Boral Ltd. Enters $2.6M Merger Agreement with Headwaters

November 21, 2016

2 Min Read
Boral Ltd. Enters $2.6M Merger Agreement with Headwaters
A Boral Ltd. vehicle at a facility. Image courtesy of Flickr user Scott Lewis

Australian building materials company Boral Ltd. has entered into a merger agreement with South Jordan, UT-based Headwaters Inc. for a value of $2.6 billion, the companies announced in separate press releases.

Coverage by Bloomberg and the Wall Street Journal said the transaction was a sign of confidence that U.S. president-elect Donald J. Trump will increase federal spending on infrastructure projects.

“The transaction is best understood as a bet on Trump policy,” Bloomberg’s report said, pointing toward a passage in the Australian company’s press release that stated the acquisition “significantly increases Boral’s exposure to large addressable U.S. markets, at an attractive point in the cycle including improved market diversification across non-residential, repair and remodel, and infrastructure segments.”

Australia’s largest supplier of building and construction materials, Boral already has a presence in North American brick, concrete and clay roof tiles, manufactured fly and stone ash, and light building products markets.

“This agreed transaction is the result of significant evaluation and engagement between our companies. The businesses of Headwaters are highly complimentary with Boral’s existing U.S. operations and the transaction price reflects our belief that there is strong commercial rationale for combining these two portfolios,” a statement by Mike Kane, chief executive officer and managing director of Boral, said.

While the Trump administration’s pledge to improve America’s infrastructure appears to be a factor in the motivation for the transaction, Bloomberg said that only 11% of Boral U.S.’ total revenue will come from infrastructure after the acquisition’s completion.

Headwaters said it expects the transaction to be completed by mid-2017.

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