CRH on Monday said it has agreed to buy Barrette Outdoor Living, an Ohio-based maker of residential fencing and railing, for an enterprise value of $1.9 billion.
CRH is buying Barrette from TorQuest Partners and Caisse de depot et placement du Quebec. It is paying $1.85 billion in cash, plus taking on $40 million in capitalised lease liabilities.
Barrette, which will be added to CRH’s Architectural Products business, reported $79 million in pretax profit in the financial year that ended January 1. CRH said the price it is paying represent a multiple of 10 times earnings before interest, tax, depreciation and amortisation.
Dublin-based CRH noted the acquisition follows the recent divestment of its Building Envelope business and represents a reallocation of capital.
‘Our Architectural Products business has been one of our fastest growing businesses in recent years, and the acquisition of Barrette complements and enhances our existing offering of sustainable outdoor living solutions in North America’ said CRH Chief Executive Albert Manifold.
CRH shares were up 2.2% early Monday, outperforming the wider FTSE 100 index.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 1.0% at 7,611.02
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Hang Seng: up 1.6% at 21,415.94
Nikkei 225: closed up 0.6% at 27,915.89
S&P/ASX 200: closed down 0.5% at 7,206.30
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DJIA: closed down 1.1% at 32,899.70
S&P 500: closed down 1.6% at 4,108.54
Nasdaq Composite: closed down 2.5% at 12,012.73
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EUR: firm at $1.0723 ($1.0719)
GBP: up at $1.2515 ($1.2489)
USD: down at JP¥130.65 (JP¥130.82)
GOLD: up at $1,853.60 per ounce ($1,851.30)
OIL (Brent): down at $120.60 a barrel ($121.29)
(changes since New York equities close on Friday)
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ECONOMICS AND GENERAL
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Monday’s key economic events still to come
Whit Monday. Financial markets closed in Germany and Switzerland; open in France.
Ireland June Bank Holiday
0900 BST UK SMMT vehicle registration figures
1000 EDT US employment trends index
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Service sector companies in China increased prices in May, as cost pressures continued to remain high and backlogs of work grow, due to disruption from the lockdowns imposed by Beijing to combat the spread of Covid-19. The Caixin general services purchasing managers’ index rose to 41.4 points in May from 36.2 in April, a reading that had marked a 26-month low. However, the PMI score remained well below the neutral 50-point mark, indicating that activity continued to shrink last month. Total new business fell for the fourth month in a row, Caixin Insight Group reported. Although it remained ‘sharp’ overall, the rate of reduction in business activity ‘eased’ from April’s 26-month record. The Caixin China general composite PMI rose to 42.2 points in May from 37.2 in the previous month. The composite PMI is a blend of the service and manufacturing scores. Last week, the manufacturing PMI was reported at 48.1 points in May, up from 46 in April.
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BROKER RATING CHANGES
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Citigroup cuts Aveva to ’sell’ (neutral) - price target 2,000 (2,150) pence
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Barclays raises John Wood Group to ’overweight’ (equal weight) - price target 340 (330) pence
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Barclays cuts EnQuest Energy to ’underweight’ (equal weight) - price target 23 (40) pence
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COMPANIES - FTSE 100
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Melrose Industries has agreed to sell its Ergotron business to funds managed by Sterling Group for a total of $650 million. Completion of the sale is expected to occur in the third quarter of 2022 and is conditional upon customary US antitrust approvals. On or before completion, Melrose will announce how it intends to use the net proceeds, it said. Ergoton is a manufacturer of ergonomic products such as computer mounts, stand-up desks, and mobile carts. Melrose said having sold the Nortek Air Management and Nortek Control businesses last year, Ergotron is the last of the businesses remaining from the Nortek acquisition in 2016. On completion, Melrose will have more than doubled shareholders’ initial investment, industrial turnaround specialist noted. Chief Executive Officer Simon Peckham said: ‘The sale of Ergotron is the final step in our Nortek ownership cycle, capping what has been a very successful acquisition for Melrose shareholders. We will have more than doubled shareholders’ equity investment in Nortek and have transformed the businesses themselves. Our attention now remains firmly on achieving the same result for the current group.’
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GSK said the US Food & Drug Administration has approved its Priorix treatment for active immunisation for the prevention of measles, mumps and rubella in individuals 12 months of age and older. Priorix is currently licenced in more than 100 countries worldwide, including all European countries, Canada, Australia and New Zealand, with more than 800 million doses distributed to date. ‘We’re proud to make Priorix available in the US for the first time, adding a choice for providers to help protect patients against these highly contagious diseases and to further strengthen offerings in our paediatric vaccine portfolio,’ said Judy Stewart, head of US Vaccines for GSK.
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COMPANIES - FTSE 250
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Wizz Air carried 4.1 million passengers last month, well above the pandemic-reduced total of 840,445 a year before. Load factor in May was 84.2%, up from 66.1% in May 2021. In the rolling 12-month period to May, the Budapest-based budget airline carried 33.5 million passengers with a 80.3% load factor, up from 11.4 million at 63.8% a year ago.
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COMPANIES - SMALL CAP
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M&C Saatchi, an advertising agency that is the object of takeover tussle, has removed Non-Executive Director Vin Murria from its board with immediate effect. M&C Saatchi said on Monday that, in light of the offers for the London-based company by each of AdvancedAdvT - of which Murria is the executive chair - and Next Fifteen Communications, it is ‘not appropriate’ for Murria to be proposed for re-election as a director at its annual general meeting on June 30. In May, Next Fifteen Communications announced it has reached a cash-and-shares offer agreement with independent directors of M&C Saatchi to buy the firm, amid a four-month-long takeover attempt of M&C by AdvancedAdvT.
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Bosses at mattress seller Eve Sleep are hunting for a new owner to take the company private, as it warned that it will miss revenue targets this year. The business said it needs new funding to push into the ‘wider sleep wellness space’. It is looking for a new owner, or a major new investor, the board said. ‘Having delivered a third consecutive year of growth in revenues and marketing contribution in our core UK & Ireland business in 2021, and cognisant of current trading conditions, the board now wishes to accelerate Eve’s push into the wider sleep wellness space,’ it said in a statement to shareholders on Monday. ‘In order to deliver our objective of creating the first digital sleep wellness retailer, the board considers that Eve would benefit from additional investment.’ Bosses said they were in talks with a US investor that was interested – at least for a while – in making a bid to take the company private. But discussions later lapsed, and the investor is no longer interested.
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Monday’s shareholder meetings
Alphawave IP Group PLC - AGM
Minoan Group PLC - AGM
Omega Diagnostics Group PLC - AGM
Sensyne Health PLC - GM re strategic financing
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