TIDMCOD
RNS Number : 4556C
Compagnie de Saint-Gobain
12 June 2023
SAINT-GOBAIN SIGNS A DEFINITIVE AGREEMENT TO ACQUIRE
BUILDING PRODUCTS OF CANADA CORP.
Saint-Gobain announces that it has entered into a definitive
agreement for the acquisition of Building Products of Canada Corp.
("Building Products of Canada"), a privately owned manufacturer of
residential roofing shingles and wood fiber insulation panels in
Canada, for C$1,325 million (approximately EUR925 million) in
cash.
With this acquisition, Saint-Gobain takes a logical step to
reinforce its leadership in light and sustainable construction in
the Canadian market. With Building Products of Canada, Saint-Gobain
will be well positioned to better serve Canadian customers, to whom
it will bring a broader innovative and sustainable range of
solutions.
-- Building Products of Canada completes the offer of
Saint-Gobain on Exterior Solutions in Canada with Roofing,
following the addition of Siding thanks to the Kaycan acquisition
in 2022;
-- The acquisition complements the existing CertainTeed Canada
operations, already leader in Interior Solutions (gypsum,
insulation, ceilings).
The purchase price represents a multiple (before synergies) of
approximately 11.9x Building Products of Canada's 2022 EBITDA of
C$111 million and an acquisition multiple of approximately 8.2x
when including run-rate synergies of approximately C$50
million.
The acquisition meets the Group's strategic and financial
criteria articulated in the "Grow & Impact" plan:
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 with a limited impact of
+0.1x on net debt to EBITDA and with leverage remaining below the
target set (1.5x to 2.0x).
Closing of the transaction is subject to customary conditions
and expected by year-end 2023.
STRATEGIC BENEFITS
Building Products of Canada is a leading roofing and exterior
building products player in Canada with three manufacturing plants
servicing the full country (Montreal, Edmonton, Pont-Rouge) and 460
employees. It has a leading position in asphalt shingle roofing in
Canada and offers a comprehensive range of exterior building
products including wood fiber insulation panels and acoustic
panels. It sells through more than 1,200 points-of-sale across home
center retailers and specialty distribution channels.
Leveraging its highly efficient country-based organization,
Saint-Gobain will add C$435 million to its leadership in Canada,
where it has already around C$1.4 billion of sales, primarily
gypsum, insulation, ceilings and siding, including its recent
acquisitions of Kaycan and GCP in 2022. It will allow Saint-Gobain
to enhance the scope of the light and sustainable construction
solutions offered with roofing products, for the benefit of its
Canadian customers. In addition, Saint-Gobain's innovation
capability will allow Building Products of Canada to develop a
broader, more innovative, and more sustainable range of products
for its customers.
VALUE CREATION & SYNERGIES
A value-creative transaction for Saint-Gobain's shareholders.
This acquisition will create value by year 3 following closing of
the transaction and will be EPS (Earnings Per Share) accretive from
year 1. It will provide an enhanced proposition for our customers
thanks to a full-range offer:
1) Leverage our innovation for unique full-range solutions :
bring CertainTeed building integrated photovoltaic (BIPV)
Solstice(R) shingles to the Canadian market, enrich the Building
Products of Canada offer with our ClimateFlex(R) all-weather
technology, our industry-leading reflective shingle Solaris(R) ,
our widest range of Landmark(R) premium products, and our
best-in-class Roof System that utilizes all CertainTeed's roofing
components including GCP underlayment;
2) Drive sustainability in building materials: leverage
CertainTeed circular economy know-how and recycle Building Products
of Canada shingle waste leveraging CertainTeed's partnership with
Asphaltica, for recycling asphalt shingle used in roofing.
Significant synergy opportunities are estimated at c. C$50
million by year 3 following the closing of the transaction. This
includes cost synergies of c. C$40 million which are expected to be
captured through the combination of Building Products of Canada's
materials procurement with that of Saint-Gobain, the implementation
of Saint-Gobain's World Class Manufacturing program leveraging best
practices from its industry leading position across its 17 US
roofing plants, optimization of freight and logistics costs across
North America, as well as SG&A cost optimization. Sales
synergies of c. C$10 million are expected thanks to cross-selling
opportunities with Kaycan (leveraging the full exterior solutions
offering) and using Building Products of Canada channels to sell
other Saint-Gobain product categories and expand their product
range in roofing (with Landmark(R) shingles, GCP Ice & Water
Shield(R) waterproofing membranes).
Benoit Bazin, Chief Executive Officer of Saint-Gobain,
commented:
"I am very pleased to announce the acquisition of Building
Products of Canada and I look forward to soon welcoming into our
Group the Building Products of Canada teams, who over the years
have built a very attractive, highly respected and renowned
position in Canada. This is an important and logical step for
Saint-Gobain, allowing us to establish a leading position in
roofing in Canada, completing our offering for the building
envelope which we have reinforced with the recent Kaycan and GCP
acquisitions. It completes our offering of solutions for light and
sustainable construction in Canada as we have done successfully in
the United States. The acquisition is perfectly aligned with our
"Grow & Impact" strategy, reinforces our position in North
America and builds on our many proven successes in this region over
the last four years. It will create significant value for
shareholders, enhance the profitable growth outlook of the Group,
enrich our solutions to better serve our customers and provide
attractive development opportunities for both the Building Products
of Canada and Saint-Gobain teams."
Yves Gosselin, President & Chief Executive Officer of
Building Products of Canada, commented:
"Today marks the beginning of an exciting new chapter in the
history of Building Products of Canada. Our focus on delivering the
best solutions and satisfaction to our customers has enabled us to
become a leading player in roofing in Canada. The opportunity to
join Saint-Gobain, the worldwide leader in light and sustainable
construction, and which is investing significantly in Canada, is
the perfect next step to further enrich our offer by leveraging
Saint-Gobain's innovation and technology: I want to thank all our
teams for their outstanding work over many years, and I look
forward to leading the integration of Building Products of Canada
into Saint-Gobain and continuing to drive profitable growth."
RBC Capital Markets, LLC is acting as financial advisor, and
Cleary Gottlieb Steen & Hamilton LLP and Blake, Cassels &
Graydon LLP are acting as legal counsel to Saint-Gobain in
connection with the transaction. Deloitte Corporate Finance Inc. is
acting as financial advisor and McCarthy Tétrault LLP is acting as
legal advisor for Building Products of Canada.
Analyst/Investor Conference Call on June 12, 2023 at 6:30 pm
Paris time (GMT + 1)
Dial-in: +33 1 70 91 87 04 or +44 12 1281 8004 or +1 718 705
8796
Please dial in 5 to 10 minutes prior to the scheduled start
time.
Replay: +39 02 802 0987 then press 700724# and 724# from 9:00 pm
Paris time until July 12, 2023.
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".
EUR51.2 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 Twitter
@saintgobain
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END
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