Cement Roadstone’s Wall Street destiny

CRH Plc guidance on 2022 performance—to which Americas Materials Solutions and Building Solutions segments comfortably contributed—offers some of the most definitive U.S. and Canadian market aspirations we’ve heard from the company during its 45 years of mining aggregate, milling cement, bagging dry mix, fabricating precast, molding masonry and delivering ready mixed concrete or asphalt this side of the pond. The former Cement Roadstone Holdings concludes an April report to shareholders with this flourish:

North America represents approximately 75 percent of Group EBITDA and is expected to be a key driver of future growth. We believe a U.S. primary listing will bring increased commercial, operational and acquisition opportunities, further accelerating our integrated solutions strategy and delivering even higher levels of profitability, returns and cash.

Although not named in the guidance, the target is almost certainly the New York Stock Exchange; a proposal to switch the primary listing from the London Stock Exchange is set for shareholder vote next month. CRH shares already trade on the NYSE through an American Depositary Receipt facility: One share equals one ADR. While credit or financing questions have rarely, if ever, accompanied its merger and acquisition pursuits, CRH will apparently be even better positioned for North American market deals with a primary listing on Wall Street.

Management prefaced the London Stock Exchange move referencing the past decade’s reshaping of an already sound portfolio that Oldcastle had built since its 1978 North American market arrival. The reshaping process has seen CRH exit building materials distribution (Allied Building Materials); glass (BuildingEnvelope); clay brick (Glen-Gery); and, architectural or structural building precast, which sealed an Oldcastle Precast to Oldcastle Infrastructure transition. 

Post-Great Recession asset disposals freed up capital for nine- and 10-digit deals establishing or strengthening CRH as an elite North American cement, aggregate, concrete, and asphalt player. Dealmaking has been skewed but not exclusive to the Americas Materials Solutions business. Consider activity in the Americas Building Solutions companion: Oldcastle APG’s significant ramp up of block, paver and dry mix packaging capacity, plus major bolt-on transactions like EP Henry or Calstone and last year’s nearly $2 billion Barrett Outdoor Living deal. Or Oldcastle Infrastructure’s assimilation of Hancock Concrete Products and Rinker Materials Texas assets. 

If it becomes the primary listing venue for CRH shares, the NYSE would have a robust and representative sampling of North American cement, aggregate, concrete and asphalt operators, production capacity and reserves. CRH would trade alongside Eagle Materials, Knife River Holding Co. (post-MDU spinoff), Martin Marietta Materials, Summit Materials and Vulcan Materials. CRH Dublin and Atlanta office leaders might even break from their low profile routines and assemble on Wall Street to ring the NYSE Opening Bell.