Boral has completed the sale of its 50 per cent share in USG Boral to Gebr Knauf KG (Knauf) for $USD1.015 billion ($AUD1.33 billion), giving full ownership of the plasterboard specialist to the German multinational.
When Knauf acquired the previous co-owner of USG Boral, US Gypsum, Boral chief executive officer Zlatko Todorcevski conceded the sale was the right thing to do.
“We recognise that it makes sense for Knauf – being the world’s largest plasterboard player – to have 100 per cent ownership of the business,” Todorcevski said.
“The sale of our 50 per cent interest in USG Boral to Knauf for an attractive premium creates substantial value for Boral’s shareholders.”
When the deal was struck in October 2020, Boral indicated it saw USG Boral as on the decline, with an eight per cent drop in revenue for the 2020 financial year.
The sale puts Boral in a much stronger financial position, ready to invest the sale profits back into the business, or into shareholders’ pockets.
“The sale enables Boral to reduce net debt to our current target of $AUD1.5 billion, and create surplus capital available for return to shareholders, which is consistent with Boral’s financial framework,” Todorcevski said.
Boral also announced an on-market share buyback in order to meet future operating cash flows. The buyback is intended to be funded by the sale of USG Boral.
“We believe that an on-market buy-back is the most effective method of returning this surplus capital to our shareholders,” Todorcevski said.