Leading Australian building products group, Brickworks (ASX:BKW) is to spend $151 million buying one of the US’s largest brick makers, Glen-Gery.
The company announced it would buy America’s fourth largest brick maker to take it into new markets and as a basis for growth.
Brickworks Managing Director, Lindsay Partridge said: “The acquisition of Glen-Gery represents a significant milestone in the history of Brickworks.
“We believe the transaction provides an ideal entry into the U.S. market, with Glen-Gery having established a leading market position in the key North-Eastern region, a reputation for premium products, and high exposure to the architectural market.”
Glen-Gery, a subsidiary of UK-based Ibstock PLC, had sales of $162 million and an EBITDA in its latest year to August of $18 million.
Brickworks said the aquisition would allow it to:
o Share operational best practice across Australia and the U.S.
o Share products / IP across Australia and the U.S.
o Leverage existing relationships to introduce premium imported products in the U.S.
Partridge said: “The U.S. is an attractive country to invest and grow our business, with tax policies that are supportive of business, proactive energy policy that is placing downward pressure on prices, and efficient transport infrastructure.
“The contrast with Australia could not be more stark, where we are faced with high taxes and wages, including taxes on wages, a shortage of energy for domestic use that is causing exorbitant prices, and costly approval processes for business investment.”
Partridge said the purchase did not lessen Brickworks commitment to the Australian market, which is about a third of the size of that in the US.
Brickworks operates under a number of Australian brands including Austral Bricks, Bristile Roofing, Auswest Timber, Bowral Bricks, and Nubrik.
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