The purpose of this press release is to provide an update on the acquisitions carried out by the Group in 2004 (not including share buybacks by Compagnie de Saint-Gobain), and particularly those which were not specifically announced at the time.
Acquisitions are cornerstone of the Group's business developement strategy, and are mainly pursued in three directions:
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Building Distribution – primarily made up of local-based operations offering significant external growth potential in Europe, particularly through bolt-on acquisitions, and acquisitions of small and medium-sized companies. |
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High-Performance Materials – involving operations carried out on a global scale – offers acquisition opportunities in both developed and emerging countries, allowing the Group to respond to the needs of its industrial partners around the world. |
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Historic Businesses – whose growth potential is primarily concentrated in emerging countries (China, India, Latin America, Russia and Eastern Europe). |
In each of these three groups of businesses, Compagnie de Saint-Gobain is faced with a broad spectrum of acquisition opportunities. The opportunities it decides to take up are selected on the basis of stringent criteria, including the quality of the teams available, responsiveness to customer needs, and proven ability to create value for the Group.
In 2004, excluding Dahl, the Saint-Gobain Group primarily carried out bolt-on acquisitions in the Building Distribution sector, alongside various transactions in emerging countries within the Historic Businesses and High-Performance Materials sectors.
Overview of 2004 acquisitions by group of businesses
2004 acquisitions
(in € m) |
Value of
securities
acquired
|
Debt
acquired |
Enterprise
value |
Estimated 2004 full-year sales * |
| Distribution – Dahl |
384 |
312 |
696 |
1,503 |
| Distribution – bolt-on acquisitions |
145 |
-17 |
128 |
317 |
| Historic Businesses |
102 |
7 |
109 |
120 |
| High-Performance Materials |
27 |
3 |
30 |
28 |
| TOTAL acquisitions |
658 |
305 |
963 |
1,968 |
| BUILDING DISTRIBUTION: FINANCIAL INVESTMENT OF €529 MILLION FOR ADDITIONAL SALES OF €1,820 MILLION. |
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In addition to the acquisition of the Scandinavian-based Dahl (financial investment of €384 million and €1,503 million in acquired sales), the Distribution sector carried out 30 bolt-on acquisitions in France, the United Kingdom and Germany, representing a financial investment of €145 million for additional sales of €317 million.
The principal transactions broken down by country were as follows:
France:
18 companies acquired (61 sales outlets), representing total full-year sales of €135 million.
- 8 specialized distributors, namely Boch Frères, a tiling and bathroom specialist, Mi- Landes (Cazenave group) in south-western France, specialized in roofing products, Cessac and Sobem - two companies specializing in wood and paneling based in the Paris region and in Normandy, the Paris-based plumbing and heating specialist Navatte, and Salgado, operating in the plumbing and heating sector in the Aude and Pyrénées orientales regions.
- 10 general distributors, namely Le Groupe Lejeune in Brittany, Porcher Matériaux based in Central France, and Combronde.
United Kingdom:
10 companies acquired (24 sales outlets), representing total full-year sales of €79 million.
- 5 specialized distributors, including Northern Ireland-based Philip M. Bassett, specializing in plumbing and heating, Eastern Glazed Ceramics, a distributor of ceramic wall and floor tiles in south-western England, and tiling specialists Maxon Tile Distributors.
- 5 general distributors, including Pudsey Building Supplies in Yorkshire, E.P. Builders Merchants in Leicester and Stanley Milnes Ltd.
Germany:
2 companies acquired (19 sales outlets), representing full-year sales of €103 million.
The acquisitions involved two specialist distributors, namely Kluwe, tiling distributor, and Muffenrohr, specialized in public works, in which the Group purchased the remaining stake of 50%.
| HISTORIC BUSINESSES: FINANCIAL INVESTMENT OF €102 MILLION FOR ADDITIONAL
SALES OF APPROXIMATELY €120 MILLION. |
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Acquisitions in emerging countries:11 transactions representing full-year sales
of approximately €53 million.
In line with the Group’s business model, growth in the Historic Businesses is more keenly felt in emerging countries, where domestic markets will prove key to business expansion efforts in the next few years.
- In emerging countries, the Flat Glass sector made a series of acquisitions, primarily in China, where the largest acquisition concerned the Quingdao float line. These transactions represent full-year sales of €36 million.
- Acquisitions in the Construction Products sector (Building Materials & Insulation) in the Czech Republic and in China represented full-year sales of €17 million at the transaction date.
Other acquisitions by the Historic Businesses: 10 transactions for full-year sales of €67 million
The Historic Businesses made a series of local and regional bolt-on acquisitions, particularly in the Construction Products sector, representing €54 million in sales. In the Mortars business, the Building Materials division acquired French-based Mauer, Eurovente/Strasservil, Emfi France (plant specialized in glues for tiling), as well as Lusocil in Portugal. The Insulation division acquired Plafométal, the leading French producer of metal frames and suspended metal ceilings.
| HIGH-PERFOMANCE MATERIALS: FIANCIAL INVESTLENT OF €27 MILLION FOR ADDITIONAL SALES OF €28 MILLION. |
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The High-Performance Materials sector made a series of investments in emerging countries with the aims of partnering its industrial customers worldwide and of reducing its costs. All of the sector’s financial investments were made in Reinforcements:
- In China, the Group created Saint-Gobain Technical Fabrics HongFa, a jointventure based in Changzhou specializing in fabrics for the composites industry.
- In Russia, the Group acquired 85% of Steklovolokno, the leading manufacturer of reinforcement threads in Russia.
- In Romania, the Group acquired Rompoliner, specialized distributor of products for reinforcements.
March 25, 2005
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