CRH in €324m spending spree

BUILDING materials group CRH yesterday announced details of its 22 acquisitions totalling €324 million in the second half of 2003. The group employs over 30 people who work full-time on identifying businesses to add to the CRH stable.

CRH has spent €214m on 11 projects in Europe since July. It also added a further six companies to its materials division in America, at a cost of €53m, as well as writing cheques totalling €57m for five businesses that are now part of its American products and distribution division.

This followed a flurry of activity earlier in the year, when the group made the biggest acquisition in its history by paying €693m for Dutch cement group Cementbouw and another €189 million on SE Johnson, a materials business in the midwestern United States. CRH spent a total of €1.6bn on acquisitions last year.

“We look for well-managed businesses, especially market leaders in their geographic area,” said Myles Lee, CRH’s finance director. Mr Lee said the group had no particular preference between Europe and the US when studying possible acquisitions but that it tended to avoid buying distressed businesses that needed to be turned around.

He added that CRH attached great importance to the quality of management teams in its acquired businesses and that it preferred to leave existing teams in place when they joined the CRH group.

CRH remains capable of making big acquisitions. Mr Lee said the group could comfortably deal with two acquisitions of the scale of the Cementbouw deal each year and that it had consistently spent over €1bn on new businesses every year since 1999.

The group will remain selective in choosing companies to buy and CRH is not afraid to walk away from deals where the price is too high, according to Mr Lee.

Looking forward to 2004, Mr Lee said the group would continue its programme of acquisitions but added there was little scope for any further buys in Britain or Ireland.