Manufacturing News

Boral cements its acquisition of US building products maker

Boral has entered into a binding agreement to acquire US building products maker Headwaters.

The US$2.6 billion deal is subject to shareholder approval and regulatory approval, and is expected to complete in mid-2017.

Based in Utah, Headwaters is a leading manufacturer of building products and one of the largest marketers of fly ash in the USA, with US$1.1 billion of revenue and Adjusted EBITDA of US$218 million.

Headwaters operates across two core divisions: Building Products and Construction Materials, with two-thirds of Headwaters’ revenues of around US$700 million derived from its Building Products division.

It designs, manufactures and distributes nationally a comprehensive range of architectural manufactured stone, specialty roofing, and siding and trimboard across commercial, new residential and repair & remodelling.

Headwaters is also one of the leading suppliers of windows in South Central regions of the USA and concrete and specialty block in Texas. Headwaters’ Construction Materials division, delivers around US$370 million of revenue a year and is one of the largest marketers of fly ash in the United States.

Fly ash is most commonly used as a partial replacement for cement in producing concrete, and is forecast to experience strong growth driven by growing cement consumption in ready mix concrete and the competitive cost position of fly ash relative to cement.

The Acquisition of Headwaters is a transformative step for Boral as it significantly increases Boral’s exposure to large addressable US markets, at an attractive point in the cycle including improved market diversification across non-residential, repair & remodel and infrastructure segments, in addition to the new residential sector, a company press release noted.

This acquisition also adds significant scale to Boral’s US footprint by adding a portfolio of complementary businesses with improved geographic reach and ability to compete across the USA.

Combined, the new Boral USA is now a US$1.8 billion revenue business, with an expanded product offering, a strong manufacturing and distribution footprint, and significantly grows Boral’s fly ash business, expands its light building products offering, and doubles the size of Boral’s roofing and manufactured stone positions.

Mike Kane, Boral’s CEO & Managing Director, said: “While the acquisition of Headwaters significantly transforms Boral USA, it is also highly transformative for Boral as a Group. We can now be confident in Boral’s position as a global building products and construction materials group with three very strong divisions.”

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