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Nov 11 2021, 08:00 GMT
Building Materials
Sika to acquire MBCC for CHF5.5bn
- Sectors : Building Materials
- Companies : Buzzi Unicem | Holcim | Heidelberg Materials | CRH | Saint-Gobain Group
Ratings
Ratings and price correct at time of issue
| Company | Rating | Date | Previous Rating | Date | Closing Price |
|---|---|---|---|---|---|
| Buzzi Unicem | OUTPERFORM | 04/04/16 | Neutral | 05/08/15 | 2056c |
| CRH | OUTPERFORM | 23/05/12 | Neutral | 12/01/12 | 5075c |
| Heidelberg Materials | NEUTRAL | 04/02/20 | Outperform | 16/06/17 | 6544c |
| Holcim | OUTPERFORM | 20/04/20 | Neutral | 09/01/19 | 4753chf |
| Saint-Gobain Group | OUTPERFORM | 29/01/21 | Neutral | 02/11/20 | 5982c |
DAVY VIEW
Thirteen months after closing the acquisition of the BASF construction chemicals business for €3.17bn, Lone Star has sold it on to Sika for €5.2bn. That is a nice turn for Lone Star and big outlay for Sika. It will stretch the group financially and may fuel concerns that it is diluting itself by buying a lower quality business. However, it does tick a number of strategic boxes (close-fit, sustainability strategy) and Sika will be trusted to deliver on synergies and rapid debt reduction. The deal multiple (11.5x EBITDA, 8.5x post synergies) looks attractive, especially in the context of Sika’s own EV/EBITDA multiple of c.27x.
