The Australian company entered into a deal to acquire Utah-based Headwaters after its board unanimously approved.
The acquisition means Boral could more effectively capitalise from an infrastructure improvement plan the incoming Trump administration has recently promised, that some media outlets claim could involve as much as $USD1 trillion ($AUD1.4 trillion) of spending.
A Boral spokesperson told Quarry the two companies had been in discussions for several months, well before the election. However, Boral CEO and managing director Mike Kane said Trump’s election may provide some additional tailwinds for the combined US business during an investor and media call.
The acquisition would more than double the revenue of the Boral USA division, bringing it up to a combined total of more than $USD1.8 billion ($AUD2.4 billion), according to a company statement.
Fly ash specialists
Headwaters has two core divisions: building products – including stone, roofing, siding, trimboard and windows – and construction materials.
The construction materials arm is said to be one of America’s largest marketers of fly ash, which can be used as a partial replacement and cheaper alternative for cement in producing concrete.
It is set to deliver a significant increase to Boral USA’s existing fly ash business.
Kane said the acquisition of Headwaters would be “highly transformative” for Boral as a group.
“The businesses of Headwaters are highly complementary with Boral’s existing US operations – in fly ash, roofing, stone and light building products,” Kane said.
“It’s the synergy opportunities that help make this a highly compelling acquisition,” he added, “and I am confident that we have the right team in place to bring together the two portfolios, drive integration and deliver strong value creation for Boral’s shareholders.”
“We can now be confident in Boral’s position as a global building products and construction materials group with three very strong divisions,” Kane concluded.
The three divisions comprise Boral Australia, Boral USA and Boral Gypsum.
The deal is expected to be completed by mid-2017.
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