Boral exits from global brick operations
Sale of Meridian Brick business
The US-based clay brick joint venture - with private equity firm Lone Star Funds - has been sold to Wienerberger
Thu Jan 14 2021
Boral, together with its joint-venture partner, an affiliate of private equity firm Lone Star Funds, have agreed to sell the North American-based Meridian Brick business to Austrian brick maker, Wienerberger for USD250 million.
This equates to USD125 million for Boral's 50% share and is expected to result in a small pre-tax accounting profit on a sale of approximately AUD10 million at closing. The transaction is subject to various closing conditions and regulatory approvals, with both parties targeting completion in the first half of 2021.
The divestment of Meridian Brick represents the final step in Boral's exit from brick operations globally. It is also part of the plan by Boral's chief executive officer and managing director, Zlatko Todorcevski to overhaul the building materials supplier. He said in a statement:
In recent years Boral have divested their interest in bricks in Australia, and since forming the bricks joint venture in the US with Lone Star in 2016, the plan was to ultimately prepare the business for sale.
As part of this process, Meridian's leadership was refreshed with the appointment of a new chief executive officer in December 2018, and a stronger focus on improving performance.
The divestment of Meridian is a further step in Boral's portfolio review works. It helps to streamline our US business and allows us to further focus on the improvement initiatives under way in the remaining businesses in Boral North America.
Based in the southern state of Georgia, Meridian Brick is the largest manufacturer of clay facade solutions by capacity in the US and has a leading position in Canada. With more than 1,000 employees operating in 20 manufacturing plants across the US and Canada, the company generated revenues in excess of USD400 million in the financial year to 30 June 2020.
Through the acquisition of Meridian Brick, Wienerberger will immediately double the revenue of their North America business to more than USD800 million.
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