According to the statement, Boral has sold the business to Brannan Sand and Gravel for $USD127 million ($AUD169m). It noted it expected to make a $USD45 million ($AUD60m) pre-tax profit on the sale, with the income to be used to reduce company debt.
Boral’s CEO and managing director Mike Kane said that although Boral’s US construction materials business – which solely resided in Colorado – had performed well, it was ‘non-core’ to operations as the company intended to narrow its focus in the area.
“Boral’s strategy in the USA is focused on growing our building products and fly ash businesses,” Kane said.
“As we continue to strengthen our core business and deliver synergies from the Headwaters acquisition, the time is right for Boral to realise value by divesting the construction materials business in Colorado,” he added.
Boral acquired American building materials supplier Headwaters in late 2016 for USD$3.5 billion (AUD$4.6b).
A spokesperson for Boral Australia was asked whether this would be a good outcome for the Australian side of the business; however a response had not been received at time of publication.
For the six months ended December 2017, Boral contributed $USD52 million ($AUD69m) of revenue to Boral North America. The company also reported a 58 per cent increase in net profit after tax before amortisation and significant items – about $AUD237 million when compared to the previous year’s corresponding period.
Boral has owned its US construction materials and quarrying operations since 2004. The sale is expected to be finalised by 31 May, 2018.