Pavestone Purchased by Irish Firm

Workers with Missouri-based Mark Walters Walls install a driveway using Pavestone pavers. Pavestone was founded in Texas in 1980, but was acquired by Ireland-based CRH this month.

An Ireland-based building-materials giant has acquired Texas-based Pavestone Group for a base payment of $540 million. Despite some concern over the U.S. construction industry, CRH believes the hardscape products market will remain strong for the long term.

Despite Market Concerns

As part of the deal, Pavestone’s current owner, Schlegel Consolidated, will take over CRH’s manufactured stone veneer business, Landmark Stone.

CRH said Pavestone, which supplies paving stones, retaining walls and patio stones to retail and commercial clients, would expand the retail business of APG, its U.S. landscaping products division.

Barry Dixon of Davy, the Irish stockbroker, said: “This looks like a good deal for CRH in that it consolidates its position in the U.S. paver market.”

The view was echoed by John Sheehan, analyst at NCB, who noted that despite the weakness in the US residential market, the acquisition of Pavestone would raise the group’s profile in a sector that has delivered strong returns over many years.

Final Hurdle

The arrangement is subject to approval by the U.S. Federal Trade Commission, but is likely to get a green light.

CRH (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.

Siding Business to U.S.

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 take over CRH’s manufactured stone veneer business, Landmark Stone. Schlegel will combine the Landmark Stone business with its existing manufactured stone business, Tejas/Veneerstone.

“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 Schlegel.

Outlook for Growth

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

Sources: Financial Times (U.K.), press reports