Private equity offer trumps Big Board listing for Hanson Building Products

Germany’s HeidelbergCement AG projects a first quarter closing on the $1.4 billion sale of Hanson Building Products operations in the U.S., Eastern Canada and United Kingdom to an affiliate of Lone Star Funds, a real estate investment-centered private equity firm with Dallas, New York and Frankfurt offices. A definitive agreement on the transaction, announced late last year, superseded a Hanson Building Products Ltd. public offering HeidelbergCement had outlined three months prior in a U.S. Securities & Exchange Commission filing.

 

The final value of the transaction hinges on the 2015 financial per¬formance of an entity with 107 concrete and steel pipe, precast, concrete roof tile and clay brick operations, plus 11 distribution sites, in the U.S., Canada and U.K. With a payroll just over 4,600, Hanson Building Products logged $1.1 billion in sales and $90 million in EBITDA for 2013.

The sale is consistent with HeidelbergCement’s concentration on cement and aggregate processing, plus downstream activities. “Hanson Building Products is a multinational business with leading market posi¬tions, but the focus of its portfolio on bricks, pressure and gravity pipes and precast is outside the core businesses of HeidelbergCement,” says CEO Dr. Bernd Scheifele, who cites Lone Star “as an experienced financial investor [that] will support the sustainable development of the business going forward.”

Proceeds from the Hanson Building Products sale will be used to lighten a heavy debt load HeidelbergCement has carried since the 2007 takeover of Hanson Plc, whose portfolio included the non-core pipe, precast and masonry production and distribution assets.