CRH - Sells Europe Distribution division for €1.64bn

Davy Research
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CRH is to divest its Europe Distribution business to Blackstone for c.€1.64bn. The news should be well received given the clean sale and the attractive price being achieved. At €1.64bn, the group is realising an exit multiple in excess of 16x EBIT with the proceeds reducing net debt/EBITDA to c.1.7x by year-end (current Davy estimate is 2x). The sale is entirely consistent with the CEO’s aim to deliver structurally higher returns by re-shaping the business for higher growth and maximising shareholder value through the efficient use of capital. The disposal proceeds will likely be used to further fund accretive bolt-on acquisitions and to extend the group’s share buyback programme.