TIDMCOD
RNS Number : 6457U
Compagnie de Saint-Gobain
06 December 2021
PRESS RELEASE
December 6, 2021
SAINT-GOBAIN MAKES A DECISIVE STEP TO ESTABLISH A LEADING
POSITION WORLDWIDE IN CONSTRUCTION CHEMICALS BY SIGNING A
DEFINITIVE AGREEMENT TO ACQUIRE GCP APPLIED TECHNOLOGIES
Saint-Gobain and GCP Applied Technologies announce that they
have entered into a definitive agreement pursuant to which
Saint-Gobain will acquire all of the outstanding shares of GCP for
$32.00 per share, in cash, in a transaction valued at approximately
$2.3bn (approximately EUR2.0bn). This acquisition is a decisive
step in establishing Saint-Gobain's leading position worldwide in
construction chemicals with total sales of more than EUR4bn (up
from EUR3bn), and furthers the Group's strategy as worldwide leader
in light and sustainable construction.
The agreed upon price represents a multiple (before synergies)
of approximately 13.2x GCP's 2022E adjusted EBITDA of $170 million
and a multiple of 8.8x EBITDA post run-rate synergies of $85
million, and a premium of 39% above the volume-weighted average
price per GCP share for the 30-trading days ended on the
undisturbed date of November 30, 2021. This acquisition meets the
Group's strategic and financial criteria articulated during the
Capital Markets Day of October 6, 2021:
1) Strengthening leadership positions notably in North America
and Asia as well as offering enrichment in light and sustainable
construction
2) Value creation by year 3 following the closing of the
transaction and EPS (Earnings Per Share) accretive from year 1 (+4%
before synergies)
3) Maintaining a strong balance sheet and solid credit rating
with a limited impact of +0.3x net debt to EBITDA
The business combination has been unanimously approved by the
Boards of Directors of Saint-Gobain and GCP Applied Technologies.
Saint-Gobain has obtained undertakings from Starboard and Standard
Investments (formerly known as 40North)/Standard Industries to vote
their respective stakes of 8.9% and 24.2% in favor of the
transaction.
Closing of the transaction is subject to GCP shareholders'
approval, antitrust approvals and satisfaction of other customary
closing conditions; it is expected to close by year-end 2022.
Strategic Benefits
GCP Applied Technologies is a major global player in specialty
construction chemicals with approximately $1.0bn revenues, 50
manufacturing plants in 38 countries and employs around 1,800
people. It brings a global platform with established success in
cement additives, concrete admixtures, infrastructure and
commercial and residential waterproofing. GCP is a unique
opportunity for Saint-Gobain to establish a leading worldwide
presence in the growing construction chemicals sector, delivering
both sustainability and performance for customers. The combined
platform of Weber, Chryso and GCP offers customers a highly
comprehensive portfolio of construction chemicals solutions with
strong complementary geographic footprints.
-- After the successful acquisition of Chryso, GCP is the
logical next step to expand Saint-Gobain's presence in admixtures
and additives, which provide key solutions to de-carbonize the
construction industry. The combined companies are present in all
main geographies and benefit from two highly complementary
footprints, with Chryso's strong positions mostly in Europe, Middle
East and Africa and GCP's in North America, Asia-Pacific and Latin
America. The combination will also enlarge Saint-Gobain's customer
reach in admixtures and additives with 75 production sites and a
doubling of its manufacturing footprint to 38 countries.
-- The acquisition of GCP enriches the CertainTeed portfolio in
North America in the residential as well as the commercial sectors,
in addition to its strong presence in infrastructure . It enhances
its ability to provide a wider customer base with innovative
solutions and develop roofing and façade systems. GCP's recognized
high-end innovative solutions will complement the CertainTeed
portfolio with their leading presence in roofing underlayment (Ice
& Water Shield (R) ) as well as in waterproofing (Preprufe (R)
, Bituthene (R) ). It will offer multiple cross-selling
opportunities, improving performance for customers and accelerating
growth.
Operational Improvement Plan
-- Saint-Gobain has the levers to significantly improve GCP's
performance . GCP is in the process of implementing a turnaround
plan to improve growth and margins: many initiatives have been put
in place including a refreshed leadership team, customer experience
improvement and an ongoing cost rationalization plan (e.g. the
relocation of headquarters), which are expected to deliver run-rate
cost savings of c. $20 million. Saint-Gobain has well-identified
levers to significantly accelerate the improvement in performance,
such as its experienced and stable management with deep expertise,
its ability to attract and retain talent, robust sales processes
targeting an enriched value proposition, scale to accelerate
innovation in order to better serve customers and develop
value-added offerings, solid and detailed cost synergies with
CertainTeed and Chryso (including on raw materials purchasing and
vertical integration of polymers production) as well as various
cross-selling opportunities.
Integration within Saint-Gobain
-- The specialty building materials business in North America
(c. $250 million of sales) will be integrated into the CertainTeed
business serving local customers in the Americas Region. All other
businesses, consisting of mainly concrete admixtures and cement
additives (c. $750 million of sales) will be combined with the
Chryso business and be part of the High Performance Solutions
segment.
Value Creation & Synergies
-- A value-creative transaction for Saint-Gobain's shareholders
with significant synergies. This acquisition will create value by
year 3 following the closing of the transaction. S aint-Gobain will
finance the acquisition through cash on its balance sheet.
Significant synergy opportunities are estimated at c. $85 million
by year 5, including cost synergies of c. $72 million which are
expected to be captured through the elimination of GCP's public
company costs, pruning of SG&A, economies of scale in
procurement, and manufacturing and logistics cost optimization.
Saint-Gobain expects to benefit from at least $13 million EBITDA
impact from top-line synergies thanks to an enlarged commercial
platform to the benefit of its customers and cross-selling
opportunities in multiple geographies.
Simon Bates, President and Chief Executive Officer of GCP,
commented:
"Today opens an exciting new era in GCP's rich history, for our
shareholders, customers and employees. We are thrilled for GCP to
join Saint-Gobain, the ideal strategic partner to support our
growth. Thanks to its global platform, significant resources as
well as commercial and innovation expertise, Saint-Gobain is
perfectly
positioned to ensure the success of GCP's operations and people over the long term."
Peter Feld, Independent Chair of the Board of GCP, added:
"The Board of GCP is unanimously supportive of this transaction
and believes it provides full and fair value to all shareholders of
GCP. Saint-Gobain represents a great partner for GCP and we are
pleased to have reached this agreement. The Board would like to
thank our leadership team and our dedicated employees for their
significant contributions to GCP. These efforts have allowed us to
achieve this great result."
Benoit Bazin, Chief Executive Officer of Saint-Gobain,
commented:
"The acquisition of GCP is an excellent and significant step for
Saint-Gobain to further reinforce its worldwide leadership in
construction chemicals and strengthen its geographic presence in
North America and emerging markets, both objectives being at the
core of our "Grow & Impact" strategic plan. We are very happy
and truly excited to welcome into Saint-Gobain the GCP teams, with
whom we share the same industrial and commercial culture. Given
GCP's leadership in its sector with well-recognized brands,
expertise, know-how and businesses that are highly complementary
with Chryso and CertainTeed, we are convinced that this great
combination will create a very strong platform, with improved
reach, value added solutions and services delivered to our
customers. Leveraging Saint-Gobain's scale and innovation
capabilities, with GCP's attractive geographic footprint, this
transaction will result in enhanced profitable growth and value
creation for our shareholders and will provide attractive
development opportunities for both teams around the world."
Lazard and Citi are acting as financial advisors, and
Freshfields Bruckhaus Deringer LLP is acting as legal counsel to
Saint-Gobain in connection with the transaction.
Analyst/Investor Conference Call on December 6, 2021 at 8:00
a.m. Paris time (GMT + 1)
Dial-in: + 33 1 72 72 74 03 or +44 20 7194 3759 (code
99461838#)
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 425016453#)
from 10:30 a.m. Paris time until January 31, 2022.
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
ABOUT SAINT-GOBAIN
Saint-Gobain designs, manufactures and distributes materials and
solutions for the construction, mobility, healthcare and other
industrial application markets. Developed through a continuous
innovation process, they can be found everywhere in our living
places and daily life, providing wellbeing, performance and safety,
while addressing the challenges of sustainable construction,
resource efficiency and the fight against climate change. This
strategy of responsible growth is guided by the Saint-Gobain
purpose, "MAKING THE WORLD A BETTER HOME", which responds to the
shared ambition of all the women and men in the Group to act every
day to make the world a more beautiful and sustainable place to
live in.
EUR38.1 billion in sales in 2020
More than 167,000 employees, located in 72 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
Analyst/Investor relations Press relations
+33 1 88 54 +33 1 88 54
29 77 26 83
+33 1 88 54 Patricia Marie +33 1 88 54
Vivien Dardel 19 09 Bénédicte 14 75
Floriana Michalowska +33 1 88 54 Debusschere +33 1 88 54
Christelle Gannage 15 49 Susanne Trabitzsch 27 96
----------------------- -------------- --------------------- --------------
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, GCP Applied Technologies Inc. ("GCP") and
the combined company that will result from the completion of the
pending acquisition of GCP by Saint-Gobain (the "Merger"), the
agreement providing for the Merger (the "Merger Agreement"), and
the Merger transaction. 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 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 Merger Agreement; the inability
to complete the Merger due to the failure of GCP to obtain
stockholder approval for the Merger or the failure to satisfy other
conditions to completion of the Merger; risks related to disruption
of GCP's and our management's attention to ongoing business
operations due to the Merger; the effect of the announcement of the
Merger on our or GCP's relationships with customers, operating
results and business generally; the risk that the Merger will not
be consummated in a timely manner; the risk that, in order to
obtain regulatory clearances, there are material adverse remedies
imposed on the combined company by regulatory authorities,
including conduct remedies and divestitures; the inability of the
combined company to realize synergies, to retain employees and to
successfully integrate following the Merger; and the risks of
adverse developments relating to GCP, its business or operations as
more fully disclosed in GCP's filings with the US Securities and
Exchange Commission (and available at www.sec.gov ), including in
the risk factors in GCP's last annual report on Form 10-K.
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
GCP.
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
ACQTFBFTMTBMMPB
(END) Dow Jones Newswires
December 06, 2021 01:59 ET (06:59 GMT)
Compagnie De Saint-gobain (LSE:COD)
Historical Stock Chart
From Jun 2024 to Jul 2024
Compagnie De Saint-gobain (LSE:COD)
Historical Stock Chart
From Jul 2023 to Jul 2024