Saint-Gobain enters into definitive agreement to acquire FOSROC
FOSROC is a global construction chemicals player with a strong geographic footprint in India, the Middle East and Asia-Pacific
Construction chemical specialist FOSROC is to be acquired by Saint-Gobain for approximately US $1.025bn in cash. According to a statement from Saint-Gobain, the two firms have entered into a definitive agreement; the deal will strengthen Saint-Gobain’s worldwide presence in the construction chemicals segment.
Following the acquisitions of Chryso in 2021, GCP in 2022 and 33 additional acquisitions since 2021, this move is a new strategic step in establishing Saint-Gobain’s worldwide presence in construction chemicals, which will have combined sales of $6.63bn across 73 countries following the acquisition (pro forma), said the statement.
According to the statement, FOSROC is a global construction chemicals player with a strong geographic footprint in India, the Middle East and Asia-Pacific in particular. The company is expected to generate $487mn of sales and to achieve an EBITDA margin of 18.7% in 2024E. With 20 manufacturing plants and around 3,000 employees, FOSROC provides a wide range of technical solutions for the construction industry, including admixtures and additives for concrete and cement, adhesives and sealants, waterproofing solutions, concrete repair solutions and flooring.
The purchase price represents an acquisition multiple (before synergies) of approximately 11.3x FOSROC’s 2024E EBITDA of $91mn, and a multiple of approximately 7.1x when including run-rate synergies of approximately $54mn in year three, the statement explained.
“The acquisition of FOSROC is perfectly aligned with our ‘Grow & Impact’ strategic plan: it is a unique opportunity for Saint-Gobain to further reinforce its worldwide presence in construction chemicals, and to strengthen its presence in high-growth emerging markets, in particular in India and the Middle East. I am very impressed with FOSROC’s leadership, its strategy and its impressive development, as well as the team’s track record of excellent execution and profitable growth. The combination of the two groups will allow us to expand our profitable growth platform in construction chemicals. I am looking forward to warmly welcoming the FOSROC teams into the Group and I am very confident about the combination of our joint forces,” explained Benoit Bazin, Chairman and Chief Executive Officer of Saint-Gobain.
This acquisition will be fully financed in cash. The group will maintain a strong balance sheet with net debt/EBITDA remaining at the low end of the target range (1.5x to 2.0x), including the recently announced Bailey and CSR Limited acquisitions. Closing of the transaction is subject to customary conditions and is expected in first-half 2025, the statement noted.
The move is billed as a unique opportunity that is fully aligned with Saint-Gobain’s strategy to strengthen its worldwide presence in construction chemicals, supported by solid macroeconomic factors including the transition towards low-carbon concrete. It will complement the group’s worldwide growth platform in construction chemicals.
The statement also noted that FOSROC boasts a highly complementary geographic profile that will strengthen Saint-Gobain’s presence in high-growth emerging markets, notably India and the Middle East. FOSROC’s positions in the Middle East and Asia are also said to perfectly complement Chryso’s positions mostly in Europe, Turkey and Africa and GCP’s in North America, Latin America and Asia-Pacific. FOSROC is a leading player in India, one of the most attractive countries in construction chemicals worldwide, with growth supported by an ambitious infrastructure plan for the coming decades.
The integration will be led by Thierry Bernard, Chief Executive Officer of Construction Chemicals, with the experienced team who developed the Chryso business over many years, managed its integration within Saint-Gobain, and who has piloted its successful combination with GCP since 2022, providing a high level of confidence in the integration of FOSROC. It will be consolidated into the High Performance Solutions segment, the statement outlined.
Jim Hay, Chairman of FOSROC added, “Today marks the beginning of an exciting new chapter in the history of FOSROC. Our focus on delivering the best solutions and satisfaction to our customers has enabled us to become a leading player in construction chemicals. I want to thank all our teams for their outstanding work over many years.”
“The opportunity to join Saint-Gobain, worldwide leader in light and sustainable construction and a global player in construction chemicals is the perfect next step to enhance our offer by leveraging Saint-Gobain’s innovation and technology in construction chemicals. I look forward to continuing our growth journey within Saint-Gobain,” concluded Rob Bonnici, Chief Executive Officer of FOSROC.
