CRH sees interest in potential sale of European distribution arm
By Padraic Halpin
DUBLIN (Reuters) - Irish building materials group CRH has had a lot of interest in its European distribution arm ahead of a decision in the next two to three months on whether to trigger a sale, Chief Executive Albert Manifold said on Thursday.
Dublin-based CRH put the entire unit under review last year and Reuters reported on April 12 that CRH had hired Bank of America to launch the sale of the unit in a deal valuing the unit at about 2 billion euros (£1.7 billion) including debt.
The sale process is expected to begin next month and has already drawn interest from buyout funds including Advent, Lone Star and CVC, sources familiar with the matter said.
"We've had a lot of people (interested)... It's an area that there has been a lot of interest in, the distribution space. Private equity have been involved in this space for a decade," Manifold told a news conference following the company's annual shareholder meeting.
Manifold refused to comment on Bank of America's role in the process and said any sale hinged on what price the "improving" unit could fetch now versus its increased value if CRH hung onto it.
The sources said CRH was closely monitoring a similar sale by rival Saint Gobain and was waiting for the auction to enter its final stages before putting its own distribution business on the block as it would appeal to the same bidders.
Saint Gobain's sale is expected to wrap up next month.
CRH reported a 7 percent rise in first-quarter sales in a trading update on Wednesday, driven by its Europe Materials division where the largest buyer of cement in the world was able to increase prices in all of its markets.
Manifold said on Thursday that this was the first time in 15 years that CRH was able to increase cement prices across Europe.
Having flagged to investors that it was facing challenges in Britain due to ongoing Brexit-related uncertainty, Manifold said CRH had noticed a particular delay so far this year in getting commitments for large government-funded infrastructure projects.
"It's not just one project, it's a whole range of projects. There seems to be a reluctance to commit funding to large infrastructure projects from the treasury to the county councils and here we are at the end of April," he said.
"They should have started by now."
(Reporting by Padraic Halpin; editing by Jason Neely and Emelia Sithole-Matarise)
