Irish building materials group CRH said today it had agreed to buy US rival MMI Products Inc. for about $350 million cash, in a deal that it expects to complete by the end of this week.
MMI has three main units: Merchants Metals, which makes fencing products; Ivy Steel and Wire, which makes welded wire reinforcement for infrastructure projects; and Meadow-Burke, which makes construction accessories.
CRH's Dublin-listed shares rose 2.3 percent to €29.3 by 12.19 pm versus a 0.5 percent stronger Irish market. Its London-listed stock was up 2.2 percent.
"The transaction represents a unique opportunity for future development of CRH's operations within the US in sectors which have already proved successful for the group in Europe," said Chief Executive Liam O'Mahony.
MMI employs about 2,500 people and generated earnings before interest, tax, depreciation, amortisation and goodwill of $50 million in 2005 on sales of $721 million, CRH said.
The Irish group said MMI would be the foundation of a fifth product group for its Americas Products & Distribution Division.
Analyst Robert Eason at Goodbody stockbrokers said the price looked reasonable for such a strategic move.
"They've been looking for this new product grouping for some time, and hopefully this will be the first move of many for that division," he said.