Westlake Chemical acquiring Boral building product businesses
Westlake Chemical Corporation reported that it has entered into a definitive agreement to acquire Boral Industries.
Under terms of the deal, Westlake will acquire the wholly-owned subsidiary of Boral Limited, with Westlake acquiring Boral’s North American building products businesses. This includes roofing; siding, trim and shutters; decorative stone; and windows in a $2.15 billion in an all-cash transaction.
The proposed transaction has been unanimously approved by the boards of directors of both companies and is expected to close in the second half of 2021, subject to the receipt of regulatory clearance as well as other customary closing conditions.
In a press release, Westlake said combining its building products with Boral’s product lines creates a stronger business with significantly increased scale, greater product and geographical diversity, and enhanced growth prospects throughout the North American building products market.
Westlake expects the proposed transaction to be accretive to its earnings in the first full year of combined operations and expects cost synergies of approximately $35 million per year.
Boral’s North American building products businesses employ approximately 4,600 employees at 29 manufacturing sites in the United States and Mexico. The company’s North American building products businesses generated revenues in excess of $1 billion during the fiscal year ended June 30, 2020.
The move combines Westlake’s product brands in roofing; siding, trim and shutters; decorative stone; and windows to complement its existing businesses, including Royal Building Products’ siding, trim, and molding, DaVinci composite roofing, NAPCO Pipe and Fittings, and specialty PVC compounding business.
“The combination of Boral North America’s product lines with Westlake’s building products businesses will greatly expand our housing-related building products business and extend our presence in North America,”said Westlake President and CEO, Albert Chao. “We ook forward to welcoming the Boral employees to the Westlake family and realizing the tremendous opportunities to grow the combined businesses.”
Boral CEO and Managing Director, Zlatko Todorcevski, said, “We are pleased to announce that we have entered into an agreement to sell Boral’s North American Building Products business, which is expected to unlock significant value for Boral’s shareholders.
Deutsche Bank Securities Inc. is acting as financial advisor and Baker Botts L.L.P. is acting as legal counsel to Westlake. BofA Securities is acting as financial advisor and Alston & Bird LLP is acting as legal counsel to Boral.