Compagnie de Saint-Gobain (SGO) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition aligns with the strategy to expand the global construction chemicals platform, especially in high-growth regions like India and the Middle East, and complements existing platforms from prior acquisitions.

• Fosroc brings a strong brand, technical expertise, and a comprehensive solutions portfolio, enhancing the offering and market reach.

• The deal builds on recent acquisitions, strengthening presence in Europe, Turkey, Africa, North America, Latin America, and Asia-Pacific.

• Fosroc's focus on infrastructure and retail channels in India enhances cross-selling opportunities and market reach.

• Fosroc's strong market position in India and the Middle East supports expansion in regions with robust infrastructure growth.

Financial terms and conditions

• Purchase price is $1,025 million (€960 million) in cash, representing 11.3x 2024E EBITDA ($91 million) pre-synergies and 7.1x post-synergies.

• Transaction is fully financed in cash, with limited impact on leverage ratio, keeping within the 1.5x–2x target range.

• EPS accretive from Year 1 and value-creative by Year 3.

• Estimated goodwill from the deal is around EUR 500 million.

• Closing expected in H1 2025, subject to customary conditions.

Synergies and expected cost savings

• $54 million in run-rate synergies expected by year three, including $39 million in cost synergies from procurement, operations, and SG&A.

• At least $15 million in growth synergies anticipated from cross-selling, portfolio enrichment, and innovation.

• Synergies represent about 3% of construction chemicals sales and are backed by detailed analysis.

• Cost synergies from procurement, formulation, engineering, and SG&A mutualization.

• Acquisition expected to be EPS accretive from year 1.