Saint-Gobain Acquisition of GCP
Saint-Gobain to buy construction chemical maker GCP for $2.3 billion
Deal follows Sika’s recent purchase of BASF’s former construction chemical business
December 7, 2021
Credit: Shutterstock GCP Applied Technologies makes additives for spray concrete, among other construction chemicals.
Continuing consolidation in the construction chemical field, the French glass and building materials firm Saint-Gobain has agreed to pay $2.3 billion for GCP Applied Technologies, the construction chemical firm that used to be a part of W.R. Grace.
GCP makes concrete additives as well as sheet and spray-on barriers to control water, air, and vapor diffusion. GCP reported earnings of $101 million last year on sales of $903 million. The firm has 50 factories and 1,800 employees. Saint-Gobain says the deal will create a construction chemical business with annual sales of more than $4.5 billion.
In September, Saint-Gobain purchased Chryso, another maker of concrete additives. Chryso is strong in Africa, Europe, and the Middle East, while GCP is positioned well in North America, Latin America, and the Asia-Pacific region, according to Saint-Gobain. Both firms have product lines aimed at lowering the carbon footprint of concrete, an issue of increasing emphasis in the construction industry.
Similarly, Saint-Gobain will merge GCP’s barriers unit with related products it sells under the CertainTeed brand. Overall, the French firm says it has identified $85 million in annual costs it can shave by cutting staff and eliminating overlaps in sales and administration.
The purchase follows BASF’s 2020 divestment of its construction chemicals unit. The building products company Sika agreed last month to buy the former BASF unit, now called MBCC Group, for $5.9 billion.
The Chryso purchase, along with other moves in construction chemicals, places Saint-Gobain in direct competition with Sika, and that will be even more true after Saint-Gobain absorbs GCP, says Ian George, a managing director in the chemical group at the investment banking firm Piper Sandler.
Both the GCP and MBCC sales are part of a trend of construction chemical firms becoming part of broader building-product companies, he says. However, GCP was one of the last large bolt-on acquisitions available, George says, and it will be interesting to see how M&A plays out from here among the long tail of smaller firms.
In 2020, Saint-Gobain ended a 6-year attempt at a hostile takeover of Sika. Though Saint-Gobain didn’t succeed in assembling a controlling interest in its rival, it did make $1.7 billion selling the Sika stock it had collected along the way.« Previous Post Next Post »