CRH spends €250m on 18 buys

The building materials group CRH yesterday announced it spent €250m on 18 acquisitions and investment initiatives over the first half of the year, although there was a marked slowdown in activity over May and June.

The acquisitions were split between a €155m outlay in Europe and €89m in the Americas.

The company announced in an IMS update at the beginning of May that it had forked out €230m in acquisitions over the first four months of 2012, which means there was less than €20m spent on deals over May and June.

“The update is consistent with CRH’s strategy of focusing on bolt-on deals with average transaction value of less than €15m,” says Goodbody Stockbroker analyst Robert Eason. “However, the total spent may prove a bit disappointing as it implies limited activity in May and June.”

However, Mr Eason is not changing his full-year forecast for bolt-on acquisitions reaching €500m.

A CRH spokesman said there was no particular reason for the slowdown over May and June. “The nature of dealmaking means that the pipeline is never evenly spread.”

Chief executive Myles Lee said: “The bolt-on transactions completed in the first half of 2012 reflect our continuing strategy of completing acquisitions which fill out our regional and product level positions, enhance vertical integration, and bolster our strong long-term permitted reserves positions. The transactions announced today bring total development spend over the past 12 months to approximately €0.7bn.”

CRH made one investment in its European materials business and three acquisitions in its products activities which add annualised sales of €166m. The company made 13 trans-actions in its Americas business, of which 10 were in materials and three in products.

CRH has roughly €1bn at its disposal for future acquisitions. The company has a twin strategy of consolidating its position in Europe and the Americas, and carving out new opportunities in Asia.