CRH agrees to sell part of US business for €3.4bn

CRH's envelope business includes CRH’s architectural glass, storefront systems, architectural glazing systems and related hardware interests.

CRH chief executive Albert Manifold.

CRH is set to sell part of its North American business for $3.8bn (€3.4bn).

The Irish building materials giant — the largest player in North America — has reached an agreement to sell its so-called building envelope business to US private equity firm KPS Capital Partners in a predominantly cash deal.

The envelope business includes CRH’s architectural glass, storefront systems, architectural glazing systems and related hardware interests and is primarily focused on the North American market. 

The business division generated earnings of $337m last year. CRH had undertaken a comprehensive review of the business before agreeing to sell.

Capital resources

CRH said the deal — which is subject to regulatory approval — ties in with its ongoing policy of portfolio management. The money from the sale will be used to strengthen CRH’s capital resources and fund ongoing cash returns to shareholders and further acquisitions.

CRH’s main growth avenue in the US is through large infrastructure contracts. After posting a strong set of first-half results last August, the group said it had a strong pipeline of potential acquisitions.

CRH is expected to post strong full-year results when it reports for 2021 on Thursday, with analysts anticipating near double-digit organic profit and earnings growth, strong cash generation and multi-year low debt.

“That financial strength should support further acquisitions and cash returns to shareholders in 2022,” said Davy analyst Robert Gardiner.