Saint-Gobain to acquire GCP Applied Technologies for $2.3bn

Saint-Gobain agrees to acquire GCP Applied Technologies for $2.3bn

LONDON, UK: Saint-Gobain has entered into a definitive agreement to acquire all of the outstanding shares of and GCP Applied Technologies for $32 per share, in cash, in a transaction valued at approximately $2.3bn.

This acquisition is a decisive step in establishing Saint-Gobain’s leading position worldwide in construction chemicals with total sales of more than €4bn (up from €3bn), and furthers the Group’s strategy as worldwide leader in light and sustainable construction.

The agreed upon price represents a multiple (before synergies) of approximately 13.2x GCP’s 2022E adjusted EBITDA of $170 million and a multiple of 8.8x EBITDA post run-rate synergies of $85 million, and a premium of 39% above the volume-weighted average price per GCP share for the 30-trading days ended on the undisturbed date of November 30, 2021.

This acquisition meets the Group’s strategic and financial criteria articulated during the Capital Markets Day of October 6, 2021:

1) Strengthening leadership positions notably in North America and Asia as well as offering enrichment in light and sustainable construction

2) Value creation by year 3 following the closing of the transaction and EPS (Earnings Per Share) accretive from year 1 (+4% before synergies)

3) Maintaining a strong balance sheet and solid credit rating with a limited impact of +0.3x net debt to EBITDA.

The business combination has been unanimously approved by the Boards of Directors of Saint-Gobain and GCP Applied Technologies. Saint-Gobain has obtained undertakings from Starboard and Standard Investments (formerly known as 40North)/Standard Industries to vote their respective stakes of 8.9% and 24.2% in favor of the transaction.

Closing of the transaction is subject to GCP shareholders’ approval, antitrust approvals and satisfaction of other customary closing conditions; it is expected to close by year-end 2022.

GCP Applied Technologies is a major global player in specialty construction chemicals with approximately $1.0bn revenues, 50 manufacturing plants in 38 countries and employs around 1,800 people.

It brings a global platform with established success in cement additives, concrete admixtures, infrastructure and commercial and residential waterproofing. GCP is a unique opportunity for Saint-Gobain to establish a leading worldwide presence in the growing construction chemicals sector, delivering both sustainability and performance for customers.

The combined platform of Weber, Chryso and GCP offers customers a highly comprehensive portfolio of construction chemicals solutions with strong complementary geographic footprints.

Simon Bates, President and Chief Executive Officer of GCP, commented: “Today opens an exciting new era in GCP’s rich history, for our shareholders, customers and employees. We are thrilled for GCP to join Saint-Gobain, the ideal strategic partner to support our growth. Thanks to its global platform, significant resources as well as commercial and innovation expertise, Saint-Gobain is perfectly positioned to ensure the success of GCP’s operations and people over the long term.”

Peter Feld, Independent Chair of the Board of GCP, added: “The Board of GCP is unanimously supportive of this transaction and believes it provides full and fair value to all shareholders of GCP.

Saint-Gobain represents a great partner for GCP and we are pleased to have reached this agreement. The Board would like to thank our leadership team and our dedicated employees for their significant contributions to GCP. These efforts have allowed us to achieve this great result.”

Benoit Bazin, Chief Executive Officer of Saint-Gobain, commented: “The acquisition of GCP is an excellent and significant step for Saint-Gobain to further reinforce its worldwide leadership in construction chemicals and strengthen its geographic presence in North America and emerging markets, both objectives being at the core of our “Grow & Impact” strategic plan.

We are very happy and truly excited to welcome into Saint-Gobain the GCP teams, with whom we share the same industrial and commercial culture. Given GCP’s leadership in its sector with well-recognized brands, expertise, know-how and businesses that are highly complementary with Chryso and CertainTeed, we are convinced that this great combination will create a very strong platform, with improved reach, value added solutions and services delivered to our customers.

Leveraging Saint-Gobain’s scale and innovation capabilities, with GCP’s attractive geographic footprint, this transaction will result in enhanced profitable growth and value creation for our shareholders and will provide attractive development opportunities for both teams around the world.”

Lazard and Citi are acting as financial advisors, and Freshfields Bruckhaus Deringer LLP is acting as legal counsel to Saint-Gobain in connection with the transaction.

www.saint-gobain.com

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