Heidelberg Materials

Agrees to divest its US West business for $2.3bn

  • Sectors : Building Materials
  • Companies : Heidelberg Materials

Ratings and price correct at time of issue.

  • Heidelberg Materials

    Closing Price: 7350c

  • RATING 04/02/20

  • PREVIOUS RATING 16/06/17

    OUTPERFORM

DAVY VIEW

HeidelbergCement (HEI) has agreed to sell its US West business to Martin Marietta for US$2.3bn. The deal was previously flagged in media reports but should be well received given the price achieved (c.3x sales, c.15x EBITDA). The sale does not include the group’s Permanente plant, which – located close to Cupertino – represents valuable real estate in the middle of Silicon Valley. While HEI has referenced using proceeds to increase bolt-ons and capacity elsewhere in North America, the expectation is that the sale will prompt a meaningful share buyback upon completion.

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May 24 2021, 08:35 IST/BST

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