James Hardie Industries plc (ASX:JHX) announced today that it has completed its acquisition of German based XI (DL) Holdings GmbH and its subsidiaries (including, but not limited to, Fermacell GmbH) from Xella International S.A. in an all-cash transaction based on an enterprise value of €473 million. The closing of the transaction took place on 3 April 2018 (Central European Time) following the completion of all customary closing conditions.
In December 2017, James Hardie entered into a €525 million 364-day term loan facility to fund the Fermacell acquisition. We funded the closing payment with a combination of cash on-hand and a €400 million drawdown on this facility. We anticipate refinancing this facility in the euro bond market during calendar year 2018. Dr. Jack Truong, President, International Operations of James Hardie, welcomed the completion of the acquisition which will add over 800 new James Hardie employees in Europe. Dr. Truong said, “We welcome our new employees to the James Hardie group and acknowledge the hard work undertaken by our integration team consisting of people from James Hardie, Fermacell and our advisors to achieve this significant milestone.”
Dr. Truong added, “We are ready to realize the benefits of this strategic acquisition and are excited about adding this high quality business to the James Hardie group. Fermacell’s broad European footprint and capabilities offer the right enabling platform to accelerate our fiber cement business growth in Europe. We are also excited about the future growth opportunities of Fermacell’s core business in regions such as the UK, France and Scandinavia”.
Louis Gries, Chief Executive Officer of James Hardie, commented, “Reaching this significant milestone is an important step in achieving our long-term strategic goals in Europe. Fermacell’s market position, go-to-market strategy and strong management team will enable us to scale and accelerate our European business. The Fermacell acquisition diversifies our geographic, product and end-market portfolio, complementing our strong positions in North America and Australasia, and will create significant growth opportunities and drive longterm value for customers, employees and shareholders.”
Beginning with the first quarter fiscal year 2019 results, James Hardie intends to include a European Building Products segment in its report of quarterly results. This new segment will include the on-going James Hardie European Fiber Cement business and the newly acquired Fermacell business. The current International Fiber Cement segment will be renamed Asia Pacific Fiber Cement and will include our Australia, New Zealand and Philippines businesses.
James Hardie will provide additional information regarding Fermacell as well as an update on the integration, in its management presentation at the fourth quarter fiscal year 2018 results briefing on Tuesday 22 May 2018 at 10:00am AEST.