Boral Limited announced that it has agreed to sell its Concrete & Quarries business in Denver, Colorado to Brannan Sand and Gravel Company, LLC for US$127 million.
The sale price represents a trailing 12 month EV/EBITDA multiple of around 8 to 9 times.
On completion, Boral expects to recognise a pre-tax profit on sale of around US$45 million subject to customary completion adjustments, which will be reported as a significant item in FY2018.
Proceeds from the sale will be used to reduce debt.
Boral’s CEO & Managing Director, Mike Kane, said that while the Colorado construction materials business has performed well, these are the only concrete and quarry operations that Boral owns in the USA and the business is non-core.
“Boral’s strategy in the USA is focused on growing our building products and fly ash businesses.
“As we continue to strengthen our core business and deliver synergies from the Headwaters acquisition, the time is right for Boral to realise value by divesting the construction materials business in Colorado,” said Mr Kane.
The transaction is expected to complete on or around 31 May 2018 and is subject to customary regulatory approvals.
Boral has owned the Colorado construction materials operations since 2004.
For the six months ended December 2017, the US Concrete & Quarries business contributed US$52 million of revenue to Boral North America.
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