from SAINT-GOBAIN (EPA:SGO)
Saint-Gobain signs a definitive agreement to acquire the Bailey Group Companies to complement its offer for light construction in Canada
April 3, 2024
Saint-Gobain announces that it has entered into a definitive agreement for the acquisition of
The Bailey Group Companies (“Bailey”) – consisting of Bailey-Hunt Limited and its subsidiaries – a privately owned manufacturer of metal building solutions for light construction in Canada, for C$880 million (approximately €600 million) in cash.
Bailey is a leading player in metal framing in Canada with C$532 million of sales in the country and 17.2% EBITDA margin in 2023. With a 75-year history, Bailey has 12 manufacturing plants across Canada and around 700 employees with a well-recognized brand thanks to its bestin-class customer service, expertise and technical capabilities. Bailey has been a long-standing partner of Saint-Gobain for metal ceiling grids, frames and fasteners.
In many countries, metal framing is already an important part of Saint-Gobain’s solution offer for light construction, since it is commonly used for interior solutions (hand-in-hand with plasterboard, insulation and ceilings) as well as for exterior solutions (with siding and roofing).
The purchase price represents a multiple (before synergies) of approximately 9.6x Bailey’s 2023 EBITDA of C$91.3 million and a multiple of approximately 7.5x when including run-rate synergies of approximately C$26 million in year 3.
The acquisition is a further step in the Group’s “Grow & Impact” strategic plan and meets its financial criteria:
1) Strengthening Saint-Gobain’s offer in North America in light and sustainable construction with a long-standing partner that provides confidence in a smooth integration thanks to a similar culture and shared values;
2) Value creation by year 3 following the closing of the transaction and EPS (Earnings Per Share) accretive from year 1: significant synergy opportunities are estimated at C$26 million by year 3, including cost synergies of C$21 million (procurement, industrial performance improvement and SG&A cost optimization) and sales synergies of C$5 million thanks to the completion of Saint-Gobain’s full-range offer for light construction in Canada;
3) Maintaining a strong balance sheet with net debt to EBITDA remaining below the target (1.5x to 2.0x) including the recently announced CSR Limited acquisition.
The acquisition will be fully financed in cash. Closing of the transaction is subject to customary conditions and expected in the second half of 2024.
Tour Saint-Gobain • 12 place de l’Iris • 92400 Courbevoie • France • Tel. +33 1 88 54 00 00 • www.saint-gobain.com
Tour Saint-Gobain • 12 place de l’Iris • 92400 Courbevoie • France • Tel. +33 1 88 54 00 00 • www.saint-gobain.com