France's Saint-Gobain to buy Canada's Kaycan for $928 million
03 Jun 2022
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French building materials giant Saint-Gobain on Tuesday announced that it has entered into a definitive agreement to acquire Kaycan Ltd, a family-owned manufacturer and distributor of exterior building materials in Canada and in the United States, for $928 million (approximately €860 million) in cash.
The acquisition reinforces Saint-Gobain’s global leadership in light and sustainable construction by becoming the top siding player in Canada and enlarging its vinyl offer across the United States with complementary solutions, including notably aluminum and engineered wood, the company stated in a release.
Saint-Gobain said this acquisition will complement the Group’s leadership in Canada (where Saint-Gobain achieved 2021 sales of around CAD$750 million across gypsum, insulation, ceilings and roofing) allowing it to broaden the light and sustainable construction solutions. It will also allow Saint-Gobain to strengthen and expand its channel coverage and partnerships to reach new customers in the light commercial market.
The price represents a multiple (before synergies) of approximately 11.2x Kaycan’s 2021-2022 EBITDA of $83 million and a net acquisition price of approximately $820 million, ie, a multiple of approximately 8.0x EBITDA post run-rate synergies of $30 million and after the planned divestiture of the small United States distribution arm of Kaycan (that accounts for $70 million in stand-alone resell of Kaycan products to third parties and $10 million in EBITDA, assumed to be sold at a similar pre-synergy multiple to a third party shortly after the finalisation of the transaction), while keeping the locally well-established Canadian distribution, says the release.
Saint-Gobain’s said the closing of the transaction is expected by year-end 2022, subject to antitrust approvals and satisfaction of other customary closing conditions.
Kaycan is a leading exterior building materials player with $472 million in revenues – more than half in Canada and the remainder in the United States, 12 manufacturing plants (of which 9 in Canada) and employing around 1,300 people. It is the leading manufacturer of siding products in Canada which it sells thanks to its well-known and trusted brand via its dedicated distribution and strong channel coverage in big box retail, providing unparalleled customer reach across the country and with recycling services of post-consumption materials which can in turn be incorporated into the production process.
