CRH Agrees to Acquire Pavestone Co.–The Seller, Schlegel Consolidated, will focus on its stone veneer business

RH plc was formed through a merger in 1970 of two leading Irish public companies, Cement Limited and Roadstone Limited. In 2004, CRH had sales of €12 billion and, for the first time, a profit-before-tax income exceeding €1 billion. CRH has acquired a total of 69 companies. In 2006, CRH spent a record €2.1 billion on acquisitions, including Ashland Paving and Construction, MMI Products, Inc., and the Halfen-Deha Group. Image: Cover of CRH 2006 Annual Report.

CRH plc, an international building materials group, announced March 13, 2008 its agreement to acquire the Pavestone Group LP for an upfront cash consideration, including debt assumed, of 540 million USD (euro 348 million), plus deferred consideration contingent on future increases in profitability.

The deal is subject to regulatory approval by the Federal Trade Commission.

CRH (www.www.crh.ie) is headquartered in Ireland, but operates in 31 countries and employs 80,000 people. It has three primary sectors: primary materials, value-added building products and specialty building materials distribution.

Pavestone Co.

Bob Schlegel founded Dallas-based Pavestone Co. in 1980. Pavestone operates a national network of 18 concrete paver plants at 16 locations in the U.S. and has decorative stone bagging plants at 14 of those locations. The company employs 1,300 to 1,600 people, depending upon which reported head count you believe.

Employees of Pavestone Company will be absorbed by CRH.

The seller of Pavestone Co., Schlegel Consolidated, will receive CRH’s manufactured stone veneer business, Landmark Stone. Schlegel will combine the Landmark Stone business with its existing manufactured stone business, Tejas/Veneerstone, to continue to build a company with international distribution and market diversity.

“The decision to divest this unit will allow us to focus on our stone veneer business which manufactures a lightweight, concrete stone siding product for the residential and commercial building industry,” said Bob Schlegel, founder and CEO of Pavestone Co. “We believe there are tremendous growth opportunities for manufactured stone in the siding market, especially in the growing multi-family and commercial markets.”

Approximately 70 percent of Pavestone’s sales are in the retail home center market, with the remaining sales split evenly between the commercial and distributor channels.

“The decision to divest this unit will allow us to focus on our stone veneer business which manufactures a lightweight, concrete stone siding product for the residential and commercial building industry,” said Bob Schlegel, founder and CEO of Pavestone Co. “We believe there are tremendous growth opportunities for manufactured stone in the siding market especially in the growing multi-family and commercial markets.”

Pavestone’s adjusted earnings before interest, taxes, depreciation and amortization for 2007 was approximately $65 million on sales of $368 million.

Pavestone’s operations complement the existing retail business of CRH’s Architectural Products Group (APG), which operates from 30 paver plants and 11 bagging plants in 37 states. Acquisition of Pavestone offers APG a broader national footprint in concrete landscaping products (pavers, retaining wall products and patio products) and bagged stone, with excellent modern production facilities and an experienced workforce.

“The proposed acquisition of Pavestone represents an opportunity to build on our success in developing APG into the leading North American supplier of multiple landscaping products, enabling profitable growth and an improved ability to service our core professional and hardscape markets,” explained CRH Chief Executive Liam O’Mahony.