CRH plc, the international building materials group, has reached an agreement to purchase C.R. Laurence Co. Inc. (‘CRL’) from the Friese family, for a total consideration of US$1.3 billion, including deferred consideration at a net present cost of US$86 million (payable over five years).
The business will be acquired debt free and completion of the purchase is anticipated for early this month (September 2015). CRH will finance the transaction using existing financial resources.
CRL, headquartered in Los Angeles, is described as North America’s leading manufacturer and distributor of custom hardware and installation products for the professional glazing industry including architectural railings, all-glass entrance hardware, storefront hardware, exit devices, commercial doors, custom cladding, balanced doors and frameless shower door hardware.
With more than 1,600 employees at 42 locations, CRL serves all of the US and Canada and is said to be ‘gaining a footprint’ in Western Europe and Australia.
The company generated PBT of US$51 million and had gross assets of US$290 million at the end of 2014. CRH’s Oldcastle BuildingEnvelope (OBE) business is described as the leading supplier of fully integrated building envelope products (architectural glass, aluminium glazing systems) to the commercial glazing industry in North America and with a large customer base of professional glaziers and glass shops, broad product offering, product development expertise and strong customer focus, CRL is described as an ‘exceptional strategic fit’ with OBE.
Forecast CRL sales for 2015 are circa US$570 million, on which EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) of circa US$115 million is expected. This excludes annual synergies of US$40 million, which are expected to be generated by 2017 from the combination with OBE.
CRL’s senior management team will continue to lead the business, reporting directly to the chief executive of OBE as part of CRH’s Americas Products Division, to ensure a smooth integration into CRH.
Commenting on these developments, Albert Manifold, CRH chief executive, said:
“CRL is a business with strong growth characteristics and an excellent operational fit with our BuildingEnvelope business in the United States and represents an exciting opportunity for CRH. In addition to increasing our exposure to the growing non-residential and residential construction markets in the United States, CRL’s strong brand, focus on innovation and growing presence in Europe and Australia, combined with CRH’s international reach, provide the potential for this high-growth business to become a global leader.”
In a statement, regarding the acquisition, Lloyd Talbert, CRL President, described CRL as ‘a true American success story’ and said Don Friese will remain as CEO of CRL, which will be independently managed and operated as a subsidiary of OBE.