January 29, 2024

Holcim to Spin Off North American Business

Holcim jumps on $30bn plan to spin off North American unit

Holcim Ltd shares jumped after the Swiss cement maker said it will spin off its North American unit into a separate US-listed entity, a move that could unlock a higher valuation for the business.

This content was published on January 29, 2024 – 13:37 January 29, 2024 – 13:37

3 minutes

The US arm had about $11 billion in sales last year — about one-third of Holcim’s total — and could be valued at more than $30 billion, the company said. Holcim shares climbed as much as 14% in early trading, the most since March 2020, and were up 4% as of 12pm Zurich time, valuing the entire company at almost CHF39 billion ($45 billion).

US listings have become increasingly appealing to European companies as a wider investor base and bigger pool of capital offer the prospect of higher valuations. Holcim’s move for its US division follows the decision of fellow materials giant CRH Plc to shift from London to New York last year. 

Reacting to the news, Citigroup Inc. analyst Ephrem Ravi noted that US-listed building-product companies trade at a significant premium to European-listed peers. Zuercher Kantonalbank analyst Martin Huesler calculated the US business’s fair value at around $35 billion to $40 billion.

“It is a big advantage to have a customized capital structure for this business and to be in the US dollar,” Holcim Chief Executive Officer Jan Jenisch said in an interview on Monday with Bloomberg Television. 

Jenisch is stepping down from his role as CEO, and will be replaced by Miljan Gutovic, currently the head of the European business. Jenisch will remain chairman and lead the planned US listing of the North American business. He said the company would consider buybacks to help smooth the transaction.

The US market is growing at a rapid pace as builders race to relieve a chronic lack of single-family homes and meet regulatory pressures for more energy-efficient buildings. The unit expanded through an acquisition spree that broadened its offering of building materials. 

Holcim says the North American business is the No. 1 player in cement and No. 3 in roofing, and it aims to roughly double sales to about $20 billion by 2030.

Jenisch said the US housing market has great momentum, while downplaying risks of policy changes in case of a reelection of Donald Trump in the US presidential election in November. He said “economic policy is very consistent” and infrastructure and housing will remain a priority.

“We have a rockstar business in the US,” Jenisch said. “We will have a very strong capital structure for both companies so plenty of headroom to support the US listing.”

https://www.swissinfo.ch/eng/business/holcim-jumps-on–30bn-plan-to-spin-off-north-american-unit/49167234

January 10, 2024

Q4 Chemical M&A Activity

Chemical Deal Results

http://www.chemicaldeals.com/Results.aspx?searchtext=&quarter=4th+Quarter+2023

December 21, 2023

Recticel to Acquire REX

Recticel acquires REX to create a powerful Western European growth platform for insulated panels

Regulated information, Brussels, 21/12/2023 — 06:55 CET, 21.12.2023

After the acquisition of TRIMO in April 2022, Recticel announces a second major step in deploying its strategy to become a pan-European leader in the insulated panels segment.

Recticel has entered into a final agreement with Mr. Michel Verhelst, founder, to acquire 100% of REX PANELS & PROFILES SA.

REX, located in Tournai, Belgium, is specialized in the production of PIR and mineral wool insulated panels for the construction industry.

REX has a total recently constructed capacity of over 4 million m², utilised at 50%, with room for further expansion, and is perfectly located in Belgium to serve Western European markets.

The acquisition will allow Recticel Group in due course to:

• reinforce TRIMO’s premium strategy in Western Europe whilst doubling current production capacity;
• provide TRIMO access to the PIR insulated panels category, perfectly complimentary to its mineral wool insulated panels;
• accelerate the execution of REX’s growth strategy in the volume segment of the market;
• unlock substantial technical and commercial synergies.

Jan Vergote (CEO Recticel Group): “The acquisition of REX strengthens Recticel’s core purpose to become a leader in high-end sustainable construction through smart insulation solutions. We are impressed with the achievements of Mr. Verhelst and the REX team and look forward to start intensive cooperation upon closing.’’

Michel Verhelst (CEO REX): “Joining forces with the Recticel Group marks an important milestone for REX as it allows the company to grow and expand further. I am excited about the many possibilities and successes that lie ahead for REX and its employees.”

The transaction has an enterprise value of EUR 70 million in cash, with an earn-out mechanism linked to the EBITDA performance over 2024. The valuation is based on the market value of the acquired production assets, including a newly constructed production site that is planned to start up in Q1 2024.

The transaction is expected to be completed in January 2024.

https://www.recticel.com/recticel-acquires-rex-create-powerful-western-european-growth-platform-insulated-panels.html

December 18, 2023

Adnoc Bid for Covestro

Adnoc is said to prepare higher bid for Covestro

Dec. 18, 2023 1:38 PM ETCovestro AG (CVVTF) Stock, COVTY StockBy: Rob Williams NY, SA News Editor

• Abu Dhabi National Oil Co. is readying a higher bid for Covestro (OTCPK:CVVTF) (OTCPK:COVTY) and is prepared to offer concessions to begin detailed due diligence, Bloomberg News reported Monday, citing people with knowledge of the matter.
• State-owned Adnoc is prepared to offer €60 a share as soon as the coming days, the people said. That price would value Covestro (OTCPK:CVVTF) (OTCPK:COVTY) at about €11.3 billion ($12.3 billion). Adnoc also is willing to offer job guarantees for several years and $8 billion of investments after closing the deal, Bloomberg News reported, citing its sources.
• Talks between the two companies started in September after informal bids of €55 and €57 a share that Covestro (OTCPK:CVVTF) (OTCPK:COVTY) rejected as too low. Covestro’s (OTCPK:CVVTF) (OTCPK:COVTY) stock has risen about 45% this year to €53 a share, valuing the petrochemical company at €10 billion.

https://seekingalpha.com/news/4047628-adnoc-is-said-to-prepare-higher-bid-for-covestro?mailingid=33734335&messageid=2900&serial=33734335.299

December 17, 2023

Saint-Gobain Streamlining

Saint-Gobain to Sell Majority of UK Foam Insulation Business to Soprema

Published: Dec. 7, 2023 at 1:33 a.m. ET

By David Sachs

Saint-Gobain said it would sell a majority stake in its U.K. foam insulation business to Soprema as part of its disposal plan.

The French construction supplier said late Wednesday that Celotex’s assets will be transferred to a new standalone company, which will be 75% owned by Soprema, a private French waterproofing and insulation firm. Saint-Gobain will retain a 25% minority stake, it said.

The move is part of Saint-Gobain’s streamlining strategy, which includes asset-disposals.

Celotex has two manufacturing facilities in the U.K. and employs 155 people, Saint-Gobain said. The transaction is expected to close early next year.

Financial details were not disclosed.

https://www.marketwatch.com/story/saint-gobain-to-sell-majority-of-uk-foam-insulation-business-to-soprema-04c54756