Boral Limited has announced it will sell its Concrete and Quarries business in Denver, Colorado to Brannan Sand and Gravel Company for USD 127 million (AUD 169 million).
The sale price represents a trailing 12-month Enterprise value/Earnings before interest, taxes, depreciation and amortisation multiple of around eight to nine times.
Proceeds from the sale will be used to reduce debt.
Boral CEO Mike Kane said that while the Colorado construction materials business has performed well, these are the only concrete and quarry operations that Boral owns in the USA and the business is non-core.
“Boral’s strategy in the USA is focused on growing our building products and fly ash businesses,” he said.
“As we continue to strengthen our core business and deliver synergies from the Headwaters acquisition, the time is right for Boral to realise value by divesting the construction materials business in Colorado,” said Mr Kane.
The transaction is expected to be completed around 31 May 2018 and is subject to regulatory approvals.