with the existing APAC team to assist with its integration.
Commenting on the agreement to purchase APAC, Liam O’Mahony, CRH Chief Executive, said: "I am delighted that agreement has been reached for the purchase of APAC which represents a major milestone in the development of our Americas Materials business and the largest ever transaction to be completed by CRH. We aim to build on this significant new platform through enhancing the materials focus of APAC’s business and through the application of the Americas Materials Division’s vertically integrated approach to aggregates, asphalt and highway construction."
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