CSR has announced this morning that it has agreed to buy Boral’s 40 per cent stake in their joint venture, the east coast brick and paver business trading as PGH Bricks & Pavers.
In a statement to the ASX, CSR said the acquisition was for $126.4 million, with loan repayments to Boral worth $7.5 million.
The merger was completed in May 2015, and as of November 1 this week, CSR Group will see 100 per cent net profits after tax for the PGH Bricks business.
The JV had seen strong earnings growth, and increased volumes and margins over the time, said CSR managing director Rob Sindel.
“We have worked very well with Boral over the last 18 months to integrate our two businesses,” said Sindel.
“By taking full ownership, we will benefit from new opportunities to drive operational efficiency as well as accelerate future property development projects.
“CSR will have flexibility to invest in the PGH brick manufacturing network to enable consolidation to more efficient operating sites, where our customers will have greater access to CSR’s brands, digital expertise and innovation.
The venture includes 12 manufacturing operations and capacity of 600 million bricks annually.
Boral is expected to make approximately $20 million to $25 million after tax from the sale.