Holcim up on $1.35bn US roofing firm acquisition
By Jenni Reid
12:04, 23 December 2021
Swiss building materials group Holcim (HOLN) got a share price boost on Thursday morning as it announced a takeover of US manufacturer Malarkey Roofing Products for $1.35bn in cash.
HOLN stock was up 2.30% to CHF46.23 (£37.45) at midday on the SIX Swiss Exchange.
The company described Portland-based Malarkey as a “proven growth engine in the highly profitable and growing US residential roofing market”.
Growth strategy
Holcim forecasts the deal will generate annual synergies of $40m by year three and accelerate growth in its solutions and products division to 30% of net sales by 2025.
Family-owned Malarkey makes roughly $100m in annual earnings before interest, taxes, depreciation and amortisation (EBITDA) according to an October Bloomberg report, which said the company was exploring strategic options, including a sale that could value it at $1.5bn.
For 2022 it has projected 2022 net sales of $600m and gross profit of $120m.
Holcim reported $25.13bn net sales and $3.98bn EBIT (earnings before interest and tax) in 2020, and saw 16.6% growth in its half-year 2021 results to $13.63bn, with record recurring EBIT, free cash flow and earnings per share.
The company signed seven bolt-on acquisitions through the first half as it expanded in Europe and North America, while divesting its operations in Zambia, Malawi and the Indian Ocean and selling its Brazilian division for a reported $1.02bn.