TIDMCOD
RNS Number : 4790N
Compagnie de Saint-Gobain
31 May 2022
SAINT-GOBAIN REINFORCES ITS LEADERSHIP IN LIGHT AND SUSTAINABLE
CONSTRUCTION IN NORTH AMERICA BY SIGNING A DEFINITIVE AGREEMENT TO
ACQUIRE KAYCAN, TOP SIDING PLAYER IN CANADA
Saint-Gobain announces today that it has entered into a
definitive agreement pursuant to which the Group will acquire
Kaycan, Ltd., a family-owned manufacturer and distributor of
exterior building materials in Canada and in the United States, for
US$928 million (approximately EUR860 million) in cash.
With this acquisition, Saint-Gobain reinforces its worldwide
leadership in light and sustainable construction by becoming the
top siding player in Canada and enlarging its vinyl offer across
the United States with complementary solutions including notably
aluminum and engineered wood.
The price represents a multiple (before synergies) of
approximately 11.2x Kaycan's 2021-2022E[1] EBITDA of US$83 million
and a net acquisition price of approximately US$820 million, i.e. a
multiple of approximately 8.0x EBITDA post run-rate synergies of
US$30 million and after the planned divestiture of the small United
States distribution arm of Kaycan (that accounts for c.US$70
million in stand-alone resell of Kaycan products to third parties
and c.US$10 million in EBITDA, assumed to be sold at a similar
pre-synergy multiple to a third party shortly after the
finalization of the transaction), while keeping the locally
well-established Canadian distribution.
This acquisition meets the Group's strategic and financial
criteria articulated during the Capital Markets Day of October 6,
2021:
1) Strengthening the Group's leadership in North America as well
as enriching our offering in light and sustainable construction
2) Value creation by year 3 following the closing of the transaction
3) Maintaining a strong balance sheet and solid credit rating
with a limited impact of +0.1x net debt to EBITDA with leverage
staying within the target set (1.5 to 2.0x)
Closing of the transaction is subject to antitrust approvals and
satisfaction of other customary closing conditions; it is expected
to close by year-end 2022.
STRATEGIC BENEFITS
Ka ycan is a leading exterior building materials player with
US$472 million in revenues - more than half in Canada and the
remainder in the United States, 12 manufacturing plants (of which 9
in Canada) and employing around 1,300 people. It is the leading
manufacturer of siding products in Canada which it sells thanks to
its well-known and trusted brand via its dedicated distribution and
strong channel coverage in big box retail, providing unparalleled
customer reach across the country and with recycling services of
post-consumption materials which can in turn be incorporated into
the production process. Leveraging the highly efficient country
organization of Saint-Gobain, this acquisition will complement the
Group's leadership in Canada (where Saint-Gobain achieved 2021
sales of around CAD$750 million across gypsum, insulation, ceilings
and roofing) allowing it to broaden the light and sustainable
construction solutions offered for the benefit of its Canadian
customers. It will also allow Saint-Gobain to strengthen and expand
its channel coverage and partnerships to reach new customers in the
light commercial market.
The acquisition also enables Saint-Gobain to reinforce its
activities in siding in the United States and will allow the Group
to broaden its offer towards the growing markets of aluminum and
engineered wood siding solutions, manufactured using a high degree
of recycled materials.
VALUE CREATION & SYNERGIES
A value-creative transaction for Saint-Gobain's shareholders
with significant synergies. This acquisition will create value by
year 3 following closing of the transaction. Saint-Gobain will
finance the acquisition through cash on its balance sheet.
Significant synergy opportunities are estimated at c. US$30 million
by year 3 following the closing of the operation, including cost
synergies of c. US$23 million which are expected to be captured
through the reduction of SG&A, economies of scale in
procurement, and manufacturing and logistics cost optimization.
Benoit Bazin, Chief Executive Officer of Saint-Gobain,
commented:
"The acquisition of Kaycan is an excellent step for Saint-Gobain
and I am very enthusiastic to warmly welcome the Kaycan teams into
the Group. Not only does this acquisition allow us to strengthen
our presence in siding both in Canada and in the United States, but
it also allows us to broaden our offering into the exciting growth
areas of aluminum and engineered wood siding, largely made with
recycled materials and thus helping to drive the circular economy
ecosystem in construction. It is perfectly aligned with the "Grow
& Impact" strategy announced at our Capital Markets Day and
reinforces our position in North America and as the worldwide
leader in light and sustainable construction. It will create
significant value for shareholders, enhance the profitable growth
outlook of the Group, enrich our solutions for customers and
provide attractive development opportunities for the Kaycan and
Saint-Gobain teams."
Lionel Dubrofsky, President of Kaycan, commented:
"Today marks the beginning of an exciting new chapter of
Kaycan's history. Ever since my family founded Kaycan in 1974, our
team has been laser-focused on providing the best customer service
possible throughout Canada and the United States, all while pushing
the boundaries of imagination and innovation to expand our product
portfolio over the past decades. Now we have the opportunity to
join Saint-Gobain, a renowned leader in light and sustainable
construction. We are filled with gratitude for our team's hard work
over the past 48 years, and we're thrilled to see what comes next
for our combined companies."
Analyst/Investor Conference Call on May 31, 2022 at 6:30 p.m.
Paris time (GMT + 1)
Dial-in: + 33 1 72 72 74 03 or +44 20 7194 3759 (code
35834573#)
Please dial in 5 to 10 minutes prior to the scheduled start
time.
Replay: +33 1 70 71 01 60 or +44 20 3364 5147 (code 425021791#)
from 09:00 p.m. Paris time until June 30, 2022.
A presentation will be available before the conference call on
Saint-Gobain's website at:
https://www.saint-gobain.com/en/finance/financial-events
ABOUT SAINT-GOBAIN
Worldwide leader in light and sustainable construction,
Saint-Gobain designs, manufactures
and distributes materials and services for the construction and
industrial markets. Its integrated solutions for the renovation of
public and private buildings, light construction and the
decarbonization
of construction and industry are developed through a continuous
innovation process and provide sustainability and performance. The
Group's commitment is guided by its purpose,
"MAKING THE WORLD A BETTER HOME".
EUR44.2 billion in sales in 2021
166,000 employees, locations in 75 countries
Committed to achieving Carbon Neutrality by 2050
For more information about Saint-Gobain,
visit www.saint-gobain.com and follow us on Twitter
@saintgobain
[1] 2021-2022E = fiscal year starting August 1(st) , 2021 and
ending July 31(st) , 2022
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
ACQABMLTMTJJBMT
(END) Dow Jones Newswires
June 01, 2022 02:00 ET (06:00 GMT)
Compagnie De Saint-gobain (LSE:COD)
Historical Stock Chart
From Oct 2024 to Nov 2024
Compagnie De Saint-gobain (LSE:COD)
Historical Stock Chart
From Nov 2023 to Nov 2024
