Irish building materials company CRH plc announced it has agreed to buy Middleburg Heights, Ohio-based Barrette Outdoor Living — a maker of products including vinyl, aluminum and steel fences and railings, as well as composite decking — in a deal with an enterprise value of $1.9 billion.
The transaction, which will be financed through existing financial resources and is subject to regulatory approval, is expected to close in the second half of 2022, CRH said in a news release issued June 3. CRH said the $1.9 billion enterprise value of the deal comprises cash consideration of $1.85 billion and about $40 million of capitalized lease liabilities.
The Reuters news service noted that the Barrette acquisition follows the $3.8 billion sale by CRH this year of its U.S.-based glass product manufacturing unit. Reuters added that CRH, the world's second-largest building materials supplier, "has concentrated on smaller, bolt-on acquisitions" since it bought U.S.-based Ash Grove Cement for $3.5 billion in 2018.
CRH said in its release that the deal for Barrette represented an acquisition multiple of about 10 times EBITDA (earnings before interest, taxes, depreciation and amortization), pre-synergies. In 2021, Barrette "reported profit before tax of $79 million and gross assets of $1.2 billion," according to the CRH release.
A report from the Moody's rating agency stated that Barrette in the 12-month period ended Sept. 30, 2021, "generated roughly $707 million in revenue."
A phone message and email to Barrette on Friday morning were not immediately returned.
In the past few months, Barrette has launched a new polypropylene privacy screen, a DIY flooring system called InstaDeck, and horizontal vinyl fence styles ahead of the spring construction season.
The manufacturer holds 75 patents and uses proprietary machinery to produce vinyl, aluminum, steel and composite fencing and railing; composite decking; and other building products at 14 facilities to sell at home centers, specialty stores and lumber yards.
Albert Manifold, CEO of CRH, in a statement called Barrette "an excellent addition" to the company. He added, "Our Architectural Products business has been one of our fastest-growing businesses in recent years and the acquisition of Barrette complements and enhances our existing offering of sustainable outdoor living solutions in North America."
The sale represents an apparent change of course for Barrette.
Bloomberg in February reported that the owners of Barrette were considering an initial public offering that could value the business at more than $1 billion.
Canadian private equity firm TorQuest Partners and pension fund Caisse de Depot et Placement du Quebec (CDPQ) held preliminary talks with advisers about taking Barrette public this year, Bloomberg reported, citing sources who asked not to be identified because they weren't authorized to speak publicly.
TorQuest and CDPQ announced a majority investment in Barrette in November 2020 with the former owner, Les Entreprises Barrette Ltee, retaining a minority interest, according to a statement at the time.