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James Hardie to Close EUR 473m Acquisition of Germany Based Fermacell in Early April.

M2 EQUITYBITES-March 23, 2018-James Hardie to Close EUR 473m Acquisition of Germany Based Fermacell in Early April

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23 March 2018 - Australian fibre cement siding manufacturer James Hardie Industries plc (ASX: JHX) will close its acquisition of German-based XI Holdings GmbH and its subsidiaries (including fiber gypsum board manufacturer Fermacell GmbH) in early April, the company said.

The company previously disclosed an indicative close in the fourth quarter of James Hardie's 2018 fiscal year.

This deal was announced on 8 November 2017.

Under the deal, James Hardie Industries agreed to acquire German-based XI Holdings GmbH and its subsidiaries (including fiber gypsum board manufacturer Fermacell GmbH) from Germany based building materials company Xella International S.A. to accelerate growth in European market.

XI Holdings will be acquired in an all-cash transaction valued at EUR 473m (USD 549m). James Hardie said it intends to fund the acquisition with debt financing.

James Hardie expects the transaction to be accretive in the second full fiscal year following the close. In the first full fiscal year following the close, James Hardie expects the transaction to be accretive excluding transaction, integration and other one-time costs.

Fermacell will account for approximately 15% of total global revenue of the combined business. The acquisition is expected to close in the fourth quarter of James Hardie's 2018 fiscal year and is subject to customary closing conditions.

This complementary acquisition of Fermacell provides James Hardie with a growth platform for expanding its fiber cement business into the European market.

Similar to James Hardie, Fermacell is a leader of a premium, differentiated product category, and has strong brand recognition, deep customer relationships, broad distribution and a pull-through and a technical sales force.

James Hardie said Fermacell's market position, go-to-market strategy and management team will enable the company to scale and accelerate its European business.

Fermacell will diversify the company's geographic, product and end-market portfolio, complementing its positions in North America and Australasia, and will create growth opportunities and drive long-term value for customers, employees and shareholders.

James Hardie Industries' products are used in a number of markets, including new residential construction (single and multi-family housing), manufactured housing, repair and remodeling and a variety of commercial and industrial applications.

The company's current primary geographic markets include the US, Canada, Australia, New Zealand, the Philippines and Europe.

HSBC is acting as sole financial advisor, as well as providing committed debt financing for the acquisition on a sole basis, and DLA Piper is acting as legal advisor to James Hardie.

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Date:Mar 23, 2018
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