Benzinga | Dec 6, 2021 05:05AM EST

Saint-Gobain Announced Acquisition of GCP Applied Technologies for $32/Share in Cash

Saint-Gobain and GCP Applied Technologies announce that they have entered into a definitive agreement pursuant to which Saint-Gobain will acquire all of the outstanding shares of GCP for $32.00 per share, in cash, in a transaction valued at approximately $2.3bn (approximately 2.0bn). 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 construction2) 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 EBITDAThe 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.

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