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CRH to Buy Arcosa in Building Materials Firm’s Biggest Deal
Dallas-Based Arcosa Provides Infrastructure Materials, Energy Equipment
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Key Takeaways:
- CRH agreed June 22 to acquire U.S.-based Arcosa for $8.5 billion in cash, offering $150 per share in a record deal.
- The acquisition underscores CRH’s U.S. expansion strategy, valuing Arcosa at a premium and adding a growing infrastructure and energy equipment business.
- The deal, backed by JPMorgan and Morgan Stanley, continues CRH’s history of acquisitions following its move to shift its primary listing to New York.
CRH Plc agreed to acquire U.S. construction services company Arcosa for $8.5 billion in what is a record deal for the Irish building materials provider.
CRH will pay $150 a share for Arcosa in the all-cash deal, the company said in a statement June 22. That’s a roughly 10% premium to Arcosa’s closing price last week.
Dallas-based Arcosa provides infrastructure materials as well as energy equipment in the U.S. It reported net income of $37.8 million for the quarter ending on March 31, a 60% year-over-year increase.
Arcosa shares closed at $135.84 on June 18, giving the company a market value of $6.7 billion. June 19 was a holiday in the U.S.
Dublin-based CRH, which has a market capitalization of about $74 billion, moved its primary listing to New York from London two years ago, partly to make it easier to strike deals in the U.S.
The company has a history of acquisitions. In 2015, it paid 6.5 billion euros ($7.4 billion) to buy assets that Holcim AG and Lafarge SA had to sell ahead of their merger to create the world’s biggest cement company.
In the Arcosa deal, JPMorgan Chase & Co. and Morgan Stanley advised CRH and are providing bridge financing. Arcosa worked with Evercore Inc. and Goldman Sachs Group Inc. The law firm Kirkland & Ellis advised CRH, while Gibson Dunn and Baker Botts served as Arcosa’s legal advisers.
CRH Americas ranks No. 4 on the Transport Topics list of top building materials carriers.
