The partners have submitted a non-binding offer to acquire 100% of the ordinary shares of Adbri, formerly Adelaide Brighton, for AUS $3.20 per share. Adbri recently announced that its 2023 underlying EBITDA is expected to be AUS $310 - AUS $315 million.
Under the proposal, CRH would partner with Barro, an Australian family-owned business and approximately 43% shareholder of Adbri. CRH currently has a 4.6% interest in the company via a cash-settled derivative and would acquire about 57% of Adbri's shares not owned by Barro to delist Adbri from the ASX. The partners' proposal is non-binding and subject to satisfactory completion of due diligence, entry into binding transaction documentation, Adbri shareholder approval through a scheme of arrangement and customary legal requirements, including relevant regulatory approvals.
As separately announced by Adbri, the Adbri IBC has agreed to provide CRH exclusive due diligence access to progress the proposal and intends to recommend that Adbri shareholders vote in favour of the proposed transaction, subject to entering into a binding scheme implementation deed and other customary conditions.
The agreed cash consideration of AUS $3.20 per share values Adbri at an equity valuation of AUS $2.1 billion (US$1.4 billion) on a 100% basis and values the approximately 53% of issued share capital that the Partners do not currently have an interest in and which CRH has agreed to acquire at AUS $1.1 billion (US$0.75 billion).
Albert Manifold, Chief Executive of CRH, said: "We are very pleased to announce this potential acquisition of Adbri in partnership with the Barro family. We have held a long-term interest in the Australian construction materials market, which has attractive attributes, including stable market dynamics and positive growth prospects, similar in nature to the Southern United States and Central and Eastern Europe, where we have a significant presence.
"Adbri is an attractive business with quality assets that complement our core competencies in cement, concrete and aggregates. With its leading market positions in Australia, we are delighted that this opportunity has presented itself to us. It is the next logical step for CRH to expand our existing presence in Australia, where we have been operating for 15 years. This acquisition would strongly complement our existing Australian business, creating additional opportunities for growth and development.
"We look forward to working with the Barro family over the coming years to enhance the long-term performance of the business, leveraging our scale, industry knowledge and technical expertise to improve long-term growth and operating performance and drive value to achieve the true potential of the business."
