Boral Finalizes Acquisition of Headwaters Inc.

Boral Limited announced that it has completed its acquisition of Headwaters Inc., a building products manufacturer and fly ash marketer in North America. The closing of the transaction follows approval by Headwaters’ shareholders and receipt of all required regulatory approvals.

With the closing of the acquisition, effective May 8 in the United States, Headwaters becomes a wholly owned subsidiary of Boral Limited and no longer a publicly traded company. Boral’s CEO and managing director, Mike Kane, said the acquisition was a transformative step for Boral, its employees, customers and for shareholders, positioning the Group to deliver more sustainable growth through the market cycles.

“To ensure that we seamlessly realize the benefits of this strategic acquisition for all of our stakeholders, teams from Boral and Headwaters are coming together to implement integration plans that leverage the talents and expertise of both companies,” said Kane.

“I would like to recognize the hard work undertaken over the past year or so by so many people from both Boral and Headwaters and our advisers. Reaching this significant milestone demonstrates the commitment and belief we all have in this value-creating merger of two great businesses.  We are ready and well-positioned to deliver on our promises.”

Boral USA and Headwaters combined will form a new division to be named Boral North America — a $1.8 billion revenue business — which will be headquartered in Atlanta, the location of Boral’s current US headquarters. Boral Limited is an international building and construction materials group headquartered in Sydney, Australia.

Headwaters Inc. Acquires Metals USA’s Stone-coated Metal Roofing Products Business

Headwaters Inc., a building products company dedicated to improving lives through innovative advancements in construction materials, has acquired the assets of Metals USA’s roofing products business (“Gerard”). Founded in 1981, Gerard is the second largest manufacturer of stone coated metal roofing materials in the United States. Gerard sells seven primary metal profiles, including classic tile, barrel vault, and canyon shake. This niche roofing product combines aesthetically pleasing profiles resembling tile, shake, or slate with a fire proof material and a low lifetime installed cost.

“One element of our business strategy is to increase the number of products that we provide to our core customers,” said Kirk A. Benson, Headwaters’ Chairman and Chief Executive Officer. “The $2.6 billion specialty niche roofing market is of interest to our core customers and is an area of focus for Headwaters. With the addition of Gerard, we now have three product categories in niche roofing, including composite, concrete, and metal which we believe will open up opportunities for cross selling as well as bundling a complete roofing system, including our Tag & Stick underlayment product.”

Gerard fits Headwaters’ strategy to pursue building product opportunities where we can enjoy strong market share and top quartile industry margins. “We are excited about the combination of our metal roofing products with Headwaters’ composite product,” said Ron Anderson, President of Gerard. “We strongly believe in the sales synergy associated with marketing both products with Gerard’s national sales force, creating opportunities for roofing contractors to pull more product through distribution. There is an upside opportunity to expand our sales internationally, as our metal products are well received throughout the world.”

“The $28 million transaction will be immediately accretive to earnings. We are funding the transaction with existing balance sheet cash, and of course, will benefit from financial leverage as the operating returns significantly exceed the cost of our debt,” said Don P. Newman, Chief Financial Officer. “Our net debt to adjusted EBITDA ratio will increase slightly with the use of cash, but we remain on track to achieve our desired leverage ratio in 2015.”