Saint-Gobain Announced Acquisition of GCP Applied Technologies for $32/Share in Cash

Author: Charles Gross | December 06, 2021 06:04am
Saint-Gobain and GCP Applied Technologies announce that they have entered into a definitive agreement pursuant to which Saint-Gobain will acquire all of the outstanding shares of GCP for $32.00 per share, in cash, in a transaction valued at approximately $2.3bn (approximately €2.0bn). This acquisition is a decisive step in establishing Saint-Gobain's leading position worldwide in construction chemicals with total sales of more than €4bn (up from €3bn), and furthers the Group's strategy as worldwide leader in light and sustainable construction. The agreed upon price represents a multiple (before synergies) of approximately 13.2x GCP's 2022E adjusted EBITDA of $170 million and a multiple of 8.8x EBITDA post run-rate synergies of $85 million, and a premium of 39% above the volume-weighted average price per GCP share for the 30-trading days ended on the undisturbed date of November 30, 2021. This acquisition meets the Group's strategic and financial criteria articulated during the Capital Markets Day of October 6, 2021: 1) Strengthening leadership positions notably in North America and Asia as well as offering enrichment in light and sustainable construction 2) Value creation by year 3 following the closing of the transaction and EPS (Earnings Per Share) accretive from year 1 (+4% before synergies) 3) Maintaining a strong balance sheet and solid credit rating with a limited impact of +0.3x net debt to EBITDA The business combination has been unanimously approved by the Boards of Directors of Saint-Gobain and GCP Applied Technologies. Saint-Gobain has obtained undertakings from Starboard and Standard Investments (formerly known as 40North)/Standard Industries to vote their respective stakes of 8.9% and 24.2% in favor of the transaction. Closing of the transaction is subject to GCP shareholders' approval, antitrust approvals and satisfaction of other customary closing conditions; it is expected to close by year-end 2022. Lazard and Citi are acting as financial advisors, and Freshfields Bruckhaus Deringer LLP is acting as legal counsel to Saint-Gobain in connection with the transaction

Posted In: GCP