SAINT-GOBAIN signs a definitive
agreement
TO ACQUIRE CSR LIMITED, establishing a leading position
in light AND sustainable construction in australia
Saint-Gobain today announces that it
has entered into a definitive agreement with CSR Limited ("CSR") to
acquire all of the outstanding shares of CSR by way of an
Australian scheme of arrangement for A$9.00 per share, in cash,
corresponding to an enterprise value of A$4.5 billion (c. €2.7bn) and a net
enterprise value of A$3.2bn (c.
€1.9bn) post short to mid-term monetizable property value of
at least A$1.3bn.
CSR
is a leading building products company in Australia for residential
and non-residential construction with A$2.7bn in total revenue, 30 manufacturing plants and
around 2,500 employees. CSR is a
unique opportunity for Saint-Gobain to establish a leading presence
in the attractive Australian construction market. This
acquisition, which is fully aligned with the Group's vision
as the worldwide leader in light and sustainable construction,
is a decisive step to strengthen
its presence in the fast-growing markets of
Asia-Pacific.
CSR consists principally of
Building Products (A$2.0bn
sales and 17.7% EBITDA
margin, consensus expected in fiscal year ending March-2024)
with Australia's most trusted and iconic brands that fit extremely well with
Saint-Gobain's worldwide offer on light and sustainable
construction. In addition, CSR holds a Property portfolio which is
planned to be monetized in the short to mid-term for a value of at
least A$1.3bn, and an indirect minority participation (~25%) in an
Aluminium business, on which Saint-Gobain will explore its options
going forward.
The agreed upon price represents a
premium of 33% above the
volume-weighted average price per share for the 1-month
trading ended on the undisturbed date of February 20, 2024,
and a multiple (before synergies) of 10.7x analyst consensus EBITDA for CSR for fiscal year ending
March-2024 of A$422
million. Taking into account the short to mid-term
monetizable value of the property business, it represents a
multiple of 7.9x on Building Products consensus EBITDA for fiscal
year ending March-2024 of A$406 million including A$60 million year
3 run-rate synergies.
The business combination has been
unanimously approved by the
Board of Directors of Saint-Gobain. The Board of Directors of CSR has unanimously
recommended that its shareholders vote in favor of the
transaction.
Closing of the transaction is
subject to, among other things, CSR's shareholders' approval,
necessary regulatory approvals and satisfaction of other customary
closing conditions, with closing expected in the second half of
2024.
This acquisition will be fully
financed in cash and is aligned with Saint-Gobain's financial
criteria:
·
Value creation by
year 3 following the closing of the
transaction and EPS (Earnings Per Share) accretive from year
1.
·
Maintaining a
strong balance sheet and solid
credit rating with a limited impact of ~0.3x net debt /
EBITDA.
A
COMPELLING STRATEGIC RATIONALE
·
A decisive step
into the very attractive high-growth construction
market in Australia with strong fundamentals, supported by
solid macroeconomic factors including a growing population
underpinned by immigration and increasing needs for light and
sustainable construction solutions.
·
A comprehensive
range of products and solutions for the construction
market with leading brands in interior and exterior
solutions. CSR has a compelling customer offering thanks to an
extensive footprint across Australia with close proximity to its
more than 12,000 customers, best-in-class logistics through 120
hubs and outstanding commercial and technical teams.
·
A business
operating model similar to Saint-Gobain, offering integrated solutions delivering sustainability and
performance across multiple product lines through a
customer-centric organization. CSR's ongoing transformation program
("OneCSR") launched in 2020 is well-aligned with Saint-Gobain's
strategy to drive further profitable growth.
·
A strong and
consistent financial performance: strong sales growth of 8% per annum over 2021-2024E for the
Building Products business (more than 6% over the last 10 years)
with over-proportional EBITDA growth of 12%.
·
A$60 million
expected synergies in year 3 following transaction close, of which A$50 million are cost
synergies coming from operational excellence (Saint-Gobain
best practice sharing on manufacturing, energy savings and
sustainability, supply chain), delisting costs and purchasing, and
at least A$10 million of
growth synergies coming
from cross-selling opportunities on additional products with
significant upside, such as: Saint-Gobain's full-range of
construction chemicals leveraging GCP's existing presence in
Australia, high-performance glazing and other products that CSR
does not currently offer. Saint-Gobain will also bring its
expertise in process decarbonization, low-carbon offer and other
innovative new solutions to the benefit of Australian
customers.
A
WELL-ESTABLISHED RELATIONSHIP THAT WILL FACILITATE A SMOOTH
INTEGRATION
·
The partnership
between CSR and Saint-Gobain,
initially based on its glass wool technology license, has deepened since 2019.
·
Similar culture
and shared values bode very well for successful
integration, that will also benefit from the mutual respect
nurtured over recent years.
·
Since
Saint-Gobain is managed by country, CSR will be easily integrated
as one entity representing the Group
businesses in Australia and New Zealand within the Asia-Pacific
Region. The Group intends to rely on the current strong CSR management team, which Saint-Gobain
knows well, and is delivering strong and consistent
results.
Benoit Bazin, Chief Executive Officer of Saint-Gobain,
commented:
"I
am delighted to announce the acquisition of CSR that represents a
decisive step for Saint-Gobain to establish a leading presence in
the high-growth Australian construction market. It is fully aligned
with our "Grow & Impact" strategy and our vision for worldwide
leadership in light and sustainable construction. We have admired
CSR for many years and have successfully worked together as
partners. I am very impressed with CSR's leadership, the quality of
the strategy, and the team's excellent execution of that strategy.
The combination of our joint forces is a fantastic opportunity:
Saint-Gobain will bring significant value to CSR by leveraging our
expertise on the various core segments of CSR's operations for the
benefit of its customers. I look forward to soon welcoming into our
Group all CSR employees, and to continuing the success story in
Australia and New Zealand. I am very confident that this
transaction will result in enhanced growth and value creation for
Saint-Gobain shareholders and provide attractive opportunities for
both teams."
Analyst/Investor Conference Call on February 26, 2024 at 8:00
a.m. Paris time (GMT+1)
Dial-in: +44 121 281 8004 or
+1 718 705 8796 or +33 1 70 91 87 04
Please dial in 5 to 10 minutes prior
to the scheduled start time
Replay: +39 02 802 0987 then press
700724# and 724# from 11:00 a.m. Paris time until March 26,
2024.
A
presentation regarding the transaction will be available before the
conference call on
Saint-Gobain's website at:
https://www.saint-gobain.com/en/finance/financial-events
CSR
press release:
www.csr.com.au/
Barclays (in partnership with
Barrenjoey for Australia) and Lazard are acting as financial
advisors and Corrs Chambers Westgarth is acting as legal counsel to
Saint-Gobain in connection with the transaction.
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".
€51.2 billion in sales in
2022
168,000 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 X @saintgobain
Analyst/investor
relations
|
Press
relations
|
Vivien
Dardel:
|
+33 1
88 54 29 77
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Patricia
Marie:
|
+33 1
88 54 26 83
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Floriana
Michalowska:
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+33 1
88 54 19 09
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Laure
Bencheikh:
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+33 1
88 54 26 38
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Alix
Sicaud:
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In
Australia
Erica Borgelt
+ 61 413 732 951
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James
Weston:
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...
Important disclaimer - forward-looking
statements:
This document contains
forward-looking statements with respect to the financial condition,
results, business, strategy, plans and outlook of Saint-Gobain, CSR
Limited. ("CSR") and the combined company that will result from the
completion of the pending acquisition of CSR by Saint-Gobain (the
"Transaction") and the agreement providing for the Transaction (the
"Scheme of Arrangement"). Forward-looking statements are generally
identified by the use of the words "expect", "anticipate",
"believe", "intend", "estimate", "plan" and similar expressions.
Although Saint-Gobain believes that the expectations reflected in
such forward-looking statements are based on reasonable assumptions
as at the time of publishing this document, investors are cautioned
that these statements are not guarantees of future performance,
results or occurrences. Actual performance, results and occurrences
may differ materially from the forward-looking statements as a
result of a number of known and unknown risks, uncertainties and
other factors, many of which are difficult to predict and are
generally beyond the control of Saint-Gobain, including but not
limited to the risks described in the "Risk Factors" section of
Saint-Gobain's Universal Registration Document and the main risks
and uncertainties presented in the half-year 2023 financial report,
both documents being available on its website (www.saint-gobain.com)
and the following factors: the occurrence of any event, change or
other circumstances that could give rise to the termination of the
Scheme of Arrangement; the inability to complete the Transaction
due to the failure of CSR to obtain stockholder approval for the
Transaction or the failure to satisfy other conditions to
completion of the Transaction; ; the effect of the announcement of
the Transaction on our or CSR's relationships with customers,
operating results and business generally; the risk that the
Transaction will not be consummated in a timely manner; the
inability of the combined company to realize synergies, to retain
employees and to successfully integrate following the Transaction;
and the risks of adverse developments relating to CSR, its business
or operations as more fully disclosed in CSR's filings with the
Australian Securities Exchange (and available at
(www.asx.com),
including in the risk factors described in CSR's last annual and
half-year reports. Accordingly, readers of this document are
cautioned against relying on these forward-looking statements.
These forward-looking statements are made as of the date of this
document. Saint-Gobain disclaims any intention or obligation to
complete, update or revise these forward-looking statements,
whether as a result of new information, future events or otherwise.
This document does not constitute any offer to purchase or
exchange, nor any solicitation of an offer to sell or exchange
securities of Saint-Gobain or CSR.