Today’s value in Saint-Gobain in Paris gets Keikan for $ 928 million-June 1, 2022 10:46 am

(AOF) – Since 2019, this is the third major acquisition of Saint-Gobain in North America (+ 0.13% to € 55.17). After Continental Building Products and GCP Applied Technologies, the French building materials giant has signed a formal agreement to acquire Kaycan, a family-owned company that manufactures and sells outdoor building materials in Canada and the United States. The transaction amount is US $ 928 million in cash, or about 860 million euros.

“This acquisition not only strengthens our presence in the Canadian and US siding markets, but also expands our offering to the promising and growing segment of façade cladding for aluminum and processed wood, primarily made from recycled materials. Benoit Bazin, CEO of Coralvan, commented:

Founded in 1974, Kaycan needs to achieve US $ 472 million in sales and $ 83 million in Ebitda for the 2021-202 fiscal year (ending at the end of July). The group has 12 production plants (including 9 in Canada) and approximately 1,300 employees.

After the transaction, Saint-Gobain will sell Keikan’s small distribution business in the United States. The latter represents sales of approximately US $ 70 million from resale of Kaycan products to third parties and approximately $ 10 million for Ebitda.

Prior to the synergies, the acquisition price is approximately 11.2 times Keikan’s estimated 2021 to 2022 EBITDA. After considering the synergistic effect, the multiple is about 8.

“Synergistic opportunities are important and are estimated at around US $ 30 million in the three years after the transaction closes,” says Saint-Gobain.

Transactions subject to normal approval may be completed by the end of 2022.

Following this acquisition, JP Morgan will display overweight recommendations and a target price of € 90 on Saint-Gobain shares. As part of that, Stiffel confirmed the recommendation to keep and the target price of € 62 for the stock.

AOF-Details

Key Point

-1665 Founded in 1665, the world leader in housing materials.

-Sales of € 44.2 billion, divided into five branches: Northern Europe 34%, Southern Europe and Africa (including France) 32%, Americas 13% and High Performance 15%.

-54% of activities target remodeling and infrastructure (52%), ahead of new housing (22%) or industry (10%), mobility (7%), and other industries.

-Business model based on the brand’s complete portfolio and solution-based approach: Increased productivity of construction professionals, end-user well-being, customized performance and innovation for industrial customers.

-Split capital (8.3% employees), Pierre Andre de Charender, 14 board chairs, and Benoit Bazin as general manager.

-A solid balance sheet with net liabilities maintained at € 7.3 billion (35% of equity) and a net cash flow of € 2.9 billion.

Task

-Launched October 2021 “Grow & Impact” Strategic Plan: Offering an integrated and differentiated solution for decarbonization of growth / construction / industrial investment better than the market around € 1.5 billion.

-Three principles, expectations for standards, digital integration in production and customer travel, and innovation strategies with sustainable growth: Built by 20 platforms shared by industrial and construction customer businesses: smart materials, robotization , Weight reduction of materials, reduction of carbon footprint in manufacturing process … / Customer experience where 90% of sales are covered by PIM, “Digital pricing” to accelerate sales / In-house, “Digital journey” open program, Partnerships with Datala, NOVA-led start-ups… / External, Partnership Centers with Research, EAGLE, WOOL2LOOP or Optivind… Participation in projects, and co-development with customers.

-Environmental strategy integrated into product delivery, 72% of the portfolio contributes to the reduction of CO2 emissions, aiming for complete neutrality by 2050, 2030 target: industry in the range of 1 billion euros 2017 Research on circulating economy / solid oxygen fuel cells that reduces CO2 emissions by 33% and avoids R & D investment / extraction of raw materials compared to.

-After a € 2 billion acquisition and a number of dispositions in 2021, a group located in the high-growth sector, especially construction chemicals, emerged.

-The integration of Chryso and Rockwool India and the completion of the bid to acquire GPC Applied Technologies.

Task

-Circular characteristics of activity, 4/5

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Sales made in the construction sector.

-The effects of raw material and energy inflation were offset by the ability to accept higher selling prices (10.3% at 4).

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2021 quarter);

-The total cost of repairing the Genfell Tower in London, where a local subsidiary provided covers and insulation foam, is unknown.

-After achieving record financial performance in -2021, in 2022, we aimed for sales growth beyond the market, industrial investment of € 1.8 billion, and further growth in operating profit.

-2021 dividend 1.63 euros, stock repurchase 400 million euros.

Integration in construction chemistry

Construction chemistry makes it possible to decarbonize cement and concrete carbon dioxide emissions by dividing them into three or four. Therefore, Saint-Gobain chose to develop in this business. The global market for this business is estimated at 60-70 billion euros. It led two major acquisitions in this area in 2021 and competed with world leader Sika. After buying France’s Chryso (formerly Materis’s concrete and cement additive) for € 1 billion, the world leader in building materials bought an American listed on NASDAQ’s GCP Applied Technologies for € 2 billion. For Swiss Seeka, we acquired the MBCC Group with a corporate value of € 5.2 billion. The latter is much larger than GCP and has sales of € 2.7 billion, while the new acquisition of Saint-Gobain in the United States is € 1 billion.

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