SYDNEY--(BUSINESS WIRE)--James Hardie Industries plc (ASX:JHX), the number one global fiber cement siding manufacturer, today announced that it has entered into a definitive agreement to acquire German-based XI (DL) Holdings GmbH and its subsidiaries (including, but not limited to, Fermacell GmbH) from Xella International S.A. in an all-cash transaction valued at €473 million (approximately US$549 million). The acquisition is expected to close in the fourth quarter of James Hardie’s 2018 fiscal year and is subject to customary closing conditions.
Fermacell is Europe’s number one fiber gypsum board manufacturer, with more than 70 percent share of the category, and also produces cement-bonded boards. This highly complementary acquisition provides James Hardie with a robust growth platform for expanding its fiber cement business into the large and affluent European market. Similar to James Hardie, Fermacell is the leader of a premium, differentiated product category, and has strong brand recognition, deep customer relationships, broad distribution and a pull-through, technical sales force. These qualities have enabled Fermacell to grow sales at above market indexes, as well as deliver strong returns and cash flow.
Louis Gries, Chief Executive Officer of James Hardie, commented, “Fermacell’s market position, go-to-market strategy and strong management team will enable us to scale and accelerate our European business, which has long been a strategic goal. Fermacell will diversify our geographic, product and end-market portfolio, complementing our strong positions in North America and Australasia, and will create significant growth opportunities and drive long-term value for customers, employees and shareholders.”
Dr. Jack Truong, President, International Operations of James Hardie, said, “Fermacell is a high-quality business that, in its structure and values, is compatible with James Hardie. Its focus on technical expertise and relationships with builders, installers and architects to create end-user demand for its products is an excellent fit for our Company. Fermacell’s broad European footprint and capabilities provide the right enabling platform to accelerate our fiber cement business growth in Europe. We are also excited about the future growth opportunities of Fermacell’s core business in regions such as the UK, France, and Scandinavia.”
James Hardie expects the transaction to be accretive in the second full fiscal year following the close. In the first full fiscal year following the close, James Hardie expects the transaction to be accretive excluding transaction, integration and other one-time costs. Fermacell will account for approximately 15 percent of total global revenue of the combined business. James Hardie intends to fund the acquisition with debt financing.
James Hardie will conduct a management briefing on its 2nd Quarter FY18 results and the Fermacell acquisition on Thursday 9 November 2017 at 10:00am AEDT.
Advisors
HSBC is acting as sole financial advisor, as well as providing committed debt financing for the acquisition on a sole basis, and DLA Piper is acting as legal advisor to James Hardie.
About James Hardie Industries plc
James Hardie Industries plc is a world leader in the manufacture of fiber cement siding and backerboard. Our products are used in a number of markets, including new residential construction (single and multi-family housing), manufactured housing, repair and remodeling and a variety of commercial and industrial applications. We manufacture numerous types of fiber cement products with a variety of patterned profiles and surface finishes for a range of applications, including external siding and trim and soffit lining, internal linings, facades and floor and tile underlay. Our current primary geographic markets include the United States of America, Canada, Australia, New Zealand, the Philippines and Europe. James Hardie Industries plc is a “public limited company,” incorporated and existing under the laws of Ireland.
