Saint-Gobain’s acquisition of FOSROC will expand global market reach

Following the acquisition of Chryso in 2021, GCP in 2022 and 33 additional acquisitions since 2021, this move represents a new strategic step in strengthening Saint-Gobain’s position in the global construction chemicals market. Post-acquisition, the company’s combined sales will be €6.2 billion in 73 countries (pro forma).

Saint-Gobain acquires FOSROC to strengthen its global presence in construction chemicals. FOSROC, with strong positions in India, the Middle East and Asia Pacific, is expected to generate sales of $487 million and an EBITDA margin of 18.7% in 2024. The acquisition is in line with Saint-Gobain’s strategic growth in high-growth emerging markets.

FOSROC is a global player in the construction chemicals industry with a strong geographic presence in India, the Middle East and Asia Pacific. The company is expected to generate $487 million in sales and achieve an EBITDA margin of 18.7% in 2024. With 20 manufacturing plants and approximately 3,000 employees, FOSROC offers a wide range of engineered solutions to the construction industry, including concrete and cement admixtures and additives, adhesives and sealants, waterproofing solutions, concrete repair solutions and flooring solutions.

The purchase price represents an acquisition multiple (before synergies) of approximately 11.3x FOSROC’s FY2024 EBITDA of $91 million and a multiple of approximately 7.1x after synergies of approximately $54 million in Year 3.

This acquisition will be funded entirely in cash. The Group will maintain a strong balance sheet and net debt/EBITDA will remain at the lower end of the target range (1.5x to 2.0x), including the recently announced acquisitions of Bailey and CSR Limited. Closing of the transaction is subject to customary conditions and is expected in the first half of 2025.

A compelling strategic case

A unique opportunity, fully aligned with Saint-Gobain’s strategy to strengthen its global presence in construction chemicals, supported by solid macroeconomic factors, including the transition to low-carbon concrete. It will complement the Group’s global growth platform in construction chemicals.
Highly complementary geographic profile strengthening Saint-Gobain’s presence in fast-growing emerging markets, particularly in India and the Middle East. FOSROC’s positions in the Middle East and Asia complement Chryso’s positions, mainly in Europe, Turkey and Africa, as well as GCP’s in North America, Latin America and the Asia-Pacific region. FOSROC is a leading player in India, one of the world’s most attractive countries for construction chemicals, whose growth is supported by an ambitious infrastructure plan for the coming decades.
A comprehensive range of solutions with a recognized brand and strong technical competence. FOSROC’s capabilities are supported by a trusted brand and recognized technical knowledge, entrepreneurial spirit and high level of service.
Strong history of highly profitable growth and significant outperformance of underlying markets. FOSROC has a strong history of growth with sales growth of around 11% per annum (2021-2024E). The company delivers a higher EBITDA margin of over 18% thanks to a highly experienced management team with a proven track record of success.
An acquisition with creative value for Saint-Gobain shareholders and customers, with strong synergy potential. Expected synergies of $54 million in year 3 post-closing, of which $39 million are cost synergies, to be achieved through economies of scale in purchasing (including raw materials and vertical integration of polymer production), space optimization, SG&A savings, and optimization of manufacturing and logistics costs. Saint-Gobain expects to realize at least $15 million of growth synergies through cross-selling opportunities, combining the Group’s innovation capabilities with Fosroc’s strength in infrastructure and through customer relationships. These synergies will be achieved across Saint-Gobain’s global construction chemicals platform and will leverage Saint-Gobain’s existing strong presence in the broader lightweight and sustainable construction sector in India and the Middle East. The acquisition will create value by year 3 post-closing and be EPS accretive from year 1.

The integration will be led by Thierry Bernard, CEO of Construction Chemicals, with an experienced team that has developed the Chryso business for many years, managed its integration within Saint-Gobain and piloted its successful combination with GCP since 2022, ensuring a high level of confidence in the integration of FOSROC. It will be consolidated in the High Performance Solutions segment.

Benoit Bazin, Chairman and CEO of Saint-Gobain, commented:

“The acquisition of FOSROC is perfectly aligned with our strategic plan for Grow & Impact: it is a unique opportunity for Saint-Gobain to further strengthen its global presence in construction chemicals and to strengthen its presence in fast-growing emerging markets, in particular in India and the Middle East. I am very impressed by FOSROC’s leadership, strategy and impressive development, as well as the team’s track record of excellent execution and profitable growth. The combination of the two groups will allow us to expand our profitable growth platform in construction chemicals. I look forward to warmly welcoming the FOSROC teams to the Group and I am very confident in combining our strengths.”

Jim Hay, President of FOSROC, commented:

“Today marks the beginning of an exciting new chapter in FOSROC’s history. Our focus on delivering the best solutions and customer satisfaction has enabled us to become a leading player in the construction chemicals industry. I want to thank all of our teams for their outstanding work over many years.”

Rob Bonnici, CEO of FOSROCadded:

“The opportunity to join Saint-Gobain, a world leader in lightweight and sustainable construction and a global player in construction chemicals, is the perfect next step to expand our offering by leveraging Saint-Gobain’s innovations and technology in construction chemicals. I look forward to continuing our growth journey at Saint-Gobain.”

Note: The content of this press release has not been edited by the Fibre2Fashion team.

Fibre2Fashion Press Office (HU)