CVC achieves partial-exit via CHI sale

CVC Capital Partners is to sell part of Cementbouw Handel & Industrie, the Dutch building products group, to CRH plc in a deal worth E646m.

CVC Capital Partners, the European private equity house, has sold three units of its Cementbouw Handel & Industrie portfolio company to CRH in one of the largest exits to a trade buyer in 2003.

 

The Irish industrial building materials group has agreed to pay a total cash consideration of E646m for the distribution and building products operations of Cementbouw. The acquisition is the largest ever made by CRH, Europe’s third largest company in the sector in Europe.

 

Cementbouw Handel & Industrie is one of the biggest manufacturers, wholesalers and retail operators in the Netherlands. The business also operates 54 DIY stores under the Gamma and Karwei brands. Its headquarters are in Cruquius in the Netherlands. Cementbouw’s combined distribution and building products operations reported operating profit (EBITA) of E73m on sales of E790m in 2002. The net assets being acquired are estimated to amount to approximately E354m, with goodwill estimated at E292m.

 

In 2001, CVC led the management buyout of Cementbouw Handel & Industrie from NBM Amstelland, paying a total of E862m. “The acquisition of the DIY, wholesale and manufacturing divisions of Cementbouw represents an excellent strategic fit for CRH plc, and an appropriate conclusion to CVC’s involvement in the larger Cementbouw group,” said CVC chairman Michael Smith.

 

In addition, CVC and CRH are backing management in the buyout of the remaining three units of Cementbouw. CVC and CRH are each investing E47m for a 45 per cent stake in the remaining businesses, which are engaged in the trade and transportation of cement, sand, gravel, minerals and ready-mixed cement. The business will have an enterprise value of E330m, with debt financing for the joint venture being underwritten by CIBC World Markets, ABN AMRO Bank and ING Bank.

 

This  newly formed joint venture company will be equally owned between CRH plc and the original Cementbouw shareholders – with each holding a 45 per cent stake in the company, and the new joint venture management team holding the remaining ten per cent stake. Jan Redeker, currently CEO of Cementbouw will assume the position of CEO of the joint venture management team, together with the current CFO, Ronald van der Mark.