Building materials giant CRH has bought a major European rival for €170 million. The Irish company announced yesterday that it has bought Halfen Deha Group, a European producer of metal construction materials. Barry O'Halloran reports.
CRH said that it paid €170 million. The price included the Halfen Deha debts that it acquired and €100 million in intangible assets, largely goodwill.
Halfen has been in business since 1929 and supplies metal components to infrastructure and non-residential building projects. In 2005 it had profits before tax and write-offs of €22 million on the back of €190 million in sales.
The German group employs 1,300 people in 16 countries and operates from six sites in northern Europe and Asia.
The deal ties in with CRH's latest acquisition, Texan-based building materials distributor MMI, which it bought last week for €280 million. According to the group's statement, MMI is one of Halfen's main distributors in the US.
MMI is also focused on non-residential and civil engineering projects and derives more than 70 per cent of its $721 million sales from these sectors.
The MMI business is recovering from the twin blows of the technology downturn and the terrorist attacks on the World Trade Centre in New York in September 2001. Highway contract awards rose by 23 per cent in March.
CRH chief executive Liam O'Mahony said yesterday that the Halfen deal would be a good fit with its existing construction accessories business, giving the group "combined sales of over €330 million" in that sector alone and boosting its distribution network.
News of the deal had no impact on the share price yesterday. Analysts said it was "not huge in the overall scheme of things but nicely complemented last week's MMI purchase".
CRH is involved in an ongoing row with the majority shareholders of Catalan cement group Uniland.
It claims that the Irish company breached Uniland's articles when it bought a 26 per cent shareholding in the family-owned group last year.
These articles require any shareholder selling their stake to give first refusal to the other shareholders.
Holders of the remaining 74 per cent were originally going to challenge the purchase in court but have since hired US bank Lazards and asked it to find a buyer for the stake. CRH is excluded from that process unless it rescinds the purchase of its holding.
