Saint-Gobain agrees to buy Dubai-based FOSROC in all-cash deal

SAINT-GOBAIN-FOSROC

France’s Saint-Gobain SGOB.PA has entered into an agreement to buy Dubai-based construction chemicals company FOSROC for around EUR960m($1.03bn) to drive its international expansion, it said on Thursday.

The transaction, which will be fully financed with cash, is expected to close by the first half of 2025, the French construction materials group said.

Saint-Gobain has been on the hunt for acquisitions outside of Europe as it seeks to grow its worldwide presence in construction chemicals.

Since 2021, the Paris-based multinational has bought 35 companies, including Chryso and GCP that operate in the sector.

The deal to buy FOSROC, based in the UAE, will allow the group to expand in high-growth markets such as India and the Middle East, CEO Benoit Bazin said in a statement.

Bazin emphasised the strategic importance of this acquisition, stating, “The acquisition of FOSROC is perfectly aligned with our ‘Grow and Impact’ strategic plan: it is a unique opportunity for Saint-Gobain to further reinforce its worldwide presence in construction chemicals, and to strengthen its presence in high-growth emerging markets, in particular in India and the Middle East.”

FOSROC’s growth

FOSROC has registered strong numbers with a compound annual growth rate (CAGR) of 11 per cent in sales from 2021 to 2024 and maintains a robust EBITDA margin of over 18 per cent, as per Saint-Gobain’s official statement.

The company specialises in a broad spectrum of construction chemical solutions, including admixtures, sealants, and waterproofing systems. With 20 manufacturing plants and around 3,000 employees globally, FOSROC is well-positioned in markets across India, the Middle East, and Asia-Pacific, it added.

Jim Hay, chairman of FOSROC, expressed optimism about the acquisition, saying, “Today marks the beginning of an exciting new chapter in the history of FOSROC. Our focus on delivering the best solutions and satisfaction to our customers has enabled us to become a leading player in construction chemicals.”

Synergies

Saint-Gobain anticipates substantial financial benefits from the acquisition, projecting synergies of $54m within three years post-completion. The purchase price represents a valuation multiple of approximately 11.3 times FOSROC’s estimated 2024 EBITDA of $91m, which adjusts to around 7.1 times when including the expected synergies.

The combined entity will have pro forma sales of EUR6.2bn across 73 countries, solidifying Saint-Gobain’s position as a leader in the construction chemicals sector. This move follows Saint-Gobain’s recent acquisitions, including Chryso in 2021 and GCP in 2022, as part of its strategy to enhance its global market presence and product offerings.

Rob Bonnici, CEO of FOSROC, highlighted the potential for enhanced innovation through this acquisition: “The opportunity to join Saint-Gobain, a worldwide leader in light and sustainable construction, is the perfect next step to enhance our offer by leveraging Saint-Gobain’s innovation and technology in construction chemicals.”

As Saint-Gobain integrates FOSROC into its operations, the combined strengths of both companies are expected to drive further innovation and growth in the construction chemicals industry.

This acquisition underscores Saint-Gobain’s commitment to expanding its capabilities and geographical reach in one of the most dynamic sectors of the global construction market.

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